03. administration and tribunal ICAB, KL, Study Manual 03. administration and tribunal ICAB, KL, Study Manual 03. administration and tribunal ICAB, KL, Study Manual 03. administration and tribunal ICAB, KL, Study Manual 03. administration and tribunal ICAB, KL, Study Manual

1. Taxation-l StudyManual
Chapter 3
Administration and Tribunal
Contents
lntroduction
Examination context
Topic List
3. I =Various lnconre fax Autnorities -
I 3.2 i Appointment of income Tax Authorities
:3.+i5uuoraina-tionlnlt-on-irotoilnlbnreTaiiuthorlties
and Functionl oi tncorne TarAuthorities
Self-Assessment Questions
Organization Structure of Income Tax Authorities
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2. Taxadon-l Study Manual
Worked Examole -2
An assessee regularly closes its annual accounts on 3 I't December and his last assessment for the
assessment year 2005-06, corresponding to the accounting year ended 3 l " December, 2004 was
completed. The assessee has decided to change its next annual accounts on 30s June. Determine
the date when should this assessee close its next annual accounts.
Solution
Here the assessee would not be allowed to close its next annual accounts on 30'June 2005.
Because assessment of income arising therefrom becomes assessable in the assessment year
2005-06 when assessment for this assessment year had already been completed based on the
accounts ended 31" December 2004. As such he would be required to close next annual
accounts on 30'June 2006, which would comprise a period of eighteen months.
Worked Examole -3
Can an assessee change its annual accounts closing date. lf so, under what conditions.
Solution
An assessee is allowed to change its annual accounts closing date upon taking approval from the
Deputy Commissioner of Taxes and on such conditions as rhe Deputy Commissioner of Taxes
thinks fit to impose. As for example, if due to change of accounting year, the assessee's tax
burden is reduced the Deputy Commissioner of Taxes is entided to charge tax at a higher rate
applicable for the assessment year had no change in closing date of accounts occurred.
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Taxation-l Study Manual
Introduction
Learning objectives
. ldentifr the different income tax authorities
. Recognise the power and functions of NBR and other income tax authoricies
. ldentifl the Tax Appellate Tribunal.
Practical significance
There are presendy l4 classes of income tax aurhorities. Each class of aurhorities has defined
functions and responsrbiliries.
To exercise the functions of Appellate Tribunal Government there exists a Taxes Appellate
Tribunal. The power and functions of that Tribunal are normally exercised by its Benches
constituted by the president of the Tribunal.
Understanding of the structure of income tax authorities and the Tribunal's procedures are
essential for both tax advisers and the assessees for dealing the tax matters when required.
Stop and think
Do you have the clear idea of the income tax authorities. Did you know that in casebf practical
cases relating income tax in life, the knowledge about the tax authorities is very imporant?
Working context
The knowledte on the administrative structure of income tax authorities and the Tribunal's
procedures covered by this chapter are important for both the tax payers and tax advisers in
many times in case of necessity.
On behalf of assessee the accountants sometime required to support on submission of tax
return, hearint to the court etc, so they should have a clear picture of income tax authorities
and its power and functions and the Tribunal's procedures in their mind to assist their clients in
resolving relevant tax issues.
Syllabus links
The topics covered in this chapter are important to your understanding of income tax
authorities and Taxes Appellate Tribunal.
You will be using this knowledge again'when you tackle the Taxation paper later on in the
Professional stage and it will also underpin rhe technical aspects at case study level.
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4. Taxation-l Study Manual
Examination context
Exam requirements
In the examination, candidates may be required to:
. Show the structure of various income tax authorities
. Discuss the appointment procedures of income ax authorities.
. Mention the power and functions of different income tax authorities
. ldentif the Appellate Tribunal.
Question practice
For question practice on this topic 8o to the suggested answers covering this chapter.

5. Taxation-l Study Manual
3.0 ADMI NISTRATION AND TRIBUNAL
Section Overview
) There shall be l4 classes of income tax authorities for the purposes of the Ordinance.
