KARACHI: While disposing of a complaint, Tax Ombudsman Asif Jah has directed FBR to withdraw the notice of monitoring of withholding tax and to cancel registration/NTN of deceased person.
Briefly, the deceased person was a registered taxpayer but FBR kept on issuing notices even after his death.An application for closure of NTN to Income Tax office was made but did not get any response. Therefore, the matter was taken up with the Federal Tax Ombudsman. The complaint was further referred to Secretary Revenue Division for comments; the chief commissioner stated that no death intimation was ever submitted by his family members or his authorized representative. A notice under Section 161(1A) of the Income
Tax Ordinance, 2001 for Tax Year 2018 was issued. However, after issuance of reminders his family member submitted death intimation. It was on record that taxpayer filed return of income for tax year 2020 as well as for tax year 2021 in which he declared business income, agricultural income and turnover, in spite of the facts that the tax payer had already expired.
FTO in its findings has stated that taxpayer registration profile was registered in income tax in 2010 and in sales tax in 2015 as a distributor of fertilizer. He expired in 2019. As per provisions of Income Tax Ordinance, the Commissioner may cancel the registration/NTN on the death of individual proprietor in terms of Rule 82(5) of Income Tax Rules 2002 which states:
“82 . Modification or cancellation of registration.
(5) The Commissioner may, based on available information, particulars,
data or documents, after making such inquiry as he may deem necessary,
after discharge of all outstanding liabilities, without prejudice to any other
liability which such person may incur under the Ordinance and after
providing reasonable opportunity of being heard to a person by an order
in writing, cancel registration of a taxpayer.”
Similarly, the Commissioner may deregister this taxpayer after obtaining application in prescribed form ‘STR-3’ and following the procedure laid down in Rule 11 of Sales Tax Rules 2006. It was also averred that even after the death of the taxpayer, the returns were regularly filed on behalf of the deceased. Who so ever was conducting business of the deceased after his death should have obtained fresh NTN & STRN against his own CNIC. Issuance of notice for monitoring of withholding taxes to the deceased after the receipt of his death intimation tantamount to maladministration. Tax ombudsman has directed FBR to withdraw notice of monitoring of withholding tax to the deceased for Tax year 2018, necessary proceedings to be conducted in the case of successor and also to de register the deceased person on its merit in accordance with law.