28-Sep-20

INCOME TAX AUTHORITIES

The following different classes of Income Tax Authorities may be
appointed.

Administrative authorities;
Investigation and intelligence authorities;
Training and research authorities;
Internal audit authorities;
Withholding tax authorities;
Independent private agencies, firms or companies such as,
auditors, surveyors and valuers; and
Appellate authorities.

FBR

DG Internal Audit
Chief Commissioner
DG Training and Research
DG Intelligence and Investigation
Commissioner - Admin Commissioner - Appeal
DG Withholding Taxes
Additional Commissioner
DG Research and Development
DG Broadening of Tax Base Deputy Commissioner
DG International Tax Operations
Assistant Commissioner
DG Immoveable Property
DG Special Initiative
DG Valuation

Note: All appointments made by Board shall be subject to the rules and orders of the Federal Government regulating
the terms and conditions of persons in public services. However, the appointments of values, chartered accountants
and experts shall be regulated by their ‘Terms of Reference’ (TOR) issued at the time of their appointment. [208((3)].

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Functions and Powers of Board

Board is the highest authority within the framework of the Income Tax Ordinance. It enjoys several
powers and performs certain functions under the Ordinance. The Board, besides others, is
empowered to:
1. Grant exemption from tax to the newly established industrial undertakings and make rules for
granting such exemptions.
2. Make rules for appointment of valuers and other matters relating to their smooth functioning.
3. Make rules for the recovery of tax from a taxpayer who is in default.
4. Make rules for tax credit for certain investments.
5. Certify an institution as conducting research in Pakistan. [26(2)]
6. Approve a scheme regarding employee training. [27(c)]
7. Grant approval to leasing companies and modarabas. [28(3)]
8. Specify the method of accounting for certain business, or class of business, or any other source
of income or any class of persons. [32(3)]

9. Approve a security for the purposes of taxation of “profit on debt”. [46(d)]

10.Approve the charitable institutions for the purposes of Income tax Ordinance,
specially, for donation purposes. [61]
11.Make rules for apportionment of deductions. [67(2)]
12.Decide an application submitted by a person against the decision of Commissioner
for granting or withdrawing the permission regarding use of a specific tax year.
[74(11)]
13.Make rule for valuation and taxation of unexplained income or asset. [111 (5)]
14.Authorize any department or agency of the Government to collect and compile any
data in respect of incomes from industrial and commercial undertakings exempt from
tax. [180]
15.Issue circulars for the guidance to taxpayers and officers of Board. [206]
16.Issue advance ruling on application of a non-resident. [206A]

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17. Exercise general administration of income Tax Ordinance, 2001. [207]

18. Appoint any of the income tax authority including valuers. [208]
19. Determine the jurisdiction of income tax authorities.[209]
20. Authorize a CCIR or CIR to grant approval on behalf of Board. [212]
21. Prescribe forms, etc. for the purposes of the Income Tax Ordinance, 2001. [217]
22. Make rules for carrying out the purpose of the Income Tax Ordinance, 2001
[237]
23. Appoint a firm of Chartered Accountants or Cost and Management Accountants
to conduct the audit of any person [176 & 177].
24. Appoint any private agency, firm or company to carry out survey in respect of
specified persons or areas.

CIRCULARS ISSUED BY BOARD [206]

For the purpose of the interpretation of the Income Tax Ordinance. Board may issue Circulars. The main
object of the circulars is to achieve consistency in the administration of the Ordinance and to provide
guidance to the taxpayers and officers of the Board.

It is to be noted that a Circular issued by Board is binding on the Board and its officers except the
Commissioner (Appels) and other persons employed in the execution of the Income Tax Ordinance, but is not
binding on a taxpayer.

TAX AUTHORITIES TO FOLLOW ORDERS OF BOARD [214]

Board is the highest administrative authority for implementation of the taxation laws. The Income Tax
Ordinance requires that all income tax authorities and other persons employed in the execution of income tax
law shall observe and follow the orders, instructions and directions issued by Board.

