2002 P T D 1875

[Federal Tax Ombudsman]

Before Justice (R) Saleem Akhtar, Federal Tax Ombudsman

Mehr MUHAMMAD AMIR, CHINIOT

versus

SECRETARY, REVENUE DIVISION, ISLAMABAD

Complaint No. 101 of 2002.

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

‑‑‑‑S.9‑‑‑Income Tax, Ordinance (XXXI of 1979), Ss. 108, 116,139 & 156‑‑‑Maladminisration‑‑‑Grievance of complainant/Bank Manager was that Assistant Commissioner of Income‑tax had indulged in mal-administration by imposing penalty under S.108 of Income Tax Ordinance, 1979 by overlooking the fact that complainant had already filed the statement under S. 139 of Income Tax Ordinance, 1979 on 21‑11‑1998 in response to first notice, dated 12‑11‑1998 issued under S.116 of Income Tax Ordinance, 1979‑‑‑Department conceded that acknowledgments produced by complainant were signed by then Inspector Income‑tax posted in the Circle, but said statement/letter was neither found in inward Dak Register of the Circle nor on record‑‑ Complainant contended that once an official working in the Circle acknowledged the receipt of documents, then assessee would be considered to have duly discharged his liability and he could not be made to suffer for the malfunctioning of the Circle Office‑Validity‑‑ Complainant had not filed statement under S.139 Income Tax Ordinance, 1979 for the year ending on 30‑6‑1998 by the due date 1‑9‑1998, ‑ but he had discharged his liability on 21‑11‑1998, thus, he remained a defaulter from‑2‑9‑1998 to 20‑11‑1998 i.e. for a period of 80 days without any reasonable cause‑‑‑Fact of non‑availability on record the letters and statement submitted in reply to notices and delivered to Inspector of Income‑tax established negligence, lack of supervision and failure to maintain administrative discipline and control, which clearly amounted to maladministration Federal Tax Ombudsman recommended to the Revenue that Deputy Commissioner Income‑tax concerned should rectify the order under S.156 of Income Tax Ordinance, 1979 by reducing the period as well as Penalty for the default accordingly; that enquiry be instituted regarding non‑maintainability of complainant's letters, dated 21‑11‑1998 and 16‑2‑1999 and identify the persons responsible for such negligent act and that compliance be reported within specified time.

Khalid Mahmood, A.R. for the Complainant.

Ahmad Hussain Khan, D.C.I.T. Circle 7, Chiniot for Respondent.

DECISION/FINDINGS

The precise allegation in the instant complaint is that the ALIT, Circle 17, Chiniot has indulged in maladministration by imposing a penalty of Rs.26,000 under section 108 of the Income Tax Ordinance, 1979 on 31‑1‑1999 by overlooking the fact that the complainant had already filed the statement under section 139 of the Income Tax Ordinance on 21‑11‑1998 in response to his first notice under section 116, dated 12‑11‑1998.

2. Mr. Khalid Mahmood, the Authorized Representative of the complainant and Mr. Ahmad Hussain Khan, the D.C.I.T., Circle 7, Chiniot representing. the respondent have been heard. The complaint as well as the written reply of the respondent have been perused. It transpires that the complainant, Manager of Chiniot Branch of Agricultural Development Bank of Pakistan did not file the statement under section 139 of the Income Tax Ordinance, 1979 for the year ending on 30‑6‑1998 by the due date i.e. 1st September, 1998. He received a notice under section 116 of the Ordinance, dated 12‑11‑1998 from the ACIT and complied with it under a covering letter, datea 21‑11‑1998 acknowledged by Inspector of Income‑talc, Mr. Iftikhar Ahmed Lali by subscribing his signature on the copy of letter, on the same date.

3. However, the complainant received another notice under section 108, dated 22=1‑1999 and he again submitted a copy of the statement under section 139 that has been duly acknowledged by he same Inspector on the duplicate copy . Yet the penalty order holding the complainant in default till the date of order was passed by Mr. Zulfiqar Ali Zaheer, DCIT on 31‑1‑1999 and served upon the complainant. The complainant again approached the ACIT and filed another copy of the statement on 10‑2‑1999. ,

4. Mr. Ahmad Hussain Khan, the DCIT representing the respondent at the time of hearing concedes that the acknowledgments produced by the complainant are signed by the then Inspector posted in the Circle but neither any of the statement/ letter is found in the inward Dak Register of the Circle nor it is found on record. The A. R. of the complainant on the other hand contends that once an official working in the Circle acknowledges the receipt of the document, the, assessee has duly discharged his liability and he cannot be made to suffer for the malfunctioning of the Circle Office.

5.From the aforestated facts, it is clear that the complainant discharged his liability on 21‑11‑1998 and remained a defaulter from September 2 to November 20, 1998 i.e. for a period of, 80 days without any .reasonable cause. The correct facts came to light during these proceedings the fact that letters and statement submitted in reply to the notices delivered to the Inspector are not available on record, establishes negligence, lack of supervision and failure to maintain administrative ID discipline and control. This clearly amounts to maladminstration.

6.It is now recommended;

(i)That the D.C.I.T. concerned should rectify the order under section 156 of the Income Tax Ordinance, 1979 reducing the period as well as the penalty fot the default accordingly.

(ii)Enquiry be instituted regarding non‑maintainability of the complainant's letters . dated 21‑1‑1998 and 16‑2‑1999 and identity persons responsible for such negligent act

(iii)Compliance be reported within 45 days of the date of this order.

S.A.K./252/FTO

Order accordingly.