Ch. MUHAMMAD BASHIR VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2002 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 2626 (2002)

Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S.93(2)‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV. of 2000), S.9‑‑‑Recovery of tax by Tax Recovery Officer‑‑‑Issuance of invalid notice of demand‑‑‑Outstanding demands‑‑‑Assessing Officer admitted that the basic responsibility for issuance of the invalid notice was his and that he had already received a letter of warning from the Commissioner in that regard‑‑‑According to department's reply income‑tax .0‑r ears were outstanding against the complainant for the assessment years 1991‑92 to 1997‑98‑‑‑Record also showed that substantial arrears were outstanding from different dates‑‑‑Said arrears had neither been recovered nor otherwise settled during all. these years which reflected the Assessing Officer's lack of control over the affairs of the Circle as well as the total absence of supervision by the higher officers‑‑‑Complainant was actually a Bank employee and could have been easily contacted at the time when any tax demand was found to lave remained unpaid instead of allowing the demand to accumulate over the years without ascertaining its status in fact it was supposed to be customary for the Inspecting Additional Commissioner and Commissioner of Income‑tax to hold regular meeting with the Assessing Officer to discuss major items arrears in their circles‑‑‑One of the advantages of such meetings was that all such bogus arrears where the demand had been set aside or reduced or had already, been paid were eliminated while effective steps were taken for recovery of arrears which stood ascertained‑‑ Revenue Division was, therefore, once again asked to pay adequate attention to the problem resulting from lack of supervision and to take effective remedial steps in. that connection‑‑‑Complainant's grievance stood. redressed and the concerned Assessing Officer had been warned and the matter was closed by the Federal Tax Ombudsman.

Nemo for the Complainant.

Ms. Shazia Abid, DCIT arid Ahsan Ali Shah, ACIT for Respondents.

FINDINGS/DECISION

This is a complaint by a salaried individual against a notice under section 93(2) of the Income Tax Ordinance received by him. The main points in the complaint are as under:

(i) The complainant is a Government servant and has already paid the tax due for the assessment year 1999‑2000.

(ii) Despite the fact that no tax is due from the complainant for the assessment year 1999‑2000, he has received a recovery notice from the Tax Recovery Officer. Gujar Khan for recovery of tax arrears for the said year.

(iii) As the complainant is a Government servant no particulars of his income can be concealed. The recovery notice is, therefore, illegal.

It has been prayed that the notice under section 93(2) may be declared as invalid.

2. The respondent's reply has been received and its representatives have attended and have been heard. No one has, however, appeared on behalf of the complainant. In the respondent's reply it is stated that for the assessment year 1999‑2000 wealth tax demand of Rs.10,774 had been created vide assessment order dated 8‑5‑2000. The assessment was, however, set aside by the CIT (Appeals) vide his order dated 11‑6‑2001 and the re‑assessment resulted in nil assessment. It is stated that the recovery notice for Rs.10,774 was issued inadvertently and has now been withdrawn. It is also stated in the reply that the CIT has been directed to serve a warning on the Assessing Officer for issuing a notice relating to the non‑existence demand. The respondent's reply, however, also contained a list of arrears of income‑tax and penalty pertaining to different years from assessment years 1991‑92 to 1997‑98 for which too separate recovery notices are said to have been issued to the complainant.

3. During the hearing, Mr. Ahsan Ali Shah. ACIT, who had issued the notice under section 93(2) explained that he had joined the Circle in August, 2001 and that while the wealth tax assessment had been set aside in appeal on 21‑10‑2000 an order of re‑assessment at below taxable wealth had also already been passed on 11‑6‑2001. It was submitted that ACIT's predecessor should have taken the tax demand to minus account when it was set aside on 21‑10‑2001 but actually it was not taken to minus even when the complainant's wealth was assessed at below the taxable limit on 11‑6‑2001. The ACIT, however, admitted that the basic responsibility for issuance of the invalid notice was his and that he had already received a letter of warning from the Commissioner in this regard.

4. Before parting with the case, it must be pointed out that according to the respondent's reply income‑tax arrears of Rs.109,738 are outstanding against complainant for the assessment years 1991‑92 to 1997‑98. It was seen from the record that substantial arrears are outstanding from different dates beginning with 20‑6‑1994 and including various dates in 1996, 1997, 1998 and 2000. It is indeed strange that these arrears have neither been recovered nor otherwise settled during all these years. This reflects the Assessing Officer's lack of control over the affairs of the Circle as well as the total absence of supervision by the higher officers. The complainant is actually a Bank employee and could have been easily contacted at the time when any tax demand was found to have remained unpaid instead of allowing the demand. to accumulate over the years without ascertaining its status. In fact it is supposed to be customary for the IACs and CITs to hold regular meetings with the Assessing Officers to discuss major items of arrears in their circles. One of the advantages of such meetings is that all such bogus arrears where the demand has been set aside or reduced or has already been paid is eliminated while effective steps are taken for recovery of arrears which stand ascertained. Revenue Division is, therefore, once again asked to pay adequate attention to the problem resulting from lack of supervision and to take effective remedial steps in this connection.

5. As regards the present complaint, the complainant's grievance stands redressed and the concerned Assessing Officer has been warned. The matter is, therefore, closed.

C.M.A./M.A.K./390/FTO

Order accordingly