Amidst a flurry of technical and legal challenges in the process of filing income tax returns, experts, tax advisory bodies, and chartered accountant firms have collectively approached the Federal Board of Revenue (FBR) with a fervent request. They seek an extension of the income tax return filing deadline from September 30, 2023, to October 31, 2023; these challenges have thrown into question the feasibility of adhering to the original deadline, creating a pressing need for reconsideration.
Technical Hurdles in IRIS 2.0
One of the foremost issues raised by the Karachi Tax Bar Association revolves around a new glitch discovered within the IRIS 2.0 system. This glitch renders taxpayers incapable of responding to notices issued by IR Officers (IROs). The genesis of this problem lies in modifications of orders within appeal orders by the Commissioner Inland Revenue-Appeals (CIR-A), creating a frustrating situation for taxpayers and tax professionals alike. Notable discrepancies, such as files opening inconsistently and challenges in importing portal data from previous returns, compound the woes faced by those trying to meet the impending deadline.
The Karachi Tax Bar Association also brought to the attention of the FBR Chairman the unexpected disappearance or removal of data from the previous year’s wealth statement in the current year’s statement. This sudden alteration has resulted in an unprecedented level of hardship and inconvenience for taxpayers. The association has consistently upheld the principle that Information Technology (IT) should function to ease the burdens on taxpayers. Regrettably, the current state of IRIS 2.0 seems to be contradicting this principle, as it is causing widespread frustration among taxpayers.
Legal Complexities Encountered During Income Tax Return Filing
Another disconcerting issue highlighted to the FBR Chairman by the Karachi Tax Bar Association pertains to the sudden absence of data from the previous year’s wealth statement in the current year’s statement. This abrupt alteration has thrust taxpayers into a state of unprecedented hardship, prompting a reassessment of the system’s capacity to alleviate their burdens.
As per the law, individuals, associations of persons, and companies must submit their tax year (TY) 2023 returns by September 30, 2023, but this date coincides with a public holiday. Thus, it is anticipated that the due date would be extended to October 2, 2023, in accordance with the General Clauses Act.
A myriad of factors underscores the need for extending the return filing deadline. These factors include missed deadlines by FBR and PRAL, lingering issues in the return process, expected high traffic on the IRIS system, and a notable decline in tax return submissions for Tax Year 2023 compared to the previous year. This decline, partly attributable to the resolution of certain issues only in September 2023, threatens to label a substantial portion of taxpayers as non-compliant.