Survey for Documentation of National Economy Ordinance (XV of 2000)-----

----S. 3---Income Tax Ordinance (XXXI of 1979), S.62---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Objection against assessed sales by the survey team was pending---Assessment of sales on the basis of third survey by the Tax Department---Validity---Department had impliedly conceded the receipt of representation made by the assessee to the concerned Authorities which had not been decided as yet---Commissioner of Income Tax had contacted the Military Authorities for disposal of all such pending applications---Estimate made during third survey was not binding on the complainant/assessee and it could not be made basis for assessment-- Any valid and binding survey estimate could be used as a reference and the assessee had a history of assessment which should be given due consideration---Such facts established maladministration-- Federal Tax Ombudsman recommended that the complainant/assessee's representation on the issue pending with the concerned Authorities be decided strictly on merit after physical inspection within 30 days of the receipt of this order.

Complaint No.938 of 2002 and Complaint No.582 of 2001 ref.

Saeed Ahmad Shah for the Complainant.

Muhammad Arif, Additional Commissioner, Sialkot Range and Muhammad Younas, I.T.O. for Respondent.

FINDINGS/ORDERS.

The complainant, Mr. Tehseen Anjum is an existing income-tax assessee of Circle-10, Sialkot on National Tax No.19-10-16954. It is alleged that during the survey operation in the year 2000 the sales were arbitrarily estimated at Rs.14,00,000 by the survey team against the declared sales of Rs.70,000 and the signature of the complainant was obtained by influence and coercion on the alleged agreement. It is stated that the complainant agitated against the aforesaid treatment and addressed applications to the concerned authorities within the stipulated period, but no response has been received from them so far. It is stated that in similar cases the estimates of sales have been reduced by the survey team on representation. The complainant has cited the following four parallel cases in this regard:-

(i) Messrs Assad Garments, Lahi Bazar Sialkot, Circle 8.

(ii) Messrs Khadim Sweets.

(iii) Messrs Taj Traders, Circle 7 Sialkot.

(iv) Messrs Naveed W. Cloth House, Sekhi Attabar Bazar Sialkot, Circle 7.

2. It is reiterated that in many other cases the taxpayers' grievances on this issue have been redressed by the concerned authorities but his application is still pending. The complainant has prayed for issuance of directions to the concerned authorities to reduce the sales and quash the alleged agreement referred above.

3. The respondents have furnished parawise comments stating therein that the case of the complainant was brought on tax record on the basis of survey form received from the survey team: The complainant had originally declared his sales at Rs.8,00,000. However, during the third visit of the survey team the sales of the complainant were assessed at Rs.11,50,000 with his consent and agreement. It is further stated that since the complainant did not agitate the estimate of sale made by the survey team, it is presumed that he had accepted the aforesaid agreement. It is, however, further stated that the complainant addressed application to the Army Officer, Incharge Survey Team, Sialkot but no decision has yet been received from him. The CIT, Sialkot Zone has also contacted the Military Authorities for disposal of all such pending applications.

4. It is argued by authorized representative of the complainant that the information provided by the respondents in the parawise comments is not correct. The complainant was already an existing assessee of Circle-10, Sialkot on National Tax No.19-10-16954 before the survey was conducted in the year 2000. The assessments for the years 1998-99 and 1999-2000 were completed tinder section 62 of the repealed Income Tax Ordinance 1979 on the following income:--

The authorized representative of the complainant further argued that as soon as the complainant came to know of the alleged agreement referred above he made a representation to the CIT, Sialkot on 18-6-2001. Photocopy of the application and acknowledgment receipt have been furnished in this behalf. The complainant has also filed his affidavit stating therein that during the survey his signature was obtained by coercion and when he came to know later on that his sales had been estimated at Rs.14,00,000 allegedly with his agreement, he immediately made representation to the Commissioner concerned against the alleged agreement.

5. The authorized representative further pleaded that the complainant declared annual sales at Rs.70,000 during survey which have been recorded arbitrarily at Rs.8,00,000 an the survey form produced by the departmental representative during the course of hearing of .the case. He also denied the receipt of survey form wherein the declared sales are recorded at Rs.8,00,000 and estimated at Rs.11,50,000 with the consent of the complainant.

