ITTEFAQ GINNING FACTORY, TOBA TEK SINGH VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2003 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 246 (2002)

Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss.50(4), 80‑C, 143‑B, 52, 51, 86 & 156‑‑‑Income Tax Rules, 1982, Rr.49, 50 & 64‑A‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.3(2), 9 & 10(4)‑‑‑Deduction of tax at source‑‑‑Tax on supplies by the complainant/assessee was deducted‑‑‑Tax deducted by the parties was neither deposited in Government treasury nor certificate of deduction was issued to the complainant/assessee‑‑ Complainant/assessee filed statement under S. 143‑B of the Income Tax Ordinance, 1979 without treasury challan/certificate of tax deduction at source and attached the details of parties with complete addresses who deducted the tax‑‑‑‑Assessing Officer created demand of same against complainant/ assessee in spite of the fact that proceedings were also initiated for the tax deducting against the complainant and demand was recovered on gun‑point by the Tax Recovery Officer causing harassment, disrespect and injury to the complainant instead of recovering taxes withheld by their agents on behalf of the State but not deposited into treasury as required under the law‑‑‑Validity‑‑‑Was extremely distressing that despite detailed findings and recommendations in several complaints, the senior officers in the Revenue Division as well as at Regional and Zonal levels have not been able to ensure that all assessees under statutory obligation to act as tax withholding agents deducted, collected and deposited the taxes so deducted and collected into the exchequer in accordance with law in time; that they issued prescribed certificate to assessees from whom such taxes were deducted or collected; and that they did file duly filled in monthly statements required under the rules prescribed under the law‑‑‑Such agents did not realize that it was their obligation to ensure that taxes paid by the assessee in various manners stipulated under the law were properly accounted for and posted in the cash books of the circles where they were assessed and copies of challans were placed in the miscellaneous cover of their respective assessment records for the relevant year‑‑‑Entire department suffers from the misconception that it was the onus of the assessees to produce evidence of payment of tax for which credit had been claimed in the return of income‑‑‑Responsibility falls upon the officers in the Central Board of Revenue. to dispel this totally unfounded belief of their subordinates effectively, they must realize that it was the most common irritant for taxpayers‑‑‑No efforts were made to take the remedial measures for lapses in the computerized tax accounting system recommended in the report laid before the President of Pakistan in January, 2002‑‑‑Such apathy was highly detestable‑‑‑Multidimensional maladministration identified in consequence of investigation in the present complaint warranted a serious consideration by the Secretary, Revenue Division himself‑‑‑Withholding agent, in the present case, had the audacity to tell the department that the tax withheld on behalf of State from the suppliers had been adjusted against the short supplies by the vendor‑‑‑Concerned officers instead of taking all possible legal actions against the withholding agent for admitted embezzlement of State funds kept on harassing the assessee who had already discharged its liability‑‑‑Had the two Special Officers who dealt with complainant's statement under S.143‑B of the Income Tax Ordinance, 1979 and the application under S.156 of Income Tax Ordinance, 1979 adopted the proper course of attempting to verify the claim on account of taxes withheld from the circles where the withholding agents were being assessed, the infringement of law and embezzlements of State revenue committed by them would have been exposed in 1994‑‑‑Order passed under S.52 of the Income Tax Ordinance, 1979 by the concerned Assessing Officer, holding complainants to be the assessee in default too was not effectively pursued; the appellate forums too, did not give a clear verdict through the issue neither had any accounting riddle nor any legal ambiguity‑‑ Such was indeed a matter of serious concern that the answer of the withholding agent before the Income Tax Appellate Tribunal on 16‑2‑2000 that they were no more in default because the amount of tax had already been recovered from the supplier was taken too lightly by the Assessing Officer, after the issue was remanded for fresh decision‑‑ Reason why the Federal tax administration remains very busy doing little was obvious, they neither demonstrated effectively nor proved convincingly that they took their job seriously and neither made example of black-sheep among the taxpayers even where they had the audacity to proclaim defiance not against such tax functionaries among their folds even when they exposed their negligence, inattention, delay, incompetence, inefficiency, inaptitude and arbitrariness in the discharge of their duties and responsibilities‑‑‑Since there was no visible attempt on their part as a class to distinct themselves from such rogue elements in society, the common perception that they were in league with them was gaining ground‑‑‑It was being reinforced by the enthusiasm of the