Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)‑‑‑

‑‑‑‑S.14(4)‑‑‑Filing of frivolous complaint‑‑‑Jurisdiction‑‑‑Record of a case was transferred to Quetta from Lahore, assessee's head office being at Quetta ‑‑‑Assessing Officer at Lahore complained that records were transferred with mala fide' intention with a view to 'facilitate unearthing of concealment as he had identified a bank account‑‑‑Validity‑‑‑Complaint had been filed with personal motive to secure convenience to pursue claim for "cash reward" which resulted in loss of valuable time and energy of Federal Tax Ombudsman Secretariat as well as of the officers of Income‑tax Department, in addition to the loss suffered by the State by way of TA/DA expended on travel of DCIT Quetta all the way to Lahore to represent the respondent and to present the record‑‑‑Case was closed but invoking the provisions of S.14(4) of the Federal Tax Ombudsman Ordinance a sum of Rs.10,000 was imposed on the complainant as compensation to the Revenue Division for a frivolous complaint against functionaries simply to grind his own axe‑‑‑Federal Tax Ombudsman recommended that C.B.R. should deduct the above amount from the "cash reward" which may become due to the Complainant/Assessing Officer, in addition to an amount equal to TA/DA payable to the DCIT Quetta for Lahore tour.

Shaukat Ali for the Complainant.

Parshotam Das, DCIT and Ahmad Ali, DCIT, Zone‑B, Lahore for Respondent.

DECISION/FINDINGS

The complainant accuses the Assessing Officer, Circle 12 Zone‑B, Lahore for illegal transfer of assessment records of Pak National Industry, 124‑Ferozepur Road, Lahore from his Circle to the Income‑tax Office, Quetta disregarding the fact that the jurisdiction over the case vests with his Circle at Lahore.

2. The complainant stated that Pak National Industry, 124 Ferozepur Road, Lahore was a proprietorship concern owned by one Muhammad Inam in his `individual' capacity whereas Pak National Industry, Quetta was an AOP consisting of the following Members:‑‑‑

1.Mst. Munawar Begum.

2.Mst. Amina Khanum.

3.Mr. Feroze‑ud‑Din.

4.Mr. Muhammad Ahmad.

5.Mr. Shafiq Ahmad.

6.Mst. Shamshad Begum.

The name of Mr. Muhammad Inam, according to the complainant, nowhere figures amongst the Members of this AOP. It was the Complainant's contention that Mr. Muhammad Inam has no concern whatsoever with‑ the said AOP and, therefore, he should have been assessed in his individual capacity at Lahore under the name and style of "Muhammad Inam, Proprietor Messrs ‑Pak National Industry, 124‑Ferozepur Road, Lahore." According to him the assessment records were transferred by the concerned Assessing Office with mala fide intention so as to favour Mr. Muhammad Inam. It was asserted that in the complaint lodged by him with the Commissioner of Income‑tax, Zone‑B, Lahore, he had identified a bank account of Mr. Muhammad Inam with a view to facilitate unearthing of concealment. He regretted that instead of utilizing this valuable information, the assessment record was transferred to Quetta, which would result in frustrating his (Complainant's) efforts. In order to forestall the transfer of record, a representation was made to the Regional Commissioner on 24‑5‑2001 but to no avail.

3. The respondent's reply, vide letter ‑No.J‑85,/FTO/SD‑1/2523; dated 6‑11‑2001, explains that enquiries conducted by the Assessing Officer revealed that Messrs Pak National Industry had its Head Office at 3‑M.A. Jinnah Road, Quetta where it existed at NTN 25‑23‑2006963. Since assessment had to be made at one place where all income from whatever source and from everywhere, was to be clubbed, the record was after proper enquiries, transferred to the Income‑tax Office, Quetta on the "point of jurisdiction" because the assessment could legally be framed in Circle‑A, Quetta where his previous assessments were framed at NTN 25‑23‑2006963. The respondent's reply further states that the transfer of "records to Quetta entailed no irregularity whereas the Complainant harbours unfounded suspicions.

4. The assessment records produced by Mr. Parshotam Das, DCIT (Quetta) and Mr. Ahmad Ali, DCIT were perused. It transpired that Mr. Muhammad Inam is one of the members of the AOP (=Pak National Industry) whose Head Office, as also the `principal place of business', is at Quetta. Both the officers appearing for the respondent. vehemently insisted that there was absolutely no truth in the grumble that Mr. Muhammad Inam has no concern with Pak National Industry, Quetta. The assessment records presented by the Department support their contention. All the returns of Income placed on record, bear signatures of Muhammad Inam which tally with his signatures obtaining on the bank's account opening form for Account No.700‑5 identified by the Complainant on 12‑7‑2001. Moreover, the signatures of Mr. Inam as obtaining on the (a) National Identity Card, (b) the Return of Income for the year 2001‑2002, and (c) the notice under section 144, dated 30‑4‑2001 issued by the ALIT, Circle‑12, Zone‑B, Lahore are all similar. The parentage on the National Identity Card furnished to the Bank is Sh. Muhammad Islam which is the same on the NIC of which copy was given by the complainant himself. All these documents leave no shadow of doubt that Mr. Muhammad Inam is the same person against whom tax evasion information was provided by the present Complainant (Mr. Shaukat Ali) identifying Bank Account No. 700‑5 operated for the business carried on under the name and style: Messrs Pak National Industry, Quetta with branch at Ferozepur Road, Lahore and his father's name is Sh. Muhammad Islam. All the documents were shown to the complainant during the course of hearing whereupon he conceded that the respondent was justified in transferring the assessment records to Quetta on "point of jurisdiction" but still held the view that it would have been far better if the case was finalized at Lahore because of convenience for him to pursue the claim for cash reward after the framing of assessment. He was apprised that the Department had to abide by the principles of jurisdiction in the Income Tax Ordinance and the practice followed in this behalf. Moreover, the Assessing Officer of Quetta was better placed to make proper assessments because Mr. Muhammad Inam resides at Quetta and his main business (i.e. Coal 'supplies) originates from Quetta. In addition, the property from which income is declared/assessed in Mr. Inam's hands is situated in Quetta. The Assessing Officer, Quetta who is seized of the matter appeared well versed with facts and circumstances of the case as also with factum of evasion for which he has already initiated action under section 65 for the years‑ 1997‑98 and 1998‑99, has obtained the returns and, hopes that assessment `when finalized would result in further tax demand on the basis of which the complainant would become eligible for "reward" for valuable information furnished by him which is gainfully being utilized for additional assessments under section 65 of the Ordinance.

5. No mala fide could be attributed to ACIT Circle‑12, Zone‑B, Lahore. The complaint has obviously been filed by Mr. Shaukat Ali, with personal motive to secure convenience to pursue claim for "cash reward". This has resulted in burdening valuable time and energy of Federal Tax Ombudsman Secretariat as well as of the Officers of Income Tax Department, in addition to the loss suffered by the State by way of TA/DA expended on trawl of DCIT Quetta all the way to Lahore to represent the respondent and to present the record.

6. On the basis of aforementioned facts and circumstances the case is closed but invoking the provisions of section 14(4) of the F.T.O. Ordinance, a sum of Rs. 10,000 is imposed on the complainant as compensation to the Revenue Division for a frivolous complaint against functionaries simply to grind his own axe. It is recommended that C.B.R. deduct the above amount from the `cash reward', which may become due to the complainant, in addition to an amount equal to TA/DA payable to the DCIT, Quetta for the Lahore tour.

7. Compliance report should be submitted within 30 days of the receipt of this order.

C.M.A./M.A.K./261/FTO

Order accordingly.