2002 P T D 1572

[Federal Tax Ombudsman]

Before Justice (R) Saleem Akhtar, Federal Tax Ombudsman

Messrs MALIK BROS. KHAD DEALERS, MIANWALI

versus

SECRETARY, REVENUE DIVISION, ISLAMABAD

Complaint No. 103 of 2002.

Income Tax Ordinance (XXXI of 1979)‑‑

‑‑‑‑S. 77(3)‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9‑‑‑Complaint before Federal Tax Ombudsman‑‑‑Liability for payment of tax in cases of private companies, firms and associations of persons‑‑‑Refundable amount of Association of Persons (AOP)‑‑‑Adjustment of refund against partners liability‑‑ Complainant/assessee accepted that the refund had been correctly worked out and also accepted in principle that tax liability of the member of the AOP was adjustable against the refund as provided by law‑‑‑Department could make adjustment of the tax demand outstanding in the case of the member of the AOP against the AOP's refund, but only to the extent provided in S.77(3) of the Income Tax Ordinance, 1979 viz. only to the extent that the tax demand was in respect of the member of the AOP's share of income in the AOP‑‑‑Federal Tax Ombudsman recommended that refund be paid to the complainant/assessee in 'the light of the recommendation.

Muhammad Saeed Rana for the Complainant.

Manzoor Ahmad, D.C.I.T., Circle 02, Sargodha for Respondent.

DECISION/FINDINGS

This is a complaint by an AOP relating to nop‑payment of refund resulting from income‑tax reassessment in its case for the assessment year 1991‑92.

2. In the respondent's reply it has been stated refund of Rs. 93,848 has been created by the ALIT, Circle 11, Bhakkar but the demand of Rs.60,459 outstanding against one of the members of the AOP is to be adjusted against the refund.

3. During the hearing the authorized representative of the complainant accepted that the refund had been correctly worked out and also accepted, in principle, that tax liability of the member of the AOP is adjustable against the refund as provided by law. The respondent may, therefore, make adjustment of the tax demand outstanding in the case of the member of the AOP against the AOP's refund, but only to the extent provided in section 77(3) of the Income Tax Ordinance viz. only to the extent that the tax demand is in respect of the member of the AOP's share of income in the AOP.

4.In the light of the above it is recommended that:

(i)Refund be paid to the complainant in the light of the observations at para. 3 above.

(ii)Compliance be, reported within 30 days.

C.M.A./C.M.A./240/FTO

Order accordingly.