Messrs ABSON DIFFUSION (PVT.) LTD VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2002 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 3003 (2002)

Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑S.65‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.11‑‑‑Additional assessment‑ ‑‑Controversy was as to whether the proceedings under S. 65 of the Income Tax Ordinance, 1979 could be initiated in the assessee's case‑‑‑Both the parties agreed that the case might be fixed for hearing before the Assessing Officer‑‑‑Federal Tax Ombudsman directed that Assessing Officer to hear the case on 15‑2‑2002 and afford, full opportunity to the petitioner of being heard and pronounce the order by dealing with all the contentions raised in the reply to the notice dated 6‑3‑2002 and such other contentions which may be raised during hearing orally or in writing and order be a speaking order that order be passed within two weeks of the hearing and copy of the order be supplied to the Secretariat of Federal Tax Ombudsman and the petitioner within one week of the date of order.

1997 PTD 1143 and 2000 PTD 2193 ref.

Saadat Farooq Ahmed, Additional Commissioner of Income‑tax for the Department.

Dr. Ilyas Zafar for the Complainant.

DECISION/FINDINGS

This is a complaint filed by the petitioner in which it has challenged the action taken by the Department under section 65 of the Income Tax Ordinance. The Department had first issued notice dated 1‑3‑2001 and 2‑5‑2001 under section 65 without prior approval of IAC. However, the department again issued a notice dated 16‑5‑2001 with the prior approval of IAC. Mr. Saadat Farooq Ahmed has produced a file to show that the prior approval had been obtained on 16‑5‑2001. It was challenged by the petitioner in the High Court of Lahore in Writ Petition No.9522 of 2001 but it was dismissed with the remarks that the petitioner should avail the departmental remedy under the statute. Mr. Saadat Farooq Ahmed states that IAC was filed by the petitioner but it was withdrawn.

2. Alongwith the complaint the learned counsel for the petitioner had filed an application under section 33 of the Establishment of the Federal Tax Ombudsman Ordinance, 2000. A meeting was called and both the parties have appeared. After discussion it seems that there is no possibility to resolve the dispute under section 33. The main complaint was, therefore, considered.

3. Dr. Ilyas Zafar the learned counsel for the petitioner stated that the Department is not complying with the order passed by the High Court and he has received message that whatever may be the arguments, the Department has to pass order against the petitioner. On the other hand Mr. Saadat Farooq Ahmed, learned representative for the department has stated that there is no truth in this allegation. Although hearing was fixed, no one appeared on behalf of the petitioner: The learned counsel for the petitioner has contended that notice under section 65 of the Income Tax Ordinance is illegal. He further contended that in view of the judgments of the Tribunal reported in 1997 PTD 1143 and 2000 PTD 2193 in cases falling under section 80CC regime there is no scope for action under section 65. On the other hand the learned representative of the Department has produced a judgment of the High Court of Lahore in which a contrary view has been expressed.

4. The controversy as discussed above and argued by .the learned representatives seems to be whether in petitioner's case proceedings under section 65 of the Income Tax Ordinance can be initiated. In view of the judgment of the High Court in Writ Petition No. 9522 of 2001 I would refrain from making any observation. However, the allegation that the department is not prepared to hear and do justice ta4he petitioner, it would be just and proper to follow the judgment of the High Court in letter and spirit. A proper hearing should be afforded to the petitioner and a speaking order be passed dealing with all the contentions raised by the petitioner. He has submitted a reply dated 6‑3‑2002 to the notice under section 65 in which all the contentions and objections have been raised. It would be proper if a date fixed for hearing before the Assessing Officer. Both the parties agree that he case may be fixed for hearing before the Assessing Officer on 15‑4‑2002. The Assessing Officer will hear the learned counsel for the petitioner and shall pass a speaking order dealing with all the contentions raised on behalf of the petitioner. The order should be passed within two weeks of the date of hearing and copy forwarded to this Secretariat within one week thereafter.

5. It is recommended that:‑

(i) The Assessing Officer to hear the case on 15‑2‑2002 and afford full opportunity to the petitioner of being heard.

(ii) Pronounce the order by dealing with all the contentions raised in the reply to the notice dated 6‑3‑2002 and such other contentions which may be raised during hearing orally or in writing. The order be a speaking order.

(iii) Order be passed within two weeks of the hearing.

(iv) Copy of the order be supplied to this Secretariat and the petitioner within one week of the date of order.

(v) Compliance be reported within one week of the date of order.

C.M.A./M.A.K./438/FTO ????????????????????????????????????????????????????????????????? Order accordingly.