SARWARY BEGUM VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2003 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 134 (2002)

Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.92 & 12(18)‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.2(3) & 9‑‑‑Recovery of tax from person holding money on behalf of an assessee‑‑‑Complainant/assessee blamed the Department of heartlessness in initiating recovery measure for attachment of her salary by action under S.92 of the Income Tax Ordinance, 1979 and denied having received any notice for re‑assessment and alleged that the signatures on the record were all fake/forged although notice could be easily served on her because her residence was just a few yards away from the Income‑tax Office‑‑‑Validity‑‑‑Scrutiny of record revealed several deficiencies, which fell under the definition of 'maladministration' as per S.2(3) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000‑‑‑Said deficiencies were Original assessment framed on 30‑5‑1996 was set aside for de novo treatment by the A.A.C. on 29‑6‑1999, ex parte re‑assessment was made after more than six month (i.e. on 25‑1‑2000); reassessment order was served on the Complainant on 26‑3‑2001 that is after 14 months and for this long delay no plausible reason could be offered; Appellate Assistant Commissioner had set aside the assessment dated 30‑5‑1996 with the clear direction to consider the applicability of S.12(18) of the Income 'Fax Ordinance. 1979 which was on the statute book for the relevant assessment year and had also directed to ascertain whether an amount of Rs.50,000 was repaid out of the loan of Rs.150,000 "and what was the actual figure of loan at the close of assessment year under reference" assistant Commissioner of Income‑tax made no endeavour, to look into these points and repeated the original figures of the assessed income by passing an effortless order under S.63 of the Income Tax Ordinance, 1979, directions by the A.A.C. were completely ignored rendering the dispensation unsustainable‑‑‑Such lapses, fell under 'maladministration, Federal Tax Ombudsman recommended that Commissioner of Income tax to amend the reassessment framed on 25‑1‑2000 by resort of S.122 of the Income Tax Ordinance, 2001 and amended assessment for 1993‑94 he reframed de novo following the directions by the A.A.C. and the Central Board of Revenue instructions on the subject.

Complainant in person.

Zubair Bilal, D.C.I.T. for Respondent.

DECISION/FINDINGS

The complainant, an individual, prays for order "against the recovery Income Tax Notice amounting to Rs.23,097 issued by the A.C.I.T./W.T., Circle 17, Muzaffargarh to be withdrawn".

2. Respondent's reply dated 27‑5‑2002 explained that the complainant purchased a property for Rs.300,000 in which investment to the extent of Rs.150,000 remained unexplained and hence the same was added to the admitted salary income of Rs.19,530. This resulted in total Income for the assessment year 1993‑94 at Rs.169,530. This assessment was set aside in appeal but the de novo proceedings were not participated by the complainant which left no choice with the Assessing Officer then to repeat the same treatment as in the original assessment. It is submitted: "no maladministration is involved in this case".

3. The complainant contended that the Department framed the re assessment ex parte at her back without serving statutory notices. She denied having received any notice and alleged that the signatures obtaining on the record were all fake/forged although notices could be easily served on her because her residence was just a few yards away from the Income‑tax Office. She blamed the Department of heartlessness in initiating recovery measure for attachment of her salary by action under section 92 of the Income Tax Ordinance. This was withdrawn only when she managed to deposit a sum of Rs.2,000 which was much too much for her because her monthly salary is lesser than this amount. The complainant was vociferous of the harsh and highhanded treatment meted out to her.

4. The representative of the Revenue averred that whatever was done was strictly in accordance with law. He insisted that section 12(18) of the Ordinance left no discretion with the Assessing Officer in respect of those sums, which were obtained as loan but had not passed through banking channel. It was emphasized by the Department's representative that the complainant had not contested the re‑assess meat through the appellate procedure provided in the Ordinance.

5. The discussion with the two representatives and the scrutiny of record revealed several deficiencies, which fall under the definition of maladministration as per section 2(3) of the Establishment of Office of Federal Tax Ombudsman Ordinance. These are:‑‑‑

(a) Original assessment framed on 30‑5‑1996 was set aside for de novo treatment by the A.A.C. on 29‑6‑1999. The ex parte reassessment was made after more than six months (i.e. on 26‑1‑2000).

(b) The re‑assessment order was served on the complainant on 26‑3‑2001 that is after 14 months. For this long delay no plausible reason could be offered.

(c) The A.A.C. had set aside the assessment dated 30‑5‑1996 with the clear direction to consider the applicability of sub -section (18A) of section 12, which was on the statute book for the relevant assessment year. He had also directed to ascertain whether an amount of Rs.50,000 was repaid out of the loan of Rs.150,000 "and what was the actual figure of loan at the close of assessment year under reference". The A.C.I.T. made no endeavour, to look into these points and repeated the original figures of the assessed income by passing an effortless order under section 63. The directions by the A.A.C. were completely ignored rendering the dispensation unsustainable.

6. In view of the foregoing lapses, which fall under 'maladministration', it is recommended:‑‑‑

(i) C.I.T. to amend the re‑assessment framed on 25‑1‑2000 by resort to section 122 of the Income Tax Ordinance, 2001.

(ii) Amended assessment for 1993‑94 be refrained de novo following the directions by the. A.A.C. and the C.B.R's. instructions on the subject.

(iii) Amended assessment be finalized within one month of the receipt of this order.

7. Compliance be reported within 45 days of the receipt of this order.

C.M.A./515/FTOOrder accordingly.