Mandatory CRM System for Income Tax Assessments amended via Corrigendum and KC Views & Recommendations

07 September 2026

Author: Mr Asif S Kasbati (FCA, FCMA & LLB).

From: Asif Siddiq Kasbati <asif.s.kasbati@professional-excellence.com>

Date: Sun, Sep 6, 2026 at 11:12 PM
Subject: TLQC3710= Mandatory CRM System for Income Tax Assessments amended via Corrigendum and KC Views & Recommendations

590+ Taxes & Levies Quick Commentary - TLQC 3710

A. Background: (1) TLQC 3707 of 4.9.26 about Compliance Risk Managment System Mandatory for Assessment (AI & Faceless) via Circular; C - Be ready as per Views & Recommendations in trail, blue, italic and double Line - these are useful for this TLQC too (2) For the List of earlier relevant QCs, please refer to Para E.

B. Authentication: The document mentioned below is not available on relevant websites, as our team checks all relevant websites twice a day. However, we found the document from reliable resources; hence, the QC is being sent now.

C. Updated Commentary

Further to KQU 4070 of 4.9.26 being an important matter we would inform you about CORRIGENDUM dated 1.9.26 to amend the Income Tax Circular No. 1 dated 31.8.26 IR-Operations (Income Tax) Mandatory Use of Compliance Risk Management (CRM) System for Initiation of Assessment Proceedings under the Income Tax Ordinance, 2001 - with effect from 1.9.26. (Attachment 3710.1) with emphasis in bold & Underline for quick reading.

2. In continuation of the Board's Income Tax Main circular No.1 of 2026-27 (TLQC 3707 of 4.9.26in trail refers) issued vide FBR office letter of even number dated 31.8.26, the contents of paragraph 2 thereof may be read as under, in supersession of the existing paragraph 2 (with Emphasis our in bold and underlined:

Existing Para

Para to be Read as

With effect from 1.9.26, it is hereby directed that no new amendment of assessment proceedings, including but not limited to proceedings under sections 121, 122, 122A, and 177 of the ITO, 2001, shall be initiated or amended by any officer of Inland Revenue unless the case has been selected and assigned through the CRM System. Any proceedings initiated in violation of this Circular shall be deemed unauthorized and may be rendered void ab initio by the competent authority

With effect from 1.9.26, it is hereby directed that no new amendment of assessment proceedings, including but not limited to proceedings under sections 111, 122, and 177 of the ITO, 2001, shall be initiated or amended by any officer of Inland Revenue unless the case has been selected and assigned through the CRM System. Any proceedings initiated in violation of this Circular shall be deemed unauthorized and may be rendered void ab initio by the competent authority

3. All other contents of the aforesaid Circular shall remain unchanged. This issues with the approval of competent authority.

D. Kasbati & Co Views on Corrigendum as well as Main Circular

1. For updated Income Tax Ordinance 2001 updated to June 30, 2026 (refer to relevant TLQC 3642) and refer below to the relevant sections

Section	Description	Page	See Sub Para D - except specified otherwise about para C
111	Unexplained Investment & Assets	111	2 & 3
120	Assessments	242	5
120A.	Omitted by Finance Act, 2013	245	-
120B.	Restriction of proceedings	245	5
121	Best judgment assessment	245	2 & 4
122	Amendment of assessments	247	C2
122A.	Revision by the Commissioner	251	2 & 4
122B.	Revision by the Chief Commissioner	252	5
122C.	Omitted by the Finance Act, 2017	252	-
122D.	Agreed assessment in certain cases	253	5
122E.	Faceless audit and assessment (see TLQC 3672)	254	5
123	Provisional assessment in certain cases	254	5
124	Assessment giving effect to an order	255	5
124A.	Powers of tax authorities to modify orders, etc.	257	5
125	Assessment in relation to disputed property	257	5
126	Evidence of assessment	258	5

2. Section 111 relates to Unexplained income or assets while Section 121 relates to Best judgment assessment. Section 122A relates to Revision by the Commissioner

3. We are of “including but not limited” already include section 111 and we feel that the same has been specially included to avoid action in Section 111 there was not need to include the same.

4. Sections 121 & 122A deletion have no effect owing to “including but not limited to”

5. Moreover, sections 120, 122B, 122D to 126 above in Assessment Chapter of the Ordinance will also be applicable, though not specifically stated in para 2 of the Circular.

6. Further CRM System will not affect the appeal effect order sections 124 & 124A.

D. List of Further TLQCs

(a) TLQC 3672 of 16.8.26 about Proper Return filing as AI-Driven Faceless Audit & Remarks about Consultants by FBR

(b) TLQC 3688 of 20.8.26 about Tax Penalties of 2001 Ordinance cannot be applied to assessment completed on Repealed Ordinance – SCP

(d) TLQC 3662 of 7.8.26 about Fast Track FBR reforms & Cashless Economy – Be ready

E. Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise or require Income Tax Federal & Provincial Sales Tax or Withholding Tax Advisory Statement or Return Filing or Review services or related accounting matters like the above please feel free to email Mr Amsal at amsal@kasbati.co with CC to mailto:info.kasbati@professional-excellence.com. Your Good self may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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Mandatory CRM System for Income Tax Assessments amended via Corrigendum and KC Views & Recommendations