However, the law also specifies that the Board shall not give any orders, instructions or directions that may
interfere with the discretion of the Commissioner (Appeals) in the exercise of his appeals function.

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CHIEF COMMISSIONER INLAND REVENUE

‘Chief Commissioner’ means a person appointed to be a Chief Commissioner Inland Revenue (CCIR) under
section 208 of the Income Tax Ordinance. It also includes Regional Commissioner Inland Revenue and a Director-
General of Income Tax and Sales Tax. [2(11B)].
Chief Commissioner is appointed by Board. Hid functions, duties, and jurisdiction are also specified by Board. He
works under the supervision of Board and supervises the Commissioners Inland Revenue and other sub-ordinance
officers working within his jurisdiction:
The Chief Commissioner has to oversee the functioning of his subordinate tax authorities. He will make
arrangements to ensure that the provisions of the law and directions given by Board are being complied with.
The Chief Commissioner shall possess the following powers and perform the following functions:
1. Transfer the jurisdiction in respect of cases or persons from one Commissioner subordinate to him to another.
[209(2)].
2. Revise certain orders passed by his subordinate authorities.
3. Call for the record of any proceedings relating to issuance of an exemption or lower rate certain with regards to
collection or deduction of tax at source. [122B]
4. Appoint any of his subordinate authorities with the approval of Board. [208(2)]

COMMISSIONER INLAND REVENUE

‘Commissioner’ means a person appointed to be a Commissioner Inland Revenue (CIR) under section 208
of the Income Tax Ordinance. It also includes any other authority vested with all or any of the powers and
functions of the Commissioner. [2(13)]
CIR is appointed by Board and is subordinate to Board and Chief Commissioner under whose jurisdiction
he works. The following authorities are subordinate to the CIR: [207]
1. Additional Commissioners;
2. Deputy Commissioners;
3. Assistant Commissioners;
4. Inland Revenue Officers;
5. Inland Revenue Audit Officers;
6. Superintendents; and
7. Auditors.

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Functions and Powers of CIR

CIR is head of a ‘Revenue Zone’. He performs all such functions as are required by any provision of
the Income Tax Ordinance and as directed by Board. He oversees the performance and functions of
all subordinate authorities working within his jurisdiction.
Under the Income Tax Ordinance, 2001, the CIR is the most powerful authority. Almost all functions
concerning the administration of the Ordinance are vested in him. His powers are manifold. CIR
enjoys the following powers and has to perform the following functions under the law:
1. Allow an employee to pay tax on his retirement payment and golden handshake payments as per
normal procedure or pay tax on the basis of average rate of tax based on the three preceding tax
years. [12(6)]
2. Allow an employee to pay tax on his retirement payment and golden handshake payments as per
normal procedure or pay tax on the basis of average rate of tax based on the three preceding tax
years. [12(8)]
3. Extend the date of selection out of the options available to an employee. [12(8)]
4. Allow a person to change his method of accounting. [32(4)]
5. Permit the change of stock valuation method. [35(6)]
6. Allow a person to use special tax year. [74(3)]
7. Allow a person to use normal tax year instead of special tax year. [74(7]

8. Impose conditions while permitting a person to use a special tax year or normal tax year . [74(5)]
9. Withdraw the permission granted to a person to use a specific tax year. [74 (7)]
10.Distribute, apportion or allocate incomes, deductions or tax credits in respect of any transaction
between associated. [108(1)]
11.Charge to tax the value of any unexplained income or asses and determine the value if it is
declared less than the fair market value [111(3)]
12.Require a person or his representative to furnish the return of income. [111(3) & (4 )]
13. Require a person to furnish his wealth statement.
14.Require a person to furnish the return if the business is discontinued and the person has not
furnished his return of income. 117(3)
15.Extent the time for filling of return [119]
16.Make an assessment order. [122]
17.Make an assessment order if tax payer has not furnished his return of income. [121]
18.Make a provisional assessment order [123]
19.Make an assessment order to give effect to an order of an appellate authority or the court. [124]
20.Make an assessment in the light of a point of law decided by the High Court or the Appellate
Tribunal. [124A(1)]