Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)----

----S. 2(3)---Income Tax Ordinance, (XXXI of 1979), 3rd Sched: R.7-- Maladministration---Non-issuance of decision of appeal by the First Appellate Authority even after 2/3 time hearings---Validity---Appeal was heard twice but no decision was made---No grounds had been shown or repeated hearings and not deciding the appeal till it was transferred which proves inefficiency, negligence and inaptitude in discharging of official duties---Matters even after change of jurisdiction should not be transferred because the hearing had been completed and decision was to be pronounced---Where any party pleaded good faith he must state the facts and reasons to justify the same---Any negligence committed in discharge of duty without reasonable cause could not be said to be in good faith---No reasonable cause to justify the delay in not pronouncing the decision even after repeated hearings had been given-- Maladministration on the part of both the Commissioner of Income tax (Appeals) was established---Federal Tax Ombudsman recommended that Central Board of Revenue directs the concerned Commissioner of Income Tax (Appeals) to dispose of the appeal filed by the complainant/assessee within 30 days; Central Board of Revenue to issue letter of warning to Commissioner of Income Tax (Appeals) Bahawalpur to be vigilant in performance of the duties; explanation of Commissioner of Income Tax (Appeals) Multan who twice heard the appeals and did not pass order be called and necessary action be taken and Central Board of Revenue to consider to issue instructions that when jurisdiction in appeals is transferred, the appeals in which arguments have been completed by the parties and were reserved for judgment should not be transferred to the hew jurisdiction.

Ch. Mohammad Asghar Saroha for Complainant.

S. Shahid Hussain (A-CIT) Bahawalpur for Respondent.

DECISION/FINDINGS

In this complaint 'maladministration' has been alleged on behalf of the ACIT Circle 22 Lodhran and Commissioner Income Tax (Appeals) Multan and Bahawalpur.

2. It has been pleaded that the complainant is an Agriculturist and owns 8 to 10 squares of agricultural land. He was also a shareholder in Cotton Ginning Factory situated in Lodhran. He filed Income Tax Return for the assessment years 1996-97 and declared income as under:--

(i)Agricultural IncomeRs.4,00,000.

(ii)Share from business incomeNil

It has been alleged that he did not receive any share income from Cotton Ginning Factory because it was lying closed and did not carry any business. He received compensation of Rs.30,28,026 from National Highway Authority for acquisition of his agriculture land. Mango Orchard and Animal Shed which was completely demolished. The Taxation Officer without looking into the facts of the case made an addition of Rs.15,14,113 to the income of the assessee. The complainant filed an appeal against the assessment before the CIT(Appeals) who set aside the assessment order on 14-12-1999. The re-assessment was completed by the Taxation Officer by order, dated 30-6-2001 on the same pattern as in the original order.

The complainant again filed appeal against the above re-assessment order on 25-1-2002 with the CIT (Appeals) Multan. This appeal was heard by the CIT(Appeals) on 19-3-2002 but no order was passed by him for almost two months. On 22-5-2002 again the case was heard but still no order was passed by the CIT(Appeals) for about five months. The complainant has alleged that the appeal has been transferred to CIT (Appeals) Bahawalpur on 2-10-2002 where it is still pending.

3. In reply the facts have not been denied. It has been pleaded that on 1-7-2002 the jurisdiction of Bahawalpur Zone was modified and on 2-10-2002 the appeal was transferred to ACIT (Appeals) Bahawalpur. It has further been stated that the hearing of appeal was fixed on 28-12-2002 and appellate order will be written when proceedings are finalised. It has been pleaded that no mala fide is involved because no delay has been caused in the case. The proceedings can be finalised earlier if the assessee attends properly.

4. Mr. Shahid Hussain Asstt. Commissioner representative of Revenue contended that the case of the assessee was pending before the CIT(Appeals) Bahawalpur and the decision be kept pending on this complaint till the order of CIT (Appeals) is received. He further contended that Taxation Officer estimated the profit on the compensation received keeping in view the provision of rules 7 of 3rd Schedule to the Income Tax Ordinance, 1979.

5. An examination of the plea taken by the respondents and reply submitted by them clearly establishes negligence and inaptitude on the part of both the CITS (Appeal) who had heard the appeal at Multan and Bahawalpur. The appeal was heard by the CIT (Appeals) Multan twice on 19-3-2002 and 22-5-2002 but no decision was made. No grounds have been shown for repeated hearings and not deciding the appeal till it was transferred to Bahawalpur on 2-10-2002. This clearly proves ineffi ciency, negligence and inaptitude in discharge of official duties. Again on transfer CIT (Appeals) Bahawalpur heard the appeal on 28-12-2002 but till the hearing of the complaint the decision had not been pronounced. The plea of the respondents that the proceedings can be finalised earlier if the assessee attends properly is merely an attempt to justify the negligence. The respondents have not stated in the reply that the assessee had not been attending the cass properly. In fact the appeal was heard on 28-12-2002 and it was the duty of the CIT (Appeals) to dispose it of within reasonable time after the hearing. This is again negligence and inaptitude in performance of duty. It is significant to note that when CIT (Appeals) Bahawalpur had heard the appeal twice and the matter was pending for decision it was his duty to have decided it. Such matters even after change of jurisdiction should not be transferred because the hearing had been completed and decision was to be pronounced. The maladministration on the part of both the CITS is established.

6. In reply the CIT (Appeals) Bahawalpur has pleaded that there is no mala fide involved in it which means-that either there has been no delay in deciding the appeal or it happened in good faith. Where any party pleads good faith he must state the facts and reasons to justify it. Any negligence committed in discharge of duty without reasonable cause cannot be in good faith. There is no reasonable cause to justify the delay in not pronouncing the decision even after repeated hearing.

7. It is therefore, recommended as follows:--

(i)C.B.R. direct CIT (Appeals) Bahawalpur to dispose of the appeal filed by the complainant within 30 days.

(ii)C.B.R. to issue letter of warning to CIT (Appeals) Bahawalpur to be vigilant in performance of the duties.

(iii)Explanation of Commissioner Income Tax (Appeals) Multan who twice heard the appeals and did not pass order be called and necessary action be taken.

(iv)C.B.R. consider to issue instructions that when jurisdiction in appeals is transferred the appeals in which arguments have been completed by the parties and are reserved for judgment should not be transferred to the new jurisdiction.

(v)Compliance be reported within 45 days.

C.M.A./810/FTOOrder accordingly