ISLAMABAD (August 29 2006): The Central Board of Revenue (CBR), to check the authenticity of claims, has started examining the tax records of corporate companies which have claimed huge amounts of income tax refunds.
In this connection, the Board has started an in-depth exercise to scrutinise the data of corporate entities, claiming extraordinary high amounts of income tax refunds from time to time.
Sources told Business Recorder on Monday that the Board has issued instructions to Regional Commissioners of Income Tax (RCITs) to examine the tax records of corporate taxpayers claiming huge refunds during last few years. The scrutiny of data would ascertain the reasons for filing claims, and their genuineness.
The Board has also directed the RCITs to liquidate all pending refund claims, and reject the claims which do not qualify conditions laid down in the law, to arrive at a realistic position of pending refunds.
Sources said that the income tax department is only empowered to scrutinize the data, without calling the taxpayers in the offices unless or until specific instructions were issued in this regard.
They would examine the attached documents, along with the income tax returns filed by the corporate companies. Obviously, the income tax department officials can not demand the 'books of accounts' kept by the registered companies. The department can only analyse the audited accounts of the companies and other corporate entities.
They can also examine the profit and loss accounts, trading accounts, balance sheets of the company and other documents filed with the returns.
The analysis would help the tax officials to ascertain the nature of business of companies claiming huge amounts of refunds. The data would underline the reasons for less payment of tax as compared to the refunds claimed by them on the basis of audited accounts, sources added.