senior officers to defend and support their delinquent subordinates in their written replies to the complaints filed in this office‑‑Was time for the conscientious persons among them to stand high and firm over and above such functionaries and be identified as a distinct class‑Federal Tax Ombudsman recommended that the Secretary, Revenue Division, ensured that the issue remanded by the Income Tax Appellate Tribunal vide order dated 16‑9‑2000 in I.T.A. No.2274/KB of 1996 was decided by July 15, 2002; that the State revenue amounting to Rs.298,588 deducted from the bills of complainant during the period referred to in the present complaint alongwith other such withholdings of State revenue identified in the order under S.52 passed in the cases of tax agent who deducted the tax but failed to deposit and embezzled were recovered alongwith the additional tax charged under S.86 of*the Income Tax Ordinance, 1979; that notices were issued under S.116 for default under S.108 for non -filing of statements prescribed under the Rules framed in pursuance of S.51 of the Income Tax Ordinance, 1979 and imposed penalties chargeable under the law and directed the Commissioner of Income Tax concerned to refer the matter of default committed by the company who deducted the tax but failed to deposit, to the Legal Advisors for prosecution to be filed against them; that direct the concerned Regional Commissioner of Income Tax (a) to ensure that the amount of Rs.298,588 unduly collected from the complainant on June 27, 1999 was refunded by June 27, 2002 alongwith compensation equal to the amount of additional tax calculated under S.86 of the Income Tax Ordinance, 1979 for the corresponding period and recoverable from the Collecting agent and (b) to direct the Competent Authority in the Zone where the said Special Officers were posted to initiate proceedings against them under Government Servants (Efficiency & Discipline) Rules, 1973 on account of their incompetence and inaptitude in discharge of their duties. Manner in which the officers processed on 20‑3‑1996 the statement filed by the complainant under S. 143‑B of the Income Tax Ordinance, 1979 as well. as its application under S.156 of the Income Tax Ordinance, 1979 on 3‑5‑1997 and secondly, by the explanation of their conduct offered by them personally during the course of hearing of the present complaint on 9‑5‑2002; that direct Regional Commissioner of Income Tax Central Region, particularly and all other senior officers subscribing their signatures‑to the written replies filed in response to notices issued under subsection (4) of section 10 of the Establishment of the Officer of the Federal Tax Ombudsman Ordinance, 2000 generally to ensure that the allegations in the complaint had been examined both factually and legally by the supervising and controlling officers of the functionary alleged to have caused the grievance; that explanation offered by the concerned officer personally or the factual position as evident from the record should be forwarded without making any attempt to defend the action of a subordinate (unless the action was taken on the orders of such senior officer himself) because while doing so they would render themselves responsible for the alleged maladministration that, in consequence of investigation, may turn out to be valid; that direct the Regional Commissioner of Income Tax, Central Region, to ensure that an enquiry was instituted; (a) to identity the DIT who issued certificate to the Tax Recovery Officer (TRO) specifying the amount of tax due from the complainant; (b) to offer the identified officer an opportunity to explain his conduct under the circumstances; (c) to offer an opportunity to the TRO to answer the allegations of highhandedness in performing his duties of recovering the amount certified by the DCIT; (d) to ensure that the Enquiry Officer submitted his report by July‑31, 2002 and (e) to ensure that the Competent Authority took the decision under the Rules by o August 30, 2002 and that direct the Member, Income Tax Central Board of Revenue to ensure implementation by PRAL of the recommendation made in the Special Report on Accounting System of Income Tax Collection, to give wide, publicity to the provisions of law as well, as the procedure prescribed under the rules regarding the duties and obligations of assessees in their capacity as the statutory tax withholding agents of State; to create awareness of their privileges among those from whose proceeds the taxes were deducted or on whose transactions taxes were collected at source by various withholding agents under the provisions of S.50 of the Income Tax Ordinance, 1979; to issue directions to the Inspecting Offers to conduct thorough inspection of one circle each month covering all aspects of performance including monitoring of taxes to be withheld by concerned assessees in that circle and the obligations to be fulfilled by them and to submit report by the 7th day of the following month to the Commissioner of Income Tax of the Zone with a copy to the Director, Inspection & Audit; and to ensure that entries of all taxes paid by or deducted or collected from each assessee are duly reported to the circle or any other authority holding jurisdiction over the assessment records of such assessee and he is allowed due credit at the time of assessment.

