Mian IFTIKHAR AHMAD VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2004 P T D 2017
[Federal Tax Ombudsman]
Before Justice (Retd.) Saleem Akhtar, Federal Tax Ombudsman.
Mian IFTIKHAR AHMAD
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.877‑L of 2003, decided on /01/.
th
September, 2003. (a) Income Tax Ordinance (XXXI of 1979)‑‑‑
‑‑‑‑Second Sched., Cl. 118‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S. 2(3)‑‑‑Exemption‑‑‑Levy of workers welfare fund‑‑‑First Appellate Authority deleted such levy by following the decision of the Supreme Court of Pakistan that units which were exempt from Income tax were exempt from the levy of workers welfare fund‑‑‑Appeal was filed by the Department before the Appellate Tribunal against the order of First Appellate Authority ignoring the decision of Supreme Court‑‑‑Validity‑‑‑Federal Tax Ombudsman recommended that decision by First Appellate Authority, dated 18‑1‑2003 be implemented to give effect to the relief granted therein.
(b) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)‑‑‑--
‑‑‑‑S. 9(2)‑‑‑Jurisdiction, functions and powers of the Federal Tax Ombudsman‑‑‑Objection about complaints being incompetent for admission had time and again been overruled for the reasons that without investigation "maladministration" could not be judged.
(c) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)‑‑‑--
‑‑‑‑S. 9‑‑‑Jurisdiction, functions and powers of the Federal Tax Ombudsman‑‑‑Filing 'of appeal to the Appellate Tribunal by the Department subsequent to filing the complaint before the Federal Tax Ombudsman by the complainant/assessee was not sub judice on the date the complaint was received and Federal Tax Ombudsman thus had jurisdiction to investigate.
(d) Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)‑‑‑--
‑‑‑‑S. 2(3)‑‑‑Maladministration‑‑‑Ignoring the decision of superior Court amounts to an arbitrary conduct entailing maladministration.
Shahid Pervez Jami for the Complainant.
Nawab Khan, DCIT for Respondent.
FINDINGS/DECISION
This complaint agitates against levy of WWF for the assessment year 1997‑98 through an order, dated 5‑4‑2002.
2. The Complainant a private limited company is a manufacturer and vendor of poly propylene bags. Its income is exempt from tax under clause 118D of the Income Tax Ordinance, 1979 (hereinafter called the repealed Ordinance). In the assessment year 1997‑98 income was determined at Rs.4,924,501 on which WWF was levied at Rs.96,530 with which the Complainant is aggrieved.
3. The Respondent have forwarded parawise comments by RCIT, Eastern Region, Lahore which convey that the matter is sub judice before the Supreme Court of Pakistan in C. A. No. 1621‑L of, 2001 and also question the competence of the complaint for admission in view of the bar under section 9(2) of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000 (hereinafter called the FTO Ordinance). "Maladministration" is, however, denied. According to the RCIT, although the CIT(A) has granted relief to the Complainant, the Department has already contested his order before the Appellate Tribunal. It is canvassed that WWF is charged under a separate statute which unequivocally envisages levy on industrial undertakings earning Income above Rs.200,000.
4. The learned counsel for the Complainant submitted that vide No.38 of 2000, dated 28‑3‑2003 the Supreme court of Pakistan has I already approved the verdict that those units which are exempt from Income‑tax are exempt from the levy, of WWF as well. Therefore, the CIT(A) had rightly followed the decision and the Department is generating unnecessary litigation by filing an appeal in the Complainant's case before the Appellate Tribunal and also in contesting the decision of the High Court, which favours the complainant also, before the Supreme Court. This act, the learned counsel characterized as unjust and unreasonable conduct amounting to "maladministration" as defined in clause (3) of section 2 of the FTO Ordinance.
5. Mr. Nawab Khan, (DCIT) appearing for the Revenue repeated the arguments as conveyed through parawise comments by the Respondent. He made reference `to leave to appeal' granted on CP No.1607‑1679 on this very issue and pleaded that on that basis the matter is sub judice and not within the jurisdiction of FTO.
6. The objection about complaints being incompetent for admission has time and again been overruled for the reason that without investigation "maladministration" cannot be judged. It is hard to accept the plea by the Department that the matter is sub judice because the leave to appeal has been granted in respect of a decision in which the complainant is not a party. In the Complainant's case an order was passed by the learned Commissioner on 18‑1‑2003 against which the Department has preferred an appeal to the Appellate Tribunal subsequent to filing the complaint and therefore, on the date the complaint was received the matter was not sub judice‑hence the jurisdiction to investigate. At the same time there is obvious merit in the argument by the learned counsel for the Complainant that ignoring a decision of superior Court amounts to an arbitrary conduct entailing maladministration". It is, therefore, recommended that the decision by the CIT(A), dated 18‑1‑2003 be implemented to give effect to the relief granted therein.
7. Compliance be reported within 30 days of the receipt of this Order.
C.M.A./121/FTOOrder accordingly.