Information about account holders: FBR, PBA agree on mechanism

SOHAIL SARFRAZ

ISLAMABAD: There will be no binding on banks to provide accountholders information to the Federal Board of Revenue in cases where notice to seek data under section 176 of the Income Tax Ordinance 2001 is without the name/nomenclature, or Computerised National Identity Card number and bank account number/title of account.

Sources told Business Recorder here on Monday that the FBR and the Pakistan Banks Association (PBA) have agreed on a mechanism for sharing information about the accountholders under section 176 of the Income Tax Ordinance 2001. Under the agreed arrangement, the banks will not be obliged to provide information if the notice under Section 176 of the Ordinance, does not contain the name/nomenclature and/or Computerised National Identity Card number (in case of individuals) and incorporation number (in case of companies), or the bank account number/title of account. In case such a notice is received, the focal person in the concerned bank will be entitled to decline it with a copy thereof to the Chief Commissioner concerned.

In this regard, the FBR and the bank's representatives have jointly chalked out an implementation mechanism of section 176 of the Income Tax Ordinance, 2001. Under section 176, the FBR can serve notice any department to obtain information or evidence.

In order to streamline and smoothly implement Section 176 of the Income Tax Ordinance, 2001, which has recently emerged as an irritant in the FBR-Banking sector's relations, it was decided that:

Firstly, every scheduled bank will nominate (by name) at least two officers of adequate seniority in order of hierarchy divulging their complete contact details (including their cell phones, email address etc.). Any change in focal persons will be communicated to Chief (Operations) FBR, during next two working days, who, in turn, will transmit it down the line immediately.

Secondly, the departmental officers from all-over Pakistan, instead of issuing notices under section 176 of the Ordinance 2011 to local branch managers, will, hereinafter, direct their notices to the designated focal persons at the Head Office of each scheduled bank.

Thirdly, the banks' focal persons, after scanning their complete list of accountholders in all branches wherever located, will be obligated to respond to the notice issuing authority within 10 days. If, however, the focal person is unable to provide the required information within the stipulated time, he/she will make a request in writing to the notice-issuing authority for extension, which under normal circumstances should be granted. All banks will be liable to provide the information by the expiry of the extended period, and within a fortnight under all circumstances.

Fourthly, the banks will not be obliged to provide information if the notice under Section 176 of the Ordinance, does not contain the name/nomenclature and/or Computerised National Identity Card Number (in case of individuals) and incorporation number (in case of companies), or the bank account number/title of account. In case such a notice is received, the focal person will be entitled to decline it with a copy thereof to the Chief Commissioner concerned.

Fifthly, both the FBR and PBA will circulate this mechanism to the field offices and other stakeholders for compliance to ensure implementation mechanism of section 176 of the Income Tax Ordinance, 2001.

Under section 176, the commissioner may, by notice in writing, require any person, whether or not liable for tax under this Ordinance to furnish to the Commissioner or an authorised officer, any information relevant to any tax. The commissioner may require any person to attend at the time and place designated in the notice for the purpose of being examined on oath by the commissioner or an authorised officer concerning the tax affairs of that person or any other person and, for that purpose, the commissioner or authorised officer may require the person examined to produce any accounts, documents, or computer-stored information in the control of the person.

The commissioner may impound any account or document produced and retain it for so long as may be necessary for examination or for the purposes of prosecution, section added.