Refund Adjustment of Past Years from the Income Tax Returns

Refund Adjustment of Past Years from the Income Tax Returns. The new tax return form of the Federal Board of Revenue (FBR) challenged in the IHC on Monday.

The petition has been filed against the FBR’s move to remove the provision. Provision relates to the refund adjustment of past years from the income tax returns. Islamabad Hugh Court (IHC) has directed the FBR to submit its reply by September 29, 2022.

Petition in Islamabad High Court

The petitioner, Ejaz Hussain Rathore, a practicing Chartered Accountant, has sought direction from the FBR. To upload the returns of the total income of IRIS which conforms with the notification (SRO. 978(I)/2022. It includes a provision for the refund adjustment of another year(s). Against the demand for the current year in line No.92101.

According to petitioner, the refund adjustment of other year(s) against the demand of tax for the current year, always appeared in the tax return forms issued by the FBR.

That the Income Tax Rules, 2002 notified through Notification (SRO. 820(I)/2022) dated 21.06.2022 also had similar provision and so also the final notification dated June 30, 2022, but the tax return forms uploaded by the FBR does not have any provision for the refund adjustment of other year(s) against the demand for the current year.

By omitting such a provision in the tax return forms, the respondents have acted in violation of the applicable Rules; such an omission amounts to the petitioner’s fundamental rights.

Advocate Syed Ishfaq Hussain Naqvi, who is on the penal of the lawyers of the FBR, appeared before the court and accepted notice on behalf of the FBR and sought some time to submit a reply over the matter.