Finance bill contains drafting errors: experts
Tax experts told Business Recorder that policymaker has been harmonizing the parallel provisions contained in the Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005 as all these are administered by the same officer of the field formations. But contrary to the established policy and past practice through Finance Bill 2025 certain contradictory amendments are proposed.
The tax experts have pointed out that earlier all the three taxing statutes contained a provision that after issuance of show cause notice the assessment order was to be passed within a specified period and this provision was interpreted as mandatory in various judgments of the Supreme Court.
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However, through Finance Bill the provisions contained in Section 122(9) of the Income Tax Ordinance, 2001 is proposed to be omitted meaning thereby that there would be no time limit for passing the assessment order after issuance of show cause notice and practically the same can be passed within five years of the end of the Financial Year in which the relevant return of total income was filed.
Contrary to this, the identical provision contained in Section 11G of the Sales Tax Act, 1990 and sections of the Federal Excise Act would be continued. This differential treatment in the taxing statute administered by the same assessing officer does not sound to reason and is contrary to the norms of justice and fair play.
When contacted, Shahid Jami, a Lahore based tax lawyer, explained that though Anomalies Committees have been constituted by the Federal Government but such fine points are not likely to be addressed by them as this may not be considered anomaly by them.
He pointed out a drafting error according to which sub-section (1) of Section 46 of the Sales Tax Act, 1990 pertaining to appeal to the Appellate Tribunal is intended to be substituted and the proposed amendment provide appeal only against the appeal order passed by the Commissioner (Appeals) and contrary to the earlier provision existing for decades no appeal has been provided against the order passed by the Zonal Commissioner and FBR under the Act or Rules.
Jami stated that the wording appears to be erroneous in drafting and not intentional change in policy as the words 'under this Act and Rule made there under' exist in the proposed amendment but the authorities of Zonal Commissioner and FBR are missing.
It is imperative that such drafting errors and contradictions are removed from the Finance Bill for uniformity of taxing statues and to protect the rights of the taxpayers.
Copyright Business Recorder, 2025
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