) NBR may appoint different tax authorities, executive ministerial officers and staff as it thinks
fit
) Each classes of authorities has defined power and functions.
) Government shall establish a Taxes Appellate Tribunal consisting of a President and other
members.
) The procedures followed by the Taxes Appellate Tribunal in disposing of the appeals have
been specified in the Taxes Appellate Tribunal (Procedure) Rules, | 985.
Various lncome Tax Authorities: Sec 3
There shall be the following classes of income tax authorities for the purposes of the lncome Tax
Ordinance 1984, namelyi
(l) The National Board of Revenue [Sec 3(l)];
(2) Directors-General of Inspection (Taxes) [Sec 3(2)];
(3) Commissioner of Taxes (Appeals) [Sec 3(2A)];
(4) Commissioner of Taxes (Large Taxpayer Unit) [Sec 3(28)];
(5) Director General (Training) [Sec 3(2C)];
(6) Director General, Central Intelligence Cell [Sec 3(2D)];
(7) Commissioner of Taxes [Sec 3(3)];
(8) Additional Commissioners of Taxes who may be either Appellate Additional
Commissioners of Taxes or Inspecting Additional Commissioner of Taxes [Sec 3(3A)];
(9) Joint Commissioner of Taxes who may be either Appellate Joint Commissioner of taxes
or lnspecting Joint Commissioner of Taxes [Sec 3(4)];
(10) Deputy Commissioner of Taxes [Sec 3(5)];
(l l) Tax Recovery Officers [(Sec. - 3(6)]
(12) Assistant Commissioner of Taxes [Sec 3(7)];
( | 3) Extra Assistant Commissioners of Taxes [Sec 3(8)]; and
(14) Inspectors ofTaxes [Sec 3(9)].
Appointment of tncome Tax Authorities: Sec 4
Subject to the rules and orders of the Government regulating the terms and conditions
of service of persons in public services and posts, appointment of income tax aurhorities
shall be made in accordance.arith the provisions of the Ordinance [Section 4(l)].
The Board may appoint as many Director-General of Inspection, Commissioners
(Appeals), Commissioners, Joint Commissioners of Taxes, Deputy Commissioners of
Taxes, Tax Recovery Officers and Assistant Commissioners of Taxes such other
executive ministerial ofiicers and staff as it many thints fit [Section 4(2)].
(3) Notwithstanding anything contained in the Ordinance, the Board may,
of the governmenq appoint one or more persons having appropriate
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with the approval
professional skill
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6. Taxation-l Study Manual
(4)
and experience to perform such functions as may be specified by an order issued in this
behali and the person or persons so appointed shall be deemed to be an income tax
authority for the purposes of the Ordinance [Section 4(2A)].
Subject to such orders or instructions as the Board may from time to time, issue in this
behalf, any other income tax authority may appoint any income tax authority
subordinate thereto and such other executive or ministerial officers and staff as may be
necessary for assistance in the execution or its functions [Section 4(3)].
NBR and lts Functions
National Board of Revenue (NBR) is the highest executive authority. lt is a statutory body and its
members are appointed by the Government to manage, control and supervise the whole income
tax Department. The NBR is empowered to make necessary rules concerning income tax
matters and is authorized to give any interpretation of any provision in any section of the
Ordinance. lt cannot act by issuing any instructions to be construed as interference to the
authoriry of judicial personnel like the Commissioner of Taxes (Appeals), Appellate Additional
Commissioner of Taxes, Appellate Joint Commissioner of Taxes and the Commissioner of Taxes
when they exercise their judicial powers.
Main functions of the NBR
(l) To declare any foreign unincorporated association as a company for the purposes ofthe
Ordinance. [Sec, 2(20)(c)]
(2) To determine a period to be an income year of any person. [Sec. 2(35)(e).
