FBR Makes CRM System Mandatory For Tax Assessments

The Federal Board of Revenue (FBR) has made its Compliance Risk Management (CRM) System compulsory for selecting cases for new income tax assessment proceedings with effect from September 1, 2026.

Through Income Tax Circular No. 1 of 2026, issued under the Income Tax Ordinance, 2001, the FBR has instructed all Inland Revenue field formations to strictly follow the CRM-based case selection mechanism.

Under the revised procedure, Inland Revenue officers will not be permitted to initiate fresh or amended assessment proceedings, including cases falling under sections 121, 122, 122A and 122C of the Income Tax Ordinance, unless the case has first been selected and formally assigned through the CRM System.

The FBR warned that any proceedings launched in breach of the circular will be treated as unauthorised and could be declared void ab initio by the competent authority.

According to the FBR, the new system is intended to make case selection more transparent, consistent and objective, while supporting the wider digitisation and automation of Pakistan’s tax administration.

Assessment proceedings that were already in progress by August 31, 2026 can continue under the previous framework. However, any new amendment, reassessment or show-cause notice issued in such cases from September 1 onward must also comply with the CRM-based selection procedure.

The FBR has permitted exemptions from CRM selection only under exceptional circumstances. Requests must be made in writing to the Member (Inland Revenue - Operations), supported by complete justification, while approval must specifically be granted in writing by the Member (IR Operations) or an authorised officer.

All Chief Commissioners Inland Revenue (CCIRs) have been instructed to ensure that the new requirements are implemented within their respective jurisdictions.

Meanwhile, the Directorate-General (Compliance Risk Management) will be responsible for maintaining the CRM System, as well as providing technical assistance, training and guidance to Inland Revenue field formations.

Any technical failure or period of system downtime affecting the CRM platform must be reported to the Member (IR-Operations) within 24 hours.

The new circular will take precedence over earlier FBR or field-level circulars, instructions, standard operating procedures and administrative orders wherever they conflict with the mandatory CRM-based case selection process.

The FBR stated that the circular has been issued under Section 214 of the Income Tax Ordinance, 2001, along with the applicable rules and regulations.