The Federal Board of Revenue (FBR) has introduced a framework for conducting designated tax audits, assessments and related proceedings through the National Faceless Centre (NFC), under SRO 1828(I)/2026 issued on October 15, 2026. The notification inserts Chapter XX, comprising Rules 233 to 245, into the Income Tax Rules, 2006. The framework establishes procedures for electronic communication, taxpayer submissions, separation of official functions and quality-control reviews in specified tax cases.
The new framework does not automatically apply to every taxpayer. Under Rule 233, it applies to cases designated under Section 122E of the Income Tax Ordinance, 2001. The distinction is important because the notification establishes a process for designated proceedings rather than placing all taxpayers into the faceless system by default. The applicable procedures will depend on whether a case falls within the relevant legal provisions and has been designated for handling through the National Faceless Centre.
Rule 236 identifies the types of proceedings covered by the framework. These include audits under Sections 177 and 214C, proceedings under Section 111 and assessments conducted under Chapter X of the Income Tax Ordinance, 2001. By bringing these proceedings within a common procedural framework, the rules provide a structure for handling specified audit and assessment matters through designated officers and electronic systems.
A key feature of the framework is the separation of responsibilities among officials involved in a tax case. Under Rule 237, audit, assessment and quality-control functions will be assigned to separate officers or units for the same case and tax year. This separation is intended to distinguish the examination of tax records from the assessment process and subsequent quality review. It also establishes a procedural structure under which different functions are handled by designated personnel rather than being concentrated in a single role.
The rules also formalise electronic communication between the FBR and taxpayers. Under Rule 238, notices, orders and other communications must be generated through the FBR’s computerised system and carry a Digital Identification Number (DIN). This requirement provides an electronic identifier for official communications and establishes a common channel for issuing procedural documents. Taxpayers and their representatives will need to pay attention to notices received through the prescribed system and follow the relevant response requirements.
Rule 239 requires taxpayers and their authorised representatives to submit replies, documents and supporting evidence electronically through their designated accounts on IRIS, the FBR’s online tax administration system. This makes electronic filing a central component of the designated faceless proceedings. Taxpayers will need to ensure that relevant records are organised, submissions are completed within applicable deadlines and documents are uploaded through the correct accounts.
Although the framework places emphasis on electronic handling, it does not eliminate the possibility of physical verification. Rule 241 allows physical verification through the Field Operations Wing where necessary and duly authorised. This provision gives the tax authorities a mechanism to verify information or records physically when the circumstances require it. The inclusion of this option means the faceless process can accommodate cases where electronic review alone may not be sufficient.
Quality control is another major element of the new procedures. Under Rule 242, audit reports, adjudication notices and assessment orders will be subject to quality-control review. The requirement establishes an additional review stage for important documents and decisions generated during the proceedings. Its practical significance will depend on how the review process is implemented, including the consistency of scrutiny and the handling of errors or deficiencies identified before the relevant action is finalised.
Rule 243 extends the prescribed faceless procedures to proceedings relating to penalties under Section 182 and default surcharge under Section 205 of the Income Tax Ordinance, 2001. These provisions address penalty and surcharge matters, which can arise in connection with tax compliance and payment obligations. Bringing such proceedings within the framework sets out how they are to be handled in designated cases through the prescribed process.
The rules also provide for the transfer of cases in specified circumstances. Under Rule 244, a case may be transferred to another tax authority where physical records, repeated verification or other special handling requirements make a transfer necessary. This provision recognises that some cases may require a different administrative arrangement despite the general emphasis on faceless processing. The decision to transfer a case must fall within the circumstances provided by the rules.
The introduction of Chapter XX marks a procedural change in how designated tax proceedings are administered. Electronic notices, IRIS-based submissions, separate responsibilities for audit and assessment, and quality-control reviews form the core elements of the framework. At the same time, provisions for physical verification and case transfers allow exceptions where specific requirements arise.
For taxpayers, the immediate priority is to understand whether their cases have been designated under Section 122E and to comply with the communication and submission procedures that apply to them. The rules do not establish automatic faceless processing for every taxpayer, but they set out a defined process for the cases covered by the notification. The implementation of the framework will be important in determining how effectively the FBR handles designated audits and assessments while maintaining procedural oversight and accountability.
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