RAIS KHAN, SUPERINTENDING ENGINEER, CENTRAL CIVIL CIRCLE, PAKISTAN PWD, LAHORE VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2002 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 2072 (2002)

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

‑‑‑‑S.9‑‑‑Income Tax Ordinance (XXXI of 1979), S.56‑‑‑Wealth Tax Act (XV of 1963), S.17‑‑‑Complaint‑‑‑Filing of complaint‑‑‑Complaint mentioning names of ten officers including complainant without having authority from remaining nine officers‑‑‑Validity‑‑‑All ten officers had levelled serious allegations against the functionaries of Income‑tax Department‑‑‑Complainant at the time of heating was accompanied by another officer, whose name was also mentioned in the list of complainants and to whom notices were issued‑‑‑Both said officers were senior in their Department, thus, other eight persons naturally had confidence in them to put forth their point of view.

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

‑‑‑‑S.9(2)(b)‑‑‑Income Tax Ordinance (XXXI of 1979), S.56‑‑‑Wealth Tax Act (XV of 1963), S.17‑‑‑Jurisdiction of Federal Tax Ombudsman‑‑ Scope‑‑‑Misuse of official position by functionaries of Income‑tax Department‑‑‑Notices. under S.56 of Income Tax Ordinance, 1979 and S.17 of Sales Tax Act, 1963, were issued to complainant and his colleagues being officials of Pak PWD‑‑‑Object behind such notices was to force the complainant and his colleagues to execute some illegal civil/ electrical/mechanical works of the officers of Income‑tax Department‑‑ Validity‑‑‑Complainant had made allegations of maladministration cognizance of which could be taken by Federal Tax Ombudsman, thus, same did not fall out of jurisdiction by virtue of S.9(2)(b) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000.

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

‑‑‑‑S.9‑ ‑Income Tax Ordinance"(XXXI of 1979), Ss.50 & 56‑‑‑Wealth Tax Act (XV of 1963), S.17‑‑‑Maladministration‑‑‑Misuse of official position by officers of Income‑tax Department‑‑‑Officers of Income‑tax Department in order to get some illegal works executed through complainant and nine other officials of Pak PWD issued them notices under S.59 of Income Tax Ordinance and S.17 of Wealth Tax Act, 1963‑‑‑Complainant alleged such notices to be selective, targeted and mala fide‑‑‑Authority contended that complainant while posted within its jurisdiction failed to file his returns of income and wealth, thus, issuance of notices was legal, and that duty of Pak PWI) was to look after Income‑tax Department like other Government buildings and to do civil works where necessary‑‑‑Validity‑‑‑No‑Objection Certificate with regard to new lift installed in the building by a private company could not be demanded from complainant‑‑‑No documentary evidence was produced by complainant in support of allegation that civil work at official residence had also been demanded‑‑‑Ten officials from one department had been targeted for issuance of said notices just to use as a tool for pressurizing them to yield to the demand of Income‑tax Department‑‑ Out of said ten officials; four had already filed returns of income and were existing assessees one had since been transferred; and three had come on transfer and were regularly assessed on their earlier place of postings‑‑‑Notice to one official had not yet been issued‑‑‑Targeted officers of Pak PWD were all salaried persons from whom tax was deducted at source under S. 50 of Income Tax Ordinance, 1979‑‑‑If there was genuine anxiety to have complete record at the present jurisdiction, it would have been far better for Deputy Commissioner of Income‑tax to dispatch inquiry letters requesting to provide their National Tax Numbers‑‑‑Said notices had been selectively issued even ignoring that all income‑taxpayers were not wealth tax assessee also‑‑‑Circumstances evidenced from correspondence presented by complainant clearly gave out that Deputy Commissioner of Income‑tax was acting under the influence of his seniors or taking action in collaboration with them‑‑‑Deputy Commissioner of Income‑tax by issuing said notices had not transgressed his jurisdiction, but the element of mala fide intention was clearly visible on the face of record‑‑ Impugned action and proceedings were in ala fide, biased and discriminatory amounting to maladministration ‑‑‑Federal Tax Ombudsman recommended to Revenue Division that impugned notices and proceedings taken in pursuance thereof be cancelled; and instructions be issued to functionaries of the department not to resort to discriminatory or retaliatory actions as it was bound to generate ill‑will against functionaries of Income‑tax Department vis‑a‑vis taxpayers of whatever category.

Complainant in person.

Ghulam Rasool, D.C T. and Aurangzeb, S.O. for Respondent.

DECISION/FINDINGS

The complainant is the Superintending Engineer, Pak PWD incharge of the Government‑owned buildings /residences etc. In this capacity he looks after the civil work of these buildings at Lahore, Gujranwala, Sialkot and Sahiwal. It is complained that the officers/officials of the Income‑tax Department unduly pressurized him, and some other 9 officers /officials of Pak PWD, to accede to some unlawful and illegal demands like execution of Civil/Electrical/ Mechanical Works etc. which could not be carried out by the complainant and his colleagues, without jeopardizing their own position. It is alleged that harassment was caused by selective and targeted issuing of notices under section 56 of the Income Tax Ordinance, 1979 and under section 17 of the Wealth Tax Act, by the D.C.I.T. Circle 20, Zone‑B, Lahore. It is alleged: "all the notices issued by the said Deputy Commissioner are based on the mala fide intention and to create harassment amongst the functionaries of Pak PWD for their own gains". It is, according to the complainant, "misuse of the official position".

