FBR introduces nationwide faceless audit and assessment system under SRO 1828(I)/2026

The Federal Board of Revenue (FBR) has formally introduced a nationwide Faceless Audit and Assessment System for nominated taxpayers,

ISLAMABAD:  The Federal Board of Revenue (FBR) has formally introduced a nationwide Faceless Audit and Assessment System for nominated taxpayers, marking a significant step towards digitising tax administration, improving transparency and reducing direct interaction between taxpayers and tax officials.

In this regard, the FBR’s Revenue Division, IR-Policy Wing, Islamabad, has issued Notification S.R.O. 1828(I)/2026, bringing Chapter XX of the Income Tax Rules, 2002, into force for every person or case covered by the notification.

The notification, issued under File No. 1(19)R&S/2026, has been signed by Naveed Hassan, Secretary (Rules and SROs). It invokes the powers conferred under sub-rule (2) of Rule 233 of the Income Tax Rules, 2002.

Digital Processing Through National Faceless Centre

Under the new framework, tax-related audits, assessments and associated proceedings will be conducted through the computerised system of the National Faceless Centre (NFC). The mechanism is intended to standardise procedures, improve accountability and minimise opportunities for undue influence in tax matters.

Scope and Applicability

According to the notification, the system will cover cases nominated under Section 122E of the Income Tax Ordinance, 2001. Its scope includes audits conducted under Sections 177 and 214C, proceedings concerning unexplained income under Section 111, and tax assessments under Chapter X.

The framework establishes procedures for handling these matters electronically, providing a structured mechanism for processing tax cases through designated digital channels.

Separation of Audit and Assessment Functions

Under Rule 237, the responsibilities of audit, assessment and quality control for the same case and tax year will be assigned to different officers or separate units. This separation is designed to prevent excessive concentration of authority in the hands of a single officer and strengthen independent scrutiny of tax proceedings.

Electronic Notices and IRIS Portal

Rules 238 and 239 establish electronic communication procedures for the new system. Notices, orders and other correspondence issued through FBR systems will carry a Digital Identification Number (DIN).

Taxpayers and their authorised representatives will be required to submit replies, supporting documents and evidence electronically through their assigned IRIS portals, according to the prescribed procedures.

Physical Verification and Case Transfers

The framework also addresses situations requiring physical records, on-site inspections or other special verification measures. Under Rules 241 and 244, such activities may be undertaken through the Field Operations Wing, while cases may be transferred to the relevant tax authority where circumstances require it.

Quality Control and Enforcement Proceedings

Rules 242 and 243 provide for quality control of audit reports, notices and assessment orders before finalisation. Proceedings involving penalties under Section 182 and default surcharge under Section 205 will also be handled through the faceless mechanism.

The new system is expected to strengthen procedural oversight and promote consistency in tax administration. By shifting routine communication and case processing to digital platforms, the FBR aims to improve efficiency and reduce direct interaction between taxpayers and tax officials.

The nationwide implementation represents a major development in Pakistan’s ongoing tax administration reforms. Its effectiveness will depend on consistent implementation, reliable digital systems and taxpayers’ ability to access and use the prescribed electronic procedures.