(3) To delegate powers to the Inspecting Additional Commissioner of Taxes to exercise the
powers of a Commissioner and to the Appellate Additional Commissioner of Taxes to
exercise the powers of a Commissioner (Appeals) [Sec 4A]
(4) To determine the functions of the Director General of Inspection, the Commissioner
(Appeals), the Appellate Joint Commissioner, the Commissioner (LTU), the Inspecting
Joint Commissioner and ro determine the iurisdiction of Income Tax authorities. [Sec 6]
(5) To issue orders, directions or instructions to all officers and other persons engaged in the
performance of any functions under the Ordinance. [Sec 8]
(6) To determine place of assessment when jurisdiction of an assesee falls more than in one
zone. [Sec l73A]
(7) To direct to make payment of tax deducted at source within the time specified. [Sec 59]
(8) To recognize and authorize Chartered Accountant, cost and management accountant,
income tax practitioner and members of other accounting bodies for appearance in
income tax matters as authorized representative of the assessee. [Sec I 7a (2)]
(9) To take disciplinary action against any authorized representative in case of professional
misconduct. [Sec 174 (3)]
(lO) To allow tax holiday or tax exemption to approved undertakings. [Sec 44&45]
(ll) To accord and withdraw recognition to Super Annuation Fund, Pension Fund and Gratuity
Fund. !" Schedule part A, B & C]
(12) To reward employees of the tax department or any other person for furnishing
information leading to tax evasion. [Sec 184]
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7. Taxation-l Study Manual
3.4 Subordination and Control of lncome Tax Authorities: Sec 5
The Director-General of Inspection, Commissioners (Appeals) and Commissioner shall
be subordinate to the Board.
The Additional Commissioner of Taxes, Joint Commissioner of Taxes and Inspectors
shall be subordinate to the Commissioners, or the Commissioners (Appeals)' as the case
may be, within whose iurisdiction they are appointed to perform their function.
However, no order, direction or instruction shall be given so as to interfere with the
discretion of the Appellate Joint Commissioners or the Commissioners (Appeals)' in the
exercise of their appellate functions.
The Deputy Commissioners of Taxes and Inspectors shall be subordinate to the
Inspecting Joint Commissioner within whose jurisdiction they perform their functions.
The Inspectors shall be subordinate to the DePuty Commissioners of Taxes within
whose iurisdiction they Perform their functions.
Power and Functions of Income Tax Authorities
lurisdiction of lncome Tax Authorities: Sec 6
As per section 6(l), subiect to the Provision of the Ordinance-
(aa) the Director-General of Inspection shall perform the following functions, namely:
(D carry out inspection of income tax cases;
(ii) investigate or cause investigation to the carried out in resPect of cases involving
leakage of revenue or evasion of taxes;
(iii) carry out audit of cases of offices involving income tax cases only;
(iv) furnish annual report about the working of income tax officers dealing with revenue
matters to the Board by the thirty day of December following the end of the financial
year to which it relates; and
(") such other functions as may be assigned to them by the Board
(aaa) the Director General of Central Intelligence Cell shall perform the following functions,
namely:-
(i) carry out intelligence works to tather information about taxPayers;
(ii) analyse information gathered through intelligence work vis-a-vis concerned income tax
records;
(iii) detect tax evasions, concealments of income and offences as described in chapter XXI
of Income Tax Ordinance 1984;
(iv) carry out investigations to prove tax evasion or concealment or any other irregularities
relating to taxes and to collect evidences in support of tax offences or tax frauds for
recovery of tax with penalty and to suggest Prosecutions in fit cases;
(v) to carry out functions as authorised by any other law.]
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(b)
(c)
(d)
the Commissioners or the Commissioner (Appeals) and the Appellate Joint Commissioners
shall perform their functions in respect of such areas, or such incomes or classes of
incomes, as the Board may assign to thenr[Section 6(l)(b)];
the Commissioner (Large Taxpayer Unit) shall perform his functions in respect of such
areas, or such persons' or such cases or classes of cases or such incomes or classes of
incomes, as the Board may assign ro him[Section e (l)(bb)];
the Inspecting Joint Commissioners and the Depury Commissioners of Taxes shall oerform
their functions in respect of such areas, or such persons for classes of persons, or such
cases or classes of cases, or such incomes or classes of incomes as the Commrssioners to
whom they are subordinate may assign to them[Section 6( l)(c)]; and
other incomes tax authorities shall per{ornr such functions as may be assigned to them by
the income tax aurhority to whom they are subordinate[Secrlon 6(t;1d)].
