(a) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss. 92 & 156‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)‑‑‑Refund‑‑‑Wilful error in determination of ‑‑‑Maladministration‑‑‑ Rectification‑‑‑Wilful/deliberate error in determination of refund amounted to maladministration and it had to be corrected through rectifying order under S.156 of the Income Tax Ordinance, 1979.

(b) Income Tax Ordinance (XXXI of 1979)‑‑‑

‑‑‑‑Ss. 96 & 156‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)‑‑‑Refund‑‑‑Rectification‑‑‑Dishonour of refund voucher‑‑‑Department was obliged to get completed the assignments for issuance of refund voucher during the office hours‑‑ Federal Tax Ombudsman recommended that the Commissioner of Income Tax should see that commitments made by the representative of the Revenue were carried out as promised and that signatures of the officer issuing the refund, or any other necessary intimation required by the procedure is sent to the State Bank of Pakistan to avoid possibility of dishonour of the Refund Voucher.

Muhammad Aslam, A.R. for the Complainant.

Ms. Nabeela Iqbal, DCIT for Respondent.

DECISION/FINDINGS

The Complainant, and individual, runs a laundry shop. He alleges that his refunds for the assessment years 1998‑99 and 1999‑2000 have, not been issued and for the year 2000‑2001 the refund has not even been worked out despite assessment having been made. It is finally prayed: "my refund be issued after rectification".

2. The respondent has submitted vide comments, dated 24‑5‑2002 that refund for the assessment years 1998‑1999 and 1999‑2000 was created when rectification was made on 31‑1‑2002 after verifying deduction from electricity charges under section 50(7E) of the Income Tax Ordinance, 1979. This has since been issued aggregating Rs.12,150. As respects assessment year 2000‑2001, it is submitted that assessment made under section 59(1) resulted in "no demand" and no rectification application by the complainant is available on record.

3. The AR of the complainant, Mr. Mohammad Aslam (ITP), at the very outset presented Refund Voucher No.85, which, as stated in respondent's reply, was issued to the complainant on 22‑5‑2002. With the help of the stamps on the face of the Voucher it was demonstrated that the same was dishonoured by the State Bank four times for the reason: "Drawer's signatures not registered with its". He cited this as an example of repeated 'maladministration' inasmuch as the signatures of the officer who signed the Voucher were deliberately not intimated to the State Bank so as to delay encashment. The AR further submitted that neither rectification has yet been made nor refund issued for the assessment year 2000‑2001.

4. Ms. Nabila Iqbal (D‑CIT) who came to represent the Revenue attempted to explain that the officer was newly posted hence it took some time to intimate his signatures. This has now been done. She expressed the confidence that if the Vouchers were presented again it would be honored and encashed. She, however, could offer no plausible explanation for not carrying out rectification to create a refund for assessment year 2000‑2001.

5. The discussion with the two representatives and the scrutiny of record revealed several lapses which fall in the category of 'maladministration' as defined in section 2(3) of the Establishment of Office of Federal Tax Ombudsman Ordinance. A few examples are:‑‑‑

(i) As per IT‑30 for the assessment year 1998‑99 demand of tax came to Rs.850 and the column for deduction‑at‑source clearly mentioned a sum of Rs.7,150, still the result, after supposed adjustment, was mentioned as NIL. This "wilful error in the determination of refund" had to be corrected through certificatory order under section 156 of the Income Tax Ordinance, 1979.

(ii) Assessment for 1599‑2000 created a demand of Rs.1,350 and the deductions‑at‑source stood at Rs.7,200. Both these figures are posted in the appropriate columns of the IT‑30; still the end result is shown as ND (=No Demand). This "wilful error" necessitated rectification under section 156.

(iii) For the assessment year demand was created at Rs.2,335 which, when posted on the IT‑30 was squared up by showing deduction: at‑source at the matching figure of Rs.2,335. This was done by deliberately ignoring the amount of Rs.8,280, which was clearly shown in the return of income as the total of withholdings. The rectification for this mistake though sought, for the second time, on 4‑6‑2002 remains unattended.

When confronted with the above anomalies, the representative of the Revenue made the commitment to (i) get a fresh Refund Voucher made for the years 1998‑99 and 1999‑2000, (ii) see that rectification order, creating appropriate refund for the assessment year 2000‑2001 is passed, and (iii) ensure that refund voucher for 2000‑2001 is issued. All these assignments she promised to get completed during the course of the office hours today the 4th July, 2002. For these she invited the AR of the complainant to visit her office soon after the hearing.

6. In the light of the foregoing development it is recommended that:‑‑‑

(1) The CIT should see that commitments made by the representative of the Revenue were carried out as promised.

(2) It should further be ensured that signatures of the officer issuing the refund, or any other necessary intimation required by the procedures, is sent to the State Bank to avoid possibility of dishonour of the Refund Voucher, as happened several times in the past.

7. A compliance report be submitted within 15 days of the receipt of this Order.

C.M.A./582/FTOOrder accordingly.