Sagheer Tirmizey for the Complainant.

S. M. Athar, Muhammad Ashraf, Muhammad Akram, Safdar Hussain, Syed Shujjat Hussain, Mian Munawar Ghafoor and Ijaz Ahmad Faizi for the Respondent.

FINDINGS/RECOMMENDATIONS

Complainant has alleged maladministration on the part of income Tax functionaries of Sargodha Zone for their failure to monitor performance of their agents for tax withholding under section 50, specifically under subsection (4) of section 50 and consequently causing harassment, disrespect and injury to the complainants instead of recovering taxes withheld by their agents on behalf of the State but not deposited into treasury as required under the law.

2. Brief facts were that complainant was running a cotton ginning factory at Toba Tek Singh. During the income year (1‑9‑1992 to 30‑9‑1993) relevant to assessment year 1994‑95 the complainant supplied cotton to Messrs Khurshid Spinning Mills Limited, Faisalabad (KSM) besides several other spinning mills. The amount of supply to and the tax deducted by KSM was as under:‑

3. KSM despite having deducted the tax under section 50(4) did not deposit the same into Government Treasury. Certificate of withholding the tax prescribed under section 51 in rule 64A as required to be given by the withholding agent was not given to the complainant either.

4. Messrs KSM the legally constituted deducting authority, was agent of the Department. The Department alone was liable and responsible for any acts or omissions of its own appointed deducting authority.

5. Statement under section 143‑B was filed for assessment year 1994‑95 declaring the amount of supplies and the tax withheld by various customers alongwith their complete particulars. However, since copies of treasury challans of taxes claimed to have been withheld, had not been enclosed with the statement, Mr. Safdar Hussain, Special Officer proceeded to pass an order ostensibly under sections 143‑B/80‑C on 20‑3‑1996 creating a demand of Rs.869,625. He neither made any attempt to verify the claim of taxes withheld, as per details enclosed with statements under section 143‑B, from the circles where those withholding agents were being assessed nor to verify from agents directly. When asked to explain his conduct, he stated that the onus to produce the proof of payment of tax was to be discharged by the assessee.

7. Application under section 156 filed on 29‑9‑1996 was also rejected on 3‑5‑1997 by Special Officer, Mr. Syed Shujaat Hussain. Explaining his conduct during the course of hearing he also submitted that the assessee had neither produced the copies of paid challans nor the certificates prescribed under section 51 in rule 64A.

8. Ultimately, the Accountant of the Complainant himself approached the concerned spinning mills to collect copies of challans where they had already deposited the tax and to persuade those who had failed to do so and give him the copies of challans. Following Mills had already deposited the payments:

11. Meanwhile, the DCIT, Company Circle‑06, Faisalabad had passed an order under section 52 in the case of KSM on 18‑4‑1995 because he had found, in the course of monitoring of deduction of tax that the company deducted an amount of Rs.1,840,000 under section 50(4) of the Income Tax Ordinance, 1979 but did not pay it into the treasury.

12. In response to his notice under section 52, Mr. Muhammad Tariq of KSM attended the proceedings and admitted the company had deducted the said amount from the parties but had still not deposited it into the treasury. He, therefore, treated KSM as an assessee in default and held it liable to pay Rs.1,840,000 on account of tax withheld and a further sum of Rs.250,721 on account of additional tax under section 86 of the Income Tax Ordinance.

13. KSM filed an appeal before the CIT (Appeals) and, inter alia, it was stated before him:

"(i) We provided details of Rs.1,841,390 and copies of exemption certificates received from the concerned parties, as a result of which Rs.402,896 was refunded to the parties.

(ii) An amount of Rs.1,043,993 relates to the parties who had caused the company substantial losses due to non‑fulfillment of cotton contracts and as a result of which the company had to lift cotton from other sources at very higher rates, due to these losses the amount due to these parties was adjusted against, such losses.

(iii) After adjustment of the above two amounts, a balance of Rs.394,496 represents the actual amount of tax deducted at source out of which Rs.361,648 has already been deposited and balance amount of Rs.32,848 is due."

14. The CIT (Appeals) on 31‑1‑1996 set aside the orders passed under section 52 holding:

"The assessment record/order have been perused. The order under sections 52/156 is set aside, the appellant's contention being verifiable from returns and documents produced in support, therefore, appellant's explanation sounds plausible. Order under appeal must be rectified accordingly. The appeal succeeds to the extent in the manner indicated above."

