ISMAT JAHAN VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2003 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 190 (2002)

Finance Act (V of 1989)‑‑‑

‑‑‑‑S. 7(8A)‑‑‑Wealth Tax Act (XV of 1963), S.25‑‑‑Capital Value Tax Rules, 1990, R.8‑‑‑C.B.R. Circular No.9 of 1997, dated 24‑7‑1997‑‑ Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.3(1)(a), (b) & 9(2)‑‑‑Capital Value Tax‑‑‑Levy of‑‑ Revision application‑‑‑Demand of fee for revision‑‑‑Commissioner of Wealth Tax demanded revision fee amounting to Rs.1,000 under S.25 of the Wealth Tax Act, 1963‑‑‑Validity‑‑‑Subsection (8A) of S.7 of the Finance Act, 1989 empowered Commissioner of Wealth Tax to revise any order made under S.7 of the Finance Act, 1989‑‑‑No clause existed in S.7 of the Finance Act, 1989 or the Capital Value Tax Rules, 1990 for payment of revision fee amounting to Rs.1,000‑‑‑Even in C.B.R. Circular No.9 of 1997 dated 24‑7‑1997, it had not been clarified that revision fee under S.25 of the Wealth Tax Act was payable‑‑‑Only Ss.30, 31 & 32 of the Wealth Tax Act have been referred in S.7 of the Finance Act, 1989 and the Capital Value Tax Rules, 1990‑‑‑Said section deals only with recovery proceedings ‑‑‑Section..25 of the Wealth Tax Act, 1963 was not applicable in the matter relating to Capital Value Tax‑‑‑Act of the Commissioner of Wealth Tax was contrary to law and rules, hence fell within the definition of maladministration ‑‑‑Federal Tax Ombudsman recommended that the Commissioner of Wealth Tax should decide the revision application of the complainant dated 1‑11‑2001 on merits without asking for revision fee.

Saeed Rana for the Complainant.

Manzoor Ahmad, D.C.I.T. Circle 2, Sargodha for Respondent.

DECISION/FINDINGS

It is alleged in the complaint that 7 pieces of agriculture land were mutated in the name of the complainant during the year 1998. The special Officer of Circle 9, Mianwali served a recovery notice dated 24‑10‑2001 demanding Rs.77,590 and Rs.34,515 as Capital Value Tax and Additional Tax respectively. The Complainant filed a revision application before the Commissioner of Wealth Tax on 3‑11‑2001. Thereafter, she received a letter from the Commissioner demanding revision fee amounting of Rs.1,000.

2. The complainant has prayed that demand of Commissioner of Wealth Tax for revision fee amounting to Rs.1,000 be declared as illegal.

3. The departmental reply dated 1‑4‑2002 explains that Capital Value Tax and Additional Tax has been charged under rule 8 of the Capital Value Tax Rules, 1990 and the revision fee has been demanded by the Commissioner in accordance with subsection (8A) of section 7 of the Finance Act, 1989 and Circular No.9 of 1997. The Commissioner of Wealth Tax has been authorized to hear such revision application and payment of specific revision fee is a statutory requirement, as provided under section 25 of the Wealth Tax Act, 1963.

4. Mr. Rana Saeed, Advocate, contended that section 25 of Wealth Tax Act, is not applicable in matters relating to Capital Value Tax. He relied on subsection (8A) of section 7 of the Finance Act, 1989 and para. 5 of Circular No. 9 of 1997.

5. Mr. Manzoor, DCIT, contended that the matter is sub-judice before the Commissioner of Wealth Tax, hence it is out of jurisdiction under section 9(2) of the Establishment of the Office of Federal Tax Ombudsman, 2000.

6. The merits of the pending revision application have not been argued by the complainant and she has only challenged the act of the Commissioner in issuance of a notice requiring the deposit of revision fee which according to her has no legal footing and falls within the definition of maladministration under section 3(i)(a) and (b) of the Establishment of Office of the Federal Tax Ombudsman.

7. Para. 1 of the letter issued from the office of Commissioner of Wealth Tax is reproduced as under:

"Whereas a revision petition has been filed by you on 3‑11‑2001 against the levy of Capital Value Tax amounting to Rs.112,505. Now, therefore, you are requested to please provide proof of payment of revision fee in this regard by 20‑12‑2001. It may please be noted that your revision is being heard under subsection (8A) of section 7 of the Finance Act, 1989 as amended

from time to time, and provisions there under read with para. 5 of Circular No.9 of 1997 authorize the Commissioner of Wealth Tax to hear such revision petitions, and for filing such revisions, specific amount of revision fee is statutory requirement as provided under section 25 of the Wealth tax Act, 1963. "

8. Subsection (8A) of section 7 of Finance Act, 1989 empowers the Commissioner of Wealth Tax to revise any order made under section 2 of the Act. There is no clause in section 7 of the Finance Act, 1989 and the Capital Value Tax Rules, 1990 for payment of revision fee amounting to Rs.1,000. Even in Circular No.9 of 1997 it has not been clarified that revision fee under section 25 of Wealth Tax Act, is payable. In section 7 of the Finance Act, 1989 and Capital Value Tax Rules only sections 30, 31 and 32 of the Wealth Tax Act have been referred. These sections deal with only recovery proceedings. Section 25 of the Wealth Tax Act is not applicable in the matter relating to Capital Value Tax. The act of the Commissioner is contrary to law and rules hence falls within the definition of maladministration.

9. Under the circumstance it is recommended that the Commissioner of Wealth Tax to decide the revision application of the complainant dated 1‑11‑2001 on merit without asking for revision fee.

10. The complaint is disposed of accordingly.

C.M.A./509/FTO Order accordingly.