LETTER FROM MR. MANSOOR BEG, ADVOCATE, LAHORE TO MEMBER POLICY (DIRECT TAXES) FEDERAL BOARD OF REVENUE

LETTER FROM MR <!--[if gte mso 10]> LETTER FROM MR. MANSOOR BEG, ADVOCATE, LAHORE TO MEMBER POLICY (DIRECT TAXES) FEDERAL BOARD OF REVENUE [9th July, 2009] (Re: S.R.O. 626(1)/2009, dated 7-7-2009 -- Mandatory Electronic Filing of Income Tax Return and withholding statements) The Member Policy (Direct Taxes) Federal Board of Revenue, Islamabad SUBJECT: S.R.O. 626(I)/2009, DATED 7-7-2009 -- MANDATORY ELECTRONIC FILING OF INCOME TAX RETURN AND WITHHOLDING STATEMENTS Dear Sir, Please refer to S.R.O. 626(I)/2009, dated 7-7-2009 inviting objections on proposed insertion of sub-rules (2C) and (2D) in rule 73 of Income Tax Rules, 2002 ["the Rules"]. We have following reservations/objections to the proposed amend ment:-- (1) The proposed amendment seeks to provide mandatory electronic filing Income Tax Return and withholding statement from the first day of July, 2009 onwards. The proposed amendments will be taken into consideration after fifteen days of publication of above notification in official gazette. It means it will take effect after 22-7-2009 whereas last date of filing of withholding statements is 20-7-2009. How can S.R.O. dated 7-7-2009 be retrospective when it is seeking objections by 22-7-2009? Time and again it has been held by the apex Court that a notification casting new obligation cannot be retroactive. Please make it effective prospectively. (2) In the proposed sub-rule (2D) of rule 73 of the Rules, electronic filing of income tax return and withholding tax statement has been made mandatory in case of every Association of Persons. This amendment has been proposed without taking .into consideration the economic conditions of the taxpayers of this Country. How AOPs in remote areas having no excess to internet will comply with this law. Moreover, due to electricity crises, even in the cities it will not be possible to easily excess to internet. (3) Electronic filing of income tax returns and withholding statement is a facility provided to the taxpayers all over the world. Such facilities, however, are always optional and not mandatory. In remote areas, the F.B.R. should make arrangements with Post Office to receive statement and then forward them electronically. The above two aspects of the proposed amendments are highly unjustified and we strongly oppose them.