(2) (a) Any area or other jurisdiction or functions assigned to an income rax authoriry under
section 6( l) may be modified or varied, or may be transferred to any other income tax
authority with respect to areas, persons or classes of persons or cases or classes of
case, or proceeding or classes of proceedings;
(b) any such transfers as is referred to in section 6(2)(a) may be nrade at any stage of the
proceedings and furcher proceedings may be commenced from the s12ge at which such
transfer takes place.
Where more income tax authorities than one have been assigned the same functions in
respeca of any area, or persons or classes of persons, or cases or classes of cases, or
incomes or classes of incomes, they shall perform those functions in accordance with such
allocation or distribution of work as the authoriry assigning the functions may make.
The powers of the Board, Commissioners and Depury commissioner of raxes, to assign
any case to any authority, or to transfer any case from one authority to another or to
perform any function or functions under this secrion, shall include the power in respect of
all or any proceedings relating to such case; and except as provided in section 6(5), no
such assignmeng transfer or pedormance of functions shall be called in question bv or
before any courc or other authority.
Any person aggrieved by any order passed under section 6 may, within thirty days of such
order, make a representation-
(") rc the Inspecting Joint commissioner if rhe order was passed by a Depury
Commissioner of Taxes:
to the commissioner, the commissioner (Appeals), if the order was passed by an
Inspecting Joint Commissioner; and
to the Board if the order was passed by a commissioner ; and any order passed on
such representation shall be final.
Exercise of lurisdiction by Successor: Sec f
Where, in respect of any proceeding under the Ordinance, an income tax authority is succeeded
by another, the income tax authority so succeeding may continue the proceeding irom the stage
atwhich it was left by his predecessor.
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9. Taxation-l StudyManual
Officers etc. to follow lnstructions of the Board: Sec 8
All officers and other persons engaged in the performance of any functions under the Ordinance
shall, in the matter of discharging those funcdons, observe and follow such orders, directions or
instructions as the Board may issue from time to time. However, no order, directions or
insrrucrions shall be given so as to interfere with the discretion of the Appellate Joint
Commissioner or the Commissioner (Appellate) in the exercise of their appellate functions.
Guidance to the DePug Commissioner of Taxes: Sec 9
In the course of any proceedings under the Ordinance, the Deputy Commissioner of Taxes may
be assisted, guided or instructed by any income tax authority to whom he is subordinate or any
other Person authorised in this behalf by the Board.
Exercise of Assessment Functions by the Inspecting Joint Commissioners and
the Inspecting Additional Commissioner: Sec | 0
The Commissioner may, with prior approval of the Board, by general or a special order in
writing, direct that in respect of all or any proceedings relating to specified Persons of classes or
persons within his iurisdiction, the powers and function of the Deputy Commissioner of Taxes,
the Inspecting Joint Commissioner , the lnspecting Additional Commissioner and the
Commissioner under the Ordinance shall be exercised by the lnspectingJoint Commissioner, the
Inspecting Additional Commissioner, the Commissioner and the Board, resPectively and for the
purpose of any proceedings in respect of such cases or persons referred in the Ordinance or the
rules made thereunder to the Deputy Commissioner of Taxes, the InsPecting Joint
Commissioner, the Inspecting Additional Commissioner or the Commissioner shall be deemed
to be references ro rhe Inspecting Joint Commissioner, the Inspecting Additional Commissioner,
the Commissioner and the Board, resPectively.