15. The CIT (Appeals), Zulfiqar Ali Khan is no more alive. The order passed by him was correct about rectifying the error as reproduced from his order in para. 14 (supra). However, he left an ambiguity in his order by setting aside the order instead of giving a finding on the other plea reproduced in para. 13(ii) (supra). An appeal, therefore, was instituted with the Income‑tax Appellate Tribunal.

16. In the evening of Friday, the 26th June, 1999, Mr. Fahim Dad Khan Khattak, the Tax Recovery Officer, Sargodha allegedly raided the house of Mian Muhammad Anwar, partner of the complainant firm. Since the factory remained closed on Fridays, even the cheque book of Ittefaq Cotton Ginning Factory was not available. The Tax Recovery Officer with the help of armed officials forced him to issue the cheque of a sister firm for a sum of Rs.298,588 on gun point, to recover an amount that had already been withheld from the bills of complainant by Messrs Khurshid Spinning Mills and had not been deposited into treasury as required under rules 49 and 50 of the Income Tax Rules, 1982.

17. The complainant filed a revision petition before Commissioner of Income Tax, Sargodha Zone, Sargodha on 13‑7‑2000. The petition remained pending upto 20‑10‑2001 and ultimately it was dismissed by the CIT, Sargodha Zone, Mr. Abdul Aziz Memon on point of limitation. Notice, under section 10(5.) of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000 was issued to Mr. Abdul Aziz Memon, CIT, Sargodha to explain why he could not see the gross injustice done to the assessee that warranted suo motu action by him to allow due relief. However, notice could not be served upon him because he was on ex‑Pakistan leave.

18. The petitioner filed complaint with this forum, which was registered as Complaint No.250 of 2002 on 22‑3‑2002.

19. The RCIT submitted, in his written reply to notice under section 10(4) of the Ordinance No.35 of 2000 that in view of .the above mentioned facts/provisions of law no maladministration is involved in the case.

20. First hearing of the complaint was held on 24‑4‑2002 when counsel of the complainant; Mr. Sagheer Tirmizey and representative of Department, Mr. Manzoor Ahmad, DCIT, Circle 2, Sargodha were heard. It was felt that the gravity of maladministration was required to be conveyed effectively to all the concerned officers as well as the concerned withholding agents. The hearing, therefore, was adjourned. Notices for hearing on 9‑5‑2002 were issued to:‑

(i) Mr. S.M. Athar, RCIT, Central Zone. Multan.

(ii) Mr. Abdul Aziz Memon, CIT, Sargodha.

(iii) Mr. Safdar Hussain, Special Officer of Income Tax, Circle‑19, Toba Tek Singh.

(iv) Syed Shujjat Hussain, Special Officer, Special Officer of Income‑tax, Circle‑13, Jhang.

(v) CIT, Special Zone, Lahore.

(vi) Principal Officer, Messrs Khurshid Spinning Ltd. Faisalabad.

21. The charge of Mr. Abdul Aziz Memon, CIT, Sargodha Zone was held by Mr. Muhammad Ashraf, CIT in addition to his own charge of Faisalabad Zone and he was present alongwith Mr. Mohammad Akram, IAC, Jhang in whose Range the concerned circle falls.

22. The CIT, Special Zone; Lahore was represented by Mian k1unawr Ghafoor, IAC. He submitted a copy of decision of Income Tax Appellate Tribunal, sitting singly, in I.T.A. No.2274/LB of 1996 (assessment year 1993‑94), dated 16‑9‑2000 filed by the Department in the case of KSM. The relevant facts presented before the Tribunal as well as the finding were:

"the DR said that the assessee deducted tax and kept it with him for a pretty long time, hence default stood established. The action of the CIT of setting aside was, therefore, unnecessary. On the other hand, the A.R. says that the amount stood paid by the suppliers themselves, hence the question of default on the part of the assessee does not arise. I am not convinced from this arguments of learned A.R. This amount has been paid in 1998 while the requirement of deducting and paying in Government Treasury is for the year ended 30‑6‑1993. Moreover, this is a case of set aside and in my opinion the Assessing Officer shall be in a better position to determine the circumstances in which the assessee defaulted and to consider whether he actually was, an assessee‑in‑default or not. The order of the CIT is not disturbed and the appeal dismissed. "

23. The decision of Tribunal was received in the Zone on 27-9‑2000 but remand proceedings were not initiated till the service of notice from this office. The limitation to pass the order would expire on 30‑6‑2002.

