RECORDER REPORT

ISLAMABAD: The Federal Board of Revenue (FBR), from September 1, 2026, has restrained Inland Revenue field formations from selection of cases for income tax assessments unless the cases have been selected and assigned through the FBR’s Compliance Risk Management (CRM) System.

In this regard, the FBR has issued Income Tax Circular No. 1 of 2026 for initiation of assessment proceedings under the Income Tax Ordinance, 2001 with effect from September 1, 2026.

According to an income tax circular issued on Monday, in exercise of the powers conferred under the Income Tax Ordinance, 2001 and in order to bring transparency, uniformity, and objectivity in the selection of cases for assessment, the FBR hereby issues the following directions to all field formations of Inland Revenue.

With effect from September 1, 2026, it is hereby directed that no new amendment of assessment proceedings, including but not limited to proceedings under sections 121, 122, 122A and 122C of the Income Tax Ordinance, 2001, shall be initiated or amended by any officer of Inland Revenue unless the case has been selected and assigned through CRM System. Any proceedings initiated in violation of this Circular shall be deemed unauthorised and may be rendered void ab initio by the competent authority.

Assessment proceedings already initiated and in progress as of August 31, 2026 may be concluded under the existing framework. However, any fresh amendment, reassessment, or new show-cause notice in relation to such cases issued on or after September 1, 2026 shall comply with the CRM-based selection process mandated under this Circular.

Any request for exemption from the CRM-based selection process shall be submitted in writing to the Member (Inland Revenue - Operations) with complete justification. No exemption shall be granted unless specifically approved in writing by the Member (IR Operations) or an officer duly authorised by him.

All Chief Commissioners Inland Revenue (CCIRs) are directed to ensure strict compliance with this Circular within their respective jurisdictions.

The Directorate-General (Compliance Risk Management) is hereby directed to ensure uninterrupted operability of the CRM System and to provide necessary technical support, training and guidance to the field formations. Any system downtime or technical issue affecting the CRM System shall be reported to the Member (IR-Operations) within twenty-four hours.

This Circular shall have an overriding effect over any previous circulars, instructions, standard operating procedures, or administrative orders issued by FBR or its field formations that are inconsistent with the mandatory use of the CRM System for initiation of assessment proceedings. All such prior instructions are hereby superseded to the extent of inconsistency.

This Circular is issued in exercise of the powers vested in the Federal Board of Revenue under Section 214 of the Income Tax Ordinance, 2001, read with the rules and regulations framed thereunder, and in furtherance of the policy to digitise and automate tax administration.