3.6 Taxes Appellate Tribunal
Establishment of APPellate Tribunal: Sec | |
For che purpose exercising the functions of the Appellate Tribunal under the Ordinance,
the Government shall establish a Taxes Appellate Tribunal consisting of a President and
such other members as the Government may, from time to time, appoint [Section I l(l)]' .
A person shall not be appointed as a member of the Taxes Appellate Tribunal unless-
(D he was or is a member of the Board; or
(ii) he was Commissioner of Taxes; or
(iii) he is a chartered accountant and practiced professionally for a period not less than
8 years; or
(iv) he is a cost and managemenr accountant and practiced professionally for a period
not less than I Years; or
(v) he is an income tax practidoner within the meanint of section 174(2)(f) and
practiced professionally for a period not less than 20 years; or
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(vi) he is a professional legislative
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h""ing experience for a period not less than g
years in the process of drafting and making financial and tax laws; or
(vii) he is an advocate and practiced professionally for not less than | 0 years in any
income tax office. [Section I l(3)]
(3) The Government shall appoint a member of the Appellate Tribunal to be the president
thereof [Section I l(4)].
Exercise of Power ofthe Tribunal by Benches: Sec | 2
(t)
(2)
Unless the president in any panicular case or class of cases otherwise directs. the
powers and functions of the Appellate Tribunal shall be exercised by Benches of the
Appellate Tribunal, hereinafter referred to as Bench, to be constituted 6y the President.
A Bench shall be so constituted that it has not tess than two rmmbers.
Decision of Bench: Sec l3
( | ) Subject to the provisions of sections | 3(2) and (3), the decision of bench in any case or on
any point shall be given in accordance with the opinion of the maioriry of its members.
(2) Any point on which the members of a Bench are equally divided shalt be stated in writing and
shall be referred by the president to one or more other memberc of the Appellare Tri[unal
for hearing and the point shall be decided according to the maiority of the members of the
Appellate Tribunal who have heard it including those who first heard it
(3) Where there are only two members of the Appellate Tribunal and they differ in any case,
the Government may appoint an additional member of the Appellaie Tribunal for the
PurPose of hearing ofthe case and the decision of the case shall be given in accordance with
the opinion of the majority of the members of the Appellate Tribunal as constituted with
such additional member.
Exercise of Power by one Member: Sec l4
Notwithstanding anythint contained in section | 2, the Governmenr ma)r direct that the powers
and functions of the Appellate Tribunal shall be exercised by any one of its member, or members
or by two or more members jointly or severally.
Regulation of Procedure of the Appellate Tribunal: Sec t 5
Subiect to the Provisions of the Ordinance, the Appellate Tribunal shall regulate irs own
procedure and the procedure of its Benches in matters arising out of the discharge of its
funcdon including the places at which a Bench shall hold its sinings. [section l5]
A Bench shall hold its sittings at its headquarters or such other place as the Piesident may
consider convenienc IATP Rule 3].
A Bench shall hear and determine such appeals and applications made under the Ordinance
as the President may, by general or special order, direcr fl'ATp Ruh 41.
The office of the Tribunal shall, subject to any special order of the President, observe the
same officers hours and holidays as the office of the Supreme courr (High Division) at
Dhaka. IIATP Rule 51.
The Language of the Tribunal shall be English. fl-ATp Rule 61.
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11. Taxation-l Study Manual
Taxes Appellate Tribunal's Procedures
The procedures followed by the Taxes Appellate Tribunal in disposing of the appeals have been
specified in the Taxes Appellate Tribunal (Procedure) Rules, 1985 (I'ATP Rule)'
Self-Assessment Questions
l. (a) What are the various lncome Tax futhoritiesl
(b) Discuss the powers and functions of the Commissioner of Taxes'
2. Discuss briefly the Powers and functions of the Deputy Commissioner of Taxes.
3. (a) How is the lncome Tax Appellate Tribunal constitutedl
(b) What ire the qualifications required for appointment, as a Member of the Appellate
Tribunal?
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12. Income Tax Authorities
Organization Structu re
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