6. The departmental representative has stated that the case of the complainant was booked on the basis of survey extract received on 26-5-2001. He has produced the copy of the relevant order sheet showing the date of receipt as 26-5-2001 but it is not signed or initialed by the Assessing Officer. The authorized representative of the complainant reiterated that the survey report wherein alleged agreement was recorded has not been received so far. The figure stated in the complaint at Rs.14,00,000 is based on the verbal communication received from official of the Department. The authorized representative also pleaded that the representation was made to the concerned authorities within the reasonable time. He referred to the decision of the Federal Tax Ombudsman in a reported case where reasonable time has been stipulated as 90 days. The relevant extract from the decision in Complaint No.938 of 2002 is reproduced as under:--

"It has been observed that for filing revision application under section 115 of Code of Civil Procedure before amendment, no period of limitation was prescribed. However, the Courts as a matter of practice refused to entertain revision application presented more than 90 days after the date of the impugned decision. Reference can be made to 1996 SCMR 337 & 437, PLD 1995 SC 399, 1994 SCMR 833, PLD 1982 Lah 461 PLD 1996 Kar. 520 AIR 1933 Lah 175 AIR 1936 Sind 172. Reference can be made to Federation of Pakistan v. Muhammad Tariq Pirzada 1999 SCMR 2189 where question arose what would be the reasonable time for deciding a representation under Article 32 of the Establishment of .the Office of the Wafaqi Mohtasib (Ombudsman) Order, 1983 (President's Order 1 of 1983) and the following observation made:

"(15) It is true that Article 32 of the Order does not prescribe the time within which a representation is to be finally disposed of, nevertheless, justice and fair play demand that all such representations should be disposed of within a reasonable time. On the question of the quantum of time to be considered as reasonable for disposal of representations, having regard to the purposes of the Order, we are inclined to hold that representation under Article 32 of the Order normally should be disposed of within 90 days from the date of its presentation, except for valid reasons existing for extending the time further, under intimation to all concerned."

From the above judgments-of the superior Courts it is clear that where no period of limitation is prescribed for filing any objection or application it should be filed within a reasonable period which in. the normal course of judicial practice has been treated to be 90 days from the date of the impugned decision or action. "

7. The authorized representative of the complainant has also argued that the signature of the taxpayer taken on the survey form during the survey is not to be considered as agreement as already pronounced by the FTO in a number of complaints on this issue. The relevant extract from the decision in Complaint No.582 of 2001 is reproduced as under:--

"Signatures against all the three items containing figures filled in team cannot be treated as an agreement with the assessee.

The authorised representative has pleaded that the complainant's representation on this issue is pending with the concerned authorities.

8. The arguments of both sides have been considered and the records produced by the departmental representative have also been examined. The departmental representative has not been able to establish by any evidence that the copy of the survey report was provided to the complainant. The copy of the order sheet produced by him is not signed by any officer and, therefore, the entries made therein cannot be relied upon. The departmental representative has also not been able to reconcile the discrepancies pointed out by the complainant in the survey form, dated 3-12-2000 and the copy of the survey extract produced by him during the course of hearing. It is pertinent to point out that the respondents have impliedly conceded the receipt of representation made by the complainant to the concerned authorities in the parawise comments which has not been decided as yet. It is also stated therein that the CIT, Sialkot has contacted the Military Authorities concerned for disposal of all such pending applications. In these circumstances the estimate made during third survey is not binding on the complainant- and it cannot be made basis for assessment. Any valid and binding survey estimate can be used as a reference and the assessee has a history of assessment which should be given due consideration.

9. The facts stated above establish maladministration and it is recommended as under:---

(i)The complainant's representation on the issue pending with the concerned authorities be decided strictly on merit after physical inspection within 30 days of the receipt of this order.

(ii)Compliance be reported within a week thereafter.

C.M.A./818/FTOOrder accordingly.