Income Tax Ordinance (XXXI of 1979)-----

----Ss. 96 & 156(2)---Income Tax Rules, 1982, R.5(b)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)- Refund ---Complainant/assessee was an employee---Demand of refund created--Addition under R.5(b) of the Income Tax Rules, 1982 for rent free accommodation---Manipulation of notices---Appeal finally decided in favour of assessee---Refund was issued---Complaint against mis conduct of Assessing Officer and for payment of additional compensation---Validity---Refund admittedly, had been. made to the complainant/assessee---Complainant was entitled to additional compensation for : delayed payment---Complaint was mainly about misconduct of Assessing Officer to whom notice was not issued---Federal Tax Ombudsman refrained from passing any order against such Assessing Officer ---Maladministration had been proved---Federal Tax Ombudsman recommended that additional compensation be paid to the complainant/assessee in respect of Rs.1,375 refunded on 10-8-1999 and Central Board of Revenue to take disciplinary action against the Special Officer on the complaint filed by the complainant.

Complainant in person.

Gul Rehman, Taxation Officer.

DECISION/FINDINGS

The complainant is an employee of Kohinoor Sugar Mills serving as Assistant Manager. He is an income tax assessee and has regularly paid income tax from the year 1984-85 upto date. It has been alleged that for the assessment years 1994-95, 1995-96 assessment was made and a refund of Rs.1375 was created. The complainant made an application for refund on 23-9-1996 addressed to the Income Tax Officer Jauharabad but it was not paid for more than a year. It has been alleged that one day Mr. Akbar Ali Shad, Special Officer expressed annoyance on complainant's reminders and visits for obtaining the refund amount. With mala fide intention in the declared income for She assessment year 1996-97 applying rule 5 of the Income Tax Rules., 1982 he added 15 %. amounting to Rs.17776 and required Rs.7955 further to be deposited towards tax in spite of fact that Rs.8701 had been deposited towards the income tax of the said assessment year. It has been pleaded that when he approached the Special Officer personally, pointed out that rule 5 was not applicable and relief may be granted he stated that what favours Kohinoor Sugar Mills has conferred on them. He further said that cement and textile mills send gifts to him and to his staff on occasion and look after them but Kohinoor Sugar Mills owners have not given anything and therefore his staff members always press that they should be set right. The complainant stated that he was only a petty officer on salary and the Special Officer may talk to the Kohinoor Sugar Mills owners. The complainant pleaded that he was demanding what was provided under law. Thereupon the said Special Officer stated that the manner in which you will treat you should expect the same favours. He further stated that the complainant should pay further tax or go in appeal. The complainant consulted an advocate and filed rectification application before the Special Officer, which was rejected by him on 6-11-1997. The complainant filed appeal against the said order on 18-12-1997 before the Appellate Additional Commissioner of Income Tax, Sargodha which was allowed by order dated 22-2-1999. During this time Mr. Akbar Ali Shad, Taxation Officer was transferred from Jauharabad and thereafter refund was paid to him on 10-8-1999 but the mark-up and the additional compensation was not paid. The Department filed an appeal against the order of AAC before the Tribunal; which was dismissed on 29-6-2002. The complainant has stated that he has been harassed with mala tide and ulterior motives and unnecessarily dragged in litigation, which has caused him anxiety harassment and expenses. He has prayed that for this maladministration and misbehaviour action should be taken against Mr. Akbar Ali Shad.

2. Notice was issued to the C.B.R. which have admitted all the facts relating to the proceedings and have further stated that it is correct that refund for the years 1995-96; 1996-97 and 1998-99 was issued to the assessee on 10-8-1999. It has been pleaded that, as the grievance of the complainant regarding issuance of refund stands redressed the of, the allegations of the complaint are of general nature and do not appear to be, relevant.

3. During hearing Mr. Gul Rehman, Taxation Officer appeared and produced the entire records. In fact almost all the facts relating to the proceedings are admitted and there is no controversy about them. On examination of the file it was noticed that a notice dated 20-2-1997 under section 156(2) was allegedly issued to the complainant alleging that the complainant has been provided rent free accommodation therefore 15% of the salary is to be added under rule 5(b) of the Income Tax Rules, 1982 in respect of assessment year 1995-96. He was required to file objections within 3 days. On this notice is a signature showing its receipt on 22-2-1997. The complainant states that this is not his signature and that this notice was never received by him. An examination of this notice shows that at was issued by Mr. Akbar Ali Shad, Special Officer but there is no record of its service nor there is any report of the notice server. Mr. Gul Rehman frankly stated that record does not show how the notice was served. In the record an order under section 156 was noticed which is not dated nor signed by the Special Officer. It seems the notice was manipulated by the Special Officer and the order was prepared by Mr. Akbar Ali Shad in which addition of 15 % of the pay under rule 5(b) of the income tax was added. In this order it has been stated that notice was issued and served upon the assessee, which remained un complied. It seems that this proceeding was taken by Mr. Akbar Ali Shad but the order was not signed and remained lying in the file. These facts point out to irregularities, illegalities and abuse of authority:

4. It is an admitted fact that refund has been made to the complainant on 10-8-1999. Refund for the assessment year 1995-96 amounting to Rs.1375 had become due on 23-9-1996. The claimant is entitled to additional compensation for the delayed payment in respect or Rs.1375. However, as the complaint is mainly about misconduct of Mr. Akbar Ali Shad, Taxation Officer to whom notice was not issued I would refrain from passing any order against him. As maladministration has been proved it is recommended as follow:--

(i)Additional compensation be paid to the complainant in respect of Rs.1375 refunded on 10-8-1999.

(ii)C.B.R. to take disciplinary action against Mr. Akbar Ali Shad Special Officer on the complaint filed by the complainant.

(iii)Compliance of recommendation No.(i). be reported within 30 days and recommendation No.(ii) within 60 days.

C.M.A./893/FTOOrder accordingly.