FTO Stops FBR From Issuing Notices to Deceased Taxpayer

The Federal Board of Revenue’s (FBR) field formation issued notices to a deceased taxpayer for monitoring of withholding taxes after receiving intimation of his death from family members.

According to the order of the Federal Tax Ombudsman (FTO) issued on Friday, the complaint was filed against the tax department in terms of section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), for issuance of illegal notice and not canceling the registration/ NTN of the deceased person.

Briefly as per the complaint, Gharon Khan Warar, a registered taxpayer expired in 2019 but the tax department kept on issuing notices even after the death of the taxpayer. The authorized representative submitted an application for the closure of NTN to the Income Tax Office but did not get any response.

The department responded that no death intimation of the deceased was submitted by his family members. It is on record that the taxpayer filed return of Income for the Tax Year 2020, as well as for Tax year 2021 in which he declared business income, agricultural income, and turnover in spite of the fact that the taxpayer had already expired in 2019.

As per provisions of the Income Tax Ordinance, the Commissioner may cancel the registration/NTN on the death of an individual proprietor in terms of Rule 82(5) of Income Tax Rules 2002, FTO said.

It is observed that even after the death of the taxpayer, the returns are regularly filed on behalf of the deceased. Whosoever is conducting the business of the deceased after his death should have obtained fresh NTN & STRN against his own CNIC, as in the case of an individual proprietorship, registration in income tax, as well as sales tax, are issued against a particular CNIC.

However, the issuance of notice for monitoring of withholding tax to the deceased after the receipt of his death intimation was tantamount to maladministration under FTO Ordinance, FTO conveyed to the FBR.

FTO directed the Commissioner Withholding Tax Zone, RTO Sukkur to withdraw the notice of monitoring of withholding tax to the deceased for Tax Year 2018. The necessary proceedings may be conducted in the case of the successor. The concerned Commissioner, RTO Sukkur deregister the deceased person on its merit in accordance with the law, FTO order added.

  • This is incompetence, what else we call it. Either action should be taken against those using deceased account or integrate the system with nadra to not allow to submit returns if status if user is not alive.

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