20000316

Probe immunity

for FCAs: CBR

clarification

RECORDER REPORT

KARACHI: The Central Board of Revenue has taken serious note of the complaints that some assessing officers are making frivolous inquiries about deposits in the existing foreign currency account.

These inquiries are made on the pretext that they are no longer immune from probe under the Second Scheduled to the Income Tax Ordinance, 1979 or under the Protection of Economic Reforms Act, 1992, which is causing harassment.

"The CBR would like to clarify that the deposits in the existing foreign currency accounts made before December 16, 1999, continue to be immune from probe under Second Schedule of the Income Tax Ordinance, 1979," said a notification issued by the CBR.

It is further clarified that where any amounts are remitted from abroad through normal banking channels into these accounts on or after December 16, 1999, or into new foreign currency accounts opened on or after the said date, such deposits are to be accepted as such by the Department and no further probe or inquiries into the sources of these deposits by the Income Tax authorities should be necessary," added the notification.

It has been further decided that the existing provision of Section 144 (C) of the Income Tax Ordinance, 1979, requiring prior approval of the Commissioner for making inquiries from a banking company, must be strictly enforced.

The Commissioners have been advised to exercise their discretion judiciously and not to routinely allow such permission.

"They should also instruct their subordinate officers to be discreet while seeking permission from the Commissioner. Any instances of violation of these instructions would be entail strict action," said the notification.