By Abdul Ghani

The Federal Board of Revenue (FBR) has made its Compliance Risk Management (CRM) System mandatory for initiating new income tax assessments from September 1, 2026, to ensure greater transparency, consistency and objectivity in the selection of tax cases.

According to an FBR Income Tax Circular, a copy of which is available with Wealth Pakistan, no new amendment of assessment proceedings, including proceedings under sections 121, 122, 122A, 122C and 124 of the Income Tax Ordinance, 2001, can be initiated by an Inland Revenue officer unless the case has first been selected and assigned through the CRM System.

The FBR has warned that any proceedings initiated in violation of the circular will be treated as unauthorised and may be rendered void ab initio by the competent authority.

The new requirement shall apply from September 1, 2026. Assessment proceedings initiated and ongoing as of August 31 may continue under the previous framework.

However, the FBR clarified that any fresh amendment, reassessment or new show-cause notice issued in such cases on or after September 1 will also have to follow the CRM-based selection process.

The circular also establishes a formal mechanism for seeking exemption from the CRM-based selection process. Any request for exemption must be submitted in writing to the Member Inland Revenue-Operations, along with complete justification.

No exemption will be allowed unless it is specifically approved in writing by the Member IR-Operations or an officer duly authorised by him.

The FBR has directed all Chief Commissioners Inland Revenue to ensure strict implementation of the new instructions within their respective jurisdictions.

Meanwhile, the Directorate-General Compliance Risk Management has been tasked with ensuring uninterrupted operation of the CRM System and providing technical support, training and guidance to field formations.

Any system downtime or technical issue affecting the CRM System must be reported to the Member IR-Operations within 24 hours.

The FBR has further declared that the new circular will override previous circulars, instructions, standard operating procedures, and administrative orders inconsistent with the mandatory use of the CRM System for initiating assessment proceedings.

The board said the circular is part of its policy to digitise and automate tax administration and was issued under Section 214 of the Income Tax Ordinance, 2001, along with the rules and regulations framed under the law.

Credit: INP-WealthPk