177(1) (Notice to call for record / documents / books of account)
Please refer to the above subject.
You have submitted your return for the tax year 2017 late, and was automatically selected for audit by the Federal Board of Revenue, Islamabad under section 214D of the Income Tax Ordinance, 2001. You have not availed immunity u/s 214E.
Now therefore, you are requested to please furnish the following information document / details relating to the period July 01, 2016 to June 30, 2017.
you may receive this notice in an e-mail from FBR Pakistan
Introduction
Receiving a 177(1) notice from the Federal Board of Revenue (FBR) in Pakistan indicates that your tax return has been selected for an audit. This can be a daunting experience, but understanding the notice and taking the right steps can help you navigate the process smoothly. Here’s what you need to know and do if you receive a 177(1) notice.
When Do You Receive a 177(1) Notice from FBR?
A 177(1) notice is issued under Section 177(1) of the Income Tax Ordinance, 2001. This notice is sent when the FBR selects your tax return for an audit. This selection can be due to various reasons, including discrepancies in your tax return or late submission.
Why Did You Receive a 177(1) Notice from FBR?
Your return may be selected for audit due to:
- Discrepancies: Inconsistencies or unusual entries in your tax return.
- Late Submission: Failure to file your return on time.
- Random Selection: Sometimes, returns are randomly selected for audit to ensure compliance.
What Should You Do After Receiving a 177(1) Notice from FBR?
1. Review the Notice Carefully
- Check the Details: Ensure the notice includes the tax year in question, specific documents required, and the deadline for submission.
- Reason for Audit: Understand why your return has been selected for audit.
2. Gather Required Documents
- Compile Records: Collect all relevant financial documents, including income statements, expense receipts, bank statements, and any other records requested in the notice.
- Organize Documents: Ensure that the documents are well-organized and clearly labeled to facilitate the audit process.
3. Consult a Tax Professional
- Seek Advice: If unsure about any aspect of the notice or the audit process, consult with a tax advisor or accountant.
- Representation: A tax professional can represent you during the audit and help prepare the necessary documentation.
4. Respond to the Notice
- Submit Documents: Provide the requested documents to the FBR within the specified timeframe. Keep copies of all submitted documents.
- Request Extension: If you need more time to gather the documents, request an extension from the FBR, explaining your situation and providing valid reasons.
5. Cooperate with the Audit Process
- Communication: Maintain open communication with the FBR officials conducting the audit. Respond promptly to any additional requests for information.
- Clarifications: Be prepared to provide explanations or clarifications for any discrepancies or unusual entries in your financial records.
6. Maintain Documentation
- Keep Records: Retain copies of the notice, your response, and all correspondence with the FBR. This documentation will be crucial if there are any disputes or further inquiries.
Consequences of Non-Compliance
Failure to comply with a 177(1) notice can result in severe penalties, including:
- Financial Penalties: Non-compliance can lead to fines ranging from PKR 25,000 to PKR 100,000, depending on the number of notices ignored.
- Legal Action: Continued non-compliance can lead to more severe legal actions and further financial repercussions.
Steps to take
Receiving a 177(1) notice from the FBR is a serious matter that requires prompt and careful attention. By understanding the notice, gathering the required documents, consulting a tax professional, and cooperating with the audit process, you can manage the situation effectively and avoid potential penalties. For detailed guidance and assistance, contact ABH Tax Consultants Islamabad. We are here to help you navigate through the complexities of tax audits and ensure compliance with the FBR regulations.
Reach out to help if you are unable to file your Tax Returns Properly