24. Statement of Mr. Ijaz Ahmed Faizi the General Manager Finance of KSM was recorded on oath. He deposed that tax amounting to Rs.298,588 had been withheld under section 50(4) on payments made to the complainant against their bills for supply of cotton but it was never deposited. He further deposed that all payments against the bills for cotton supplied in the succeeding periods had been made and no amount against any disputed bills was ever withheld by KSM: He deposed that he neither had knowledge of any dispute with the complainant on any bill nor there was any such correspondence on record nor any suit was ever filed on account of any, disputed bill against the complainant. He undertook to deposit the amount of tax withheld on behalf of the State into the exchequer without further delay.

25. It transpired that the then Tax Recovery Officer, Mr. Fahimdad Khan Khattack who collected the unwarranted demand of tax from the complainant in the manner discussed in Para. 16 (supra) was presently posted as Deputy Director (Expert, Income Tax) National Accountability Bureau, Peshawar.

26. The explanations offered by the two concerned Special Officers for their conduct and the submissions made by the concerned senior officer reflected lack of proper appreciation or the relevant provisions of law and the statutory obligations of the tax payers, withholding agents and the tax official.

27. It is extremely distressing that despite detailed findings and recommendations in several complaints, the senior officers in the Revenue Division as well as at Regional and Zonal Levels have not been able to ensure that all assessees under statutory obligation to act as tax withholding agents to deduct, collect and deposit the taxes so deducted and collected into the exchequer in accordance with law on time that, they do issue prescribed certificate to the assessees whom such taxes are' deducted or collected from; and that they to file duly filled in monthly', statements required under the rules prescribed under the law. They do, not realize that it is their obligation to ensure that taxes paid by the assessees in various manners stipulated under the law are properly accounted for and posted in the cash books of the circles where they are assessed and copies of challans are placed in the miscellaneous cover of their respective assessment records for the relevant year. The entire department suffers from the misconception that it is onus of the assessee, to produce evidence of payment of tax for which credit has been claimed in the return of income. The responsibility, therefore, falls upon the officers in the Central Board of Revenue to dispel this totally unfounded', belief of their subordinates effectively. They must realize that it is the most common irritant for taxpayers. No effort seems to have been made to take the remedial measures for lapses in the computerized tax accounting system recommended in the report laid before the President of Pakistan in January, 2002. The apathy is highly detestable.

28. The multidimensional maladministration identified in consequence of investigations in the instant complaint warrants a very serious consideration by the Secretary, Revenue Division himself. Here is a withholding agent who had the audacity to tell the department that the tax withheld on behalf of State from the supplies had been adjusted against the short suppliers by the vendor.

29. The concerned officers instead of taking all possible legal actions against the withholding agent for admitted embezzlement of State funds kept on harassing the assessee who had already discharged its liability. Had the two special officers who dealt with complainants statement under section 143‑B and the application under section 156 of the Income Tax Ordinance, adopted the proper course of attempting to verify the claim on account of taxes withheld from the circles where the withholding agents were being assessed, the infringement of law and embezzlements of State revenue committed by them would have been p exposed in 1994.

30. The order passed under section 52 by the DCIT, Companies Circle‑6, Faisalabad holding them to be the assessee in default too was not effectively pursued; the appellate forums too, did not give a clear verdict though the issue neither had any accounting riddle nor any legal ambiguity:

31. It is indeed a matter of serious concern that the answer of the withholding agent before the Income‑tax appellate Tribunal on 16‑2‑2000 that they were no more in default because the amount of tax had already been recovered from the supplier was taken too lightly by the DCIT after the issue was remanded for fresh decision.

32. The reason why the Federal tax administration remains very busy doing little is obvious they neither demonstrate effectively nor prove convincingly that they take their job seriously. They neither make example of black-sheep among the taxpayers even where they have the audacity to proclaim defiance nor of such tax functionaries among their fold even when they expose their negligence, inattention, delay, incompetence, inefficiency, inaptitude and arbitrariness in the discharge of their duties and responsibilities.

33. Since there is no visible attempt on their part as a class to distinct themselves from such rogue elements in society, the common perception that they are in league with them is gaining ground. It is being reinforced by the enthusiasm of the senior officers to defend and support their delinquent subordinates in their written replies to the complaints filed in this office. It is time for the conscientious among them to stand high and firm over and above such functionaries and be identified as a distinct class.