2. The respondent in the reply in vide No.RCIT‑J‑85/FTO/B‑SO 1/186, dated 2‑10‑2001 vehemently contends that the complainant is posted within the jurisdiction of Zone‑B, Lahore and failed to file his Returns of Income and Wealth and, therefore, the D.C.I.T., Circle 20 was well within his legal right to issue the notices. The allegation of putting undue pressure is totally denied. The respondent further contends that the complainant has mentioned the names of 10 persons in the complaint (including his own) without having been authority from the remaining nine persons. The complaint filed by the complainant is also stated to be without jurisdiction as per section 9(2)(b) of the Federal Tax Ombudsman Ordinance, 2000.

3. It is true that the complaint is not accompanied with any Power of Attorney by the other persons in favour of the principal complaint. However, at the time of hearing Mr. Rais Khan was accompanied by Mr. Muhammad Sadiq, Superintending Engineer, whose name also finds place in the list of persons to whom the notices were issued. Since both Mr. Rais Khan and Mr. Muhammad Sadiq are Senior Officers in their Department the other 8 persons naturally have confidence in them to put forth their point of view. The fact, however, remain that all the 10 gentlemen have levelled serious allegations against the functionaries of Income‑tax Department.

4. Mr. Ghulam Rasool Malik, D.C.I.T. who represented the respondent was heard. He could not successfully convince that the complainant fell out of jurisdiction under the provisions of section 9(2)(b) of the Establishment of Federal Tax Ombudsman Ordinance. The complainant has made allegation of maladministration ‑cognizance of which can be taken by the Federal Tax Ombudsman.

5. Mr. Rais Khan produced photostat copies of the correspondence exchanged between the Additional Commissioner, Eastern Region, Lahore, the Special Assistant to the Commissioner of Income‑tax, Zone‑B, Lahore on the one hand and Superintending Engineer and Executive Engineer, Pak PWD, Lahore on the other, on the issue of carrying out the civil work in the Income‑tax Building. N.O.C. with regard to repairs of `passenger lift' installed in the Income Tax Building, Zone‑B, Lahore was also allegedly demanded by the Income‑tax Department and since these demands could not be met, due to official restrictions, the D.C.I.T.,. Circle 20 was made an instrument for pressuring the officers/officials of Pak PWD so as to force them to accede to the demands of the Department. Mr. Ghulam Rasool, D.C.I.T. could not refute that the correspondence did take place between the Income‑tax Department and the Pak PWD but vigorously argued that no illegal demand was made to the officers of Pak PWD. He mentioned that it was the duty of Pak PWD to look after the Income Tax Building like any other Government building and to do civil work where necessary. Mr. Rais Khan, the complainant insisted that the N.O.C. with regard to the new lift installed in Kapoorthala House Building as demanded could not be issued by the Pak PWD as the said lift was installed by a private company known as Jeewa Ji Company. It was, therefore, unfair on the part of the respondent to ask for N.O.C. with regard to the work which was not initially carried out by the complainant. The complainant, however, could not produce any documentary evidence in support of the allegation that civil work at official residences also was demanded.

6. As regards the issuance of notices under section 56 of the Income Tax Ordinance, and under section 17 it is true that the D.I.C.T. Circle 20, Zone‑B, Lahore had the jurisdiction to issue these but it is not difficult to infer that D.C.I.T. was used as a tool for pressuring the functionaries of Pak PWD to yield to the demand of the Income‑tax Department. This inference gets support from the fact that ten persons from just one Department were targeted for the issuance of the above notices and that also soon after a disagreement on matters which were the subject of official correspondence. Mr. Ghulam Rasool, D.C.I.T. conceded that no notices were issued to any officers/officials of any other Department falling within the jurisdiction of Circle 20, during this period. Mr. Ghulam Rasool submitted, that after the filing of the complaint, the matter was discussed with the C.I.T., Zone‑B, Lahore who verbally directed to `file', the proceedings in those cases where NTN had been provided. At the present hearing, record as presented by the Representative of Revenue, was examined. It transpired that out of the ten persons to whom notices were issued four had already filed returns of income, and were existing assessees; one had since been transferred, and three have come on transfer and were regularly assessed on their earlier lace of postings. Notice to one gentleman has yet to be issued.

7. From the foregoing discovery of facts it transpires that the unpleasant circumstances preceding the complaint are a said episode and the resultant of mishandling of the situation by the Senior Officers of the two Departments. The targeted officers of the Pak PWD are all salaried persons from whom tax is deducted at source under section 50. As Government servants their place of postings have changed several times over the years and consequently their income‑tax record also moved from one city to another. If there was genuine anxiety to have complete record at the present jurisdiction, it would have been far better for the D.C.I.T. to dispatch enquiry letters requesting to provide National Tax Numbers. Insisted

notices under section 56 of the Income Tax Ordinance and under section 17 of the Wealth Tax Act, were selecting issued even ignoring that not all. income‑taxpayers are not necessarily wealth tax assessee also. It may be true that‑the C.I.T., by issuing notices under section 56 and under section 17 did not transgress his jurisdiction, yet the element of mala fide intention is clearly visible on the face of the record. The surrounding circumstances evidenced by the correspondence presented by the complainant clearly give out that the D.C.I.T. was acting under the influence of his seniors or taking action in collaboration with them. The impugned action and proceeding are mala fide, biased and discriminatory amounting to maladministration.

8. It is recommended that‑‑‑

(i) impugned notices and proceedings taken in pursuance thereof be cancelled;

(ii) instructions be issued to the functionaries of the Department not to resort to discriminatory or

retaliatory actions as it is bound to generate ill‑will against functionaries of the Income‑tax Departments vis‑a‑vis taxpayer of whatever category;

(iii) a compliance report be submitted within 30 days of the receipt of this order.

S.A.K./M.A.K./251/FTOOrder accordingly.