34. It is now recommended that the Secretary, Revenue Division

(i) esures:

(a) that the issue remanded by the Income Tax Appellate Tribunal vide order, dated 16‑9‑2000 in I.T.A. No.2274/KB of 1996 is decided by July 15, 2002;

(b) the State revenue amounting to Rs.298,588 deducted from the bills of complainant during the period referred to in the instant complaint alongwith other such withholdings of State revenue identified in the order under section 52 passed in the case of Khurshid Spinning Mills Ltd., Faisalabad and embezzled by them are recovered alongwith the additional tax charged under section 86 of the Income Tax Ordinance; and

(c) that notices are issued under section 116 for default under section 108 for non‑filing of statements prescribed under the Rules framed in pursuance of section 51 of the Ordinance and impose penalties chargeable under the law.

(ii) direct the CIT concerned to refer the matter of default committed by Khurshid Spinning Mills Ltd., Faisalabad to the Legal Advisors for prosecution proceedings to be filed against them;

(iii) direct the RCIT, Central Region, Multan:

(a) to ensure that the amount of Rs.298,598 unduly collected from the complainant on June 27, 1999 is refunded by June 2, 2002 alongwith compensation equal to the amount of additional tax calculated under section 86 of the corresponding period and recoverable from Khurshid Spinning Mills Ltd., Faisalabad; and

(b) to direct the Competent Authority in the Zone where Mr. Safdar Hussian and Mr. Syed Shujjat Hussain, Special Officer are posted to initiate proceedings against them under Government Servants (Efficiency & Discipline) Rules, 1973 on account of their incompetence and inaptitude in discharge of their duties. It is evident firstly by the manner in which they processed on 20‑3 1996 the statement filed by the complainant under section 143‑B as well as its application under section 156 on 3‑5‑1997 and secondly, by the explanation of their conduct offered by them personally during the course of hearing of the instant complaint on 9‑5‑2002;

(iv) direct Mr. S.M. Athar, RCIT, Central Region, Multan particularly and all others senior officers subscribing their signatures to the written replies filed in response to notices issued under subsection (4) of section 10 of the Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000 generally to ensure that the allegations in the complaint have been examined both factually and legally by the supervising and controlling officers of the functionary alleged to have caused the grievance. Either the explanation offered by the concerned officer personally or the factual position as evident from the record should be forwarded without making any attempt to defend the action of a subordinate (unless the action is taken on the orders of such senior officer himself) should be made because while doing so they render themselves responsible for the alleged maladministration that, in consequence of investigation, may turn out to be valid.

(v) direct the RCIT, Central Region, Multan to ensure that an enquiry is instituted:

(a) to identity the DCIT who issued certificate to the Tax Recovery Officer (TRO) specifying the amount of tax due from the complainant;

(b) to offer the identified officer an opportunity to explain his conduct under the circumstances:

(c) to offer an opportunity to the TRO, Mr. Fahim Dad Khan Khattak to answer the allegations of highhandedness in performing his duties of recovering the amount certified by the DCIT;

(d) to ensure that the Enquiry Officer submits his report by July 311, 2002 and

(e) to ensure that the complainant authority takes the decision under the Rules by August 30, 2002.

(vi) direct the Member, Income Tax, C. B. R.;

(a) to ensure implementation by PRAL of the recommendation made in the Special Report on Accounting System of Income Tax Collection;

(b) to give wide publicity to the provisions of law as well as the procedure prescribed under the rules regarding the duties and obligations of assessees in their capacity as the statutory tax withholding agents of the State;

(c) to create awareness of their privileges among those from whose proceeds the taxes are deducted or on whose transactions taxes are collected at source by various withholding agents under the provisions of section 50 of the Income Tax Ordinance, 1979;

(d) to issue directions to the Inspecting Officers to conduct thorough inspection of one circle each month‑ covering all aspects of performance including monitoring of taxes to be withheld by concerned assessees in that circle and the obligations to be fulfilled by them and to submit report by the 7th day of the following month to the CIT of the Zone with a copy to the Director. Inspection & Audit; and

(vii) to ensure that entries of all taxes paid by or deducted or collected from each assessee are duly reported to the circle or any other authority holding jurisdiction over the assessment records of such assessee and he is allowed due credit at the time of assessment.

35. Report on compliance of recommendations made in para. 34(i), (ii), (iii) and (vi) is to be submitted within 45 days of this order.

36. Report on compliance of recommendations made in Paras. (v) and (vi) is required to be submitted by 15‑9‑2002.

C.M.A./510/FTO Order accordingly.