AAMIR HASSAN, INCOME TAX PRACTITIONER, BAHAWALPUR VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2007 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 951 (2004)

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

----Ss.9(2), 9(1) & 9(4)---Federal Tax Ombudsman Investigation and Disposal of Complaint Regulation, 2001, R.5(2)---Malpractices---Tax functionaries---Jurisdiction---Aggrieved person---Functions and Powers of the Federal Tax Ombudsman---Maladministration---Complainant had reported malpractices committed by the "tax functionaries" in some Circles of a Zone---Validity---Complaint was held to be competent for admission as Federal Tax Ombudsman could investigate allegations of maladministration "on his own motion"---Allegations of maladministra tion may come to the notice of Federal Tax Ombudsman, from any source---Some of the allegations were found true---Federal Tax Ombudsman, as a preliminary step, recommended that Central Board of Revenue to constitute a Committee of one Officer from Central Board of Revenue, Commissioner of the Region, Inspecting Assistant Commissioner of the Zone and Inspecting Assistant Commissioner of Headquarter to probe in the allegations and to submit report for further investigation.

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

----Ss.9(4), 9(1) & 2(3)---Causes of corruption---Aggrieved person--Maladministration-Complaint by any "aggrieved person" did not mean only the person adversely affected---Scope was wide enough to include any citizen of Pakistan who feels distressed by an act of omission or commission of a tax functionary---Complaint of maladministration could be moved under section 2 clause (3) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000, which was enacted to ascertain causes of corruption and to recommend steps for its eradication.

Complainant himself present.

Zulqurnain Tirmizi, IAC for Respondent.

FINDINGS/DECISION

This complaint reports malpractices allegedly being committed by the "tax functionaries" posted in Circles 19, 26 and 27 of Zone-24, Bahawalpur by way of:-

(i) Changing entries in the DCR by cutting or using remover or white correcting fluid.

(ii) Keeping DCR open with corrupt or improper motives.

(iii) Issue Demand Notices without passing assessment orders in writing.

(iv) Initiating recovery proceedings in irregular manners helping in tax avoidance and evasion by suggesting sophisticated and systematic procedures.

2. The Respondents have forwarded para-wise comments by RCIT, Central Region, Multan which questioned the competence of the complaint for admission by referring to section 9(2) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 (hereinafter called the FTO Ordinance) and rule 5(2) of the FTO Investigation and Disposal of Complaints Regulation, 2001 (hereinafter called the FTO Regulations). The RCIT admits `occasional cuttings' but defends these as bona fide. The allegation about keeping of DCR open for corrupt and improper motives has been denied. Service of assessment order is said to be in the regular course of events. The insinuation about assessment orders not being passed in writing has been characterized as totally vague and unspecific. The RCIT has called the assertion concerning sophisticated and systematic procedure in helping evasion and avoidance of tax, as figment of imagination of the Complainant.

3. The Complainant, who appeared personally, is a practising ITP at Bahawalpur. He insisted that the allegations were based on close observation of the working in the Circles and the complaint has been moved with a sincere desire to eliminate corruption so as to benefit the Government Treasury. In order to rebut RCIT's para-wise comments, the Complainant brought on record a Rejoinder contending that para-wise comments betray an effort to shelter the `tax functionaries' and prayed for an independent investigation disregarding the biased comments submitted by the RCIT.

4. Mr. Zulqurnain Tirmizi (IAC) appearing for the Revenue submitted that the FTO is not an appellate forum to redress the grievances as made out in the complaint. According to him, the complaint is of general nature relating to discipline and conduct of officials for which the proper forum are the IAC or the CIT or other high-ups in the hierarchy of the C.B.R. Referring to subsection (1) of section 9 of the FTO Ordinance, the DR pleaded that Complainant is not an "aggrieved person" as he is not affected by any action or decision in tax proceedings by the Department against his person. The DR dilated on the jurisdiction, functions and powers of the FTO which, as per section 9(1), were to commence:

(a) on a complaint by any aggrieved person, or

(b) on a reference by the President, Senate, National Assembly, or

(c) on motion of Supreme Court or High Court, or

(d) on FTO's own motion;

but there is no scope of taking cognizance of complaints from a stranger to the proceedings. Therefore, the complaint, according to the DR, merits outright rejection.

5. Having considered the arguments from both the sides, the complaint is held to be competent for admission because section 9(1) of the FTO Ordinance, authorizes the FTO inter alia to investigate allegations of maladministration "on his own motion" as well. Therefore, any instance of `maladministration' which comes to the notice of FTO from whatever source or from whomsoever can be admitted for investigation by suo motu action. Moreover, reference in section 9 to a complaint by any "aggrieved person" does not mean that the Complainant should necessarily be the one adversely affected by an order against his person only. The scope is wide enough to include any citizen of Pakistan who feels distressed by an act of omission or commission by a `tax functionary' of a character defined as "maladministration" in Clause (3) of section 2 of the FTO Ordinance would surely be entitled to move a complaint and the same can be entertained for investigation under subsection (1) of section 9 by suo moto action and or by resort to subsection (4) of section 9 or otherwise. It is not be lost sight of that the FTO Ordinance is a beneficial legislation warranting liberal interpretation. It was enacted "in particular for ascertaining the causes of corrupt practices and injustice" with a view "to diagnose, investigate, redress and rectify" the same. To fulfil this objective all information, complaints, suggestions are to be welcomed from all quarters so as to recommend appropriate steps for eradication of these endemic evils, to snake the tax machinery efficient just and trustworthy for promoting a healthy tax culture in the Society.

6. Coining to the facts of present complaint, it emerges that the allegation is true at least in respect of (i) excessive cutting in the DCR (ii) non-passing of orders in writing, so much so that these have been admitted, by the RCIT though attributed to bona fide reasons: Such instances appear to be fairly widespread and have come to the notice in other cases also such as C. No. 11-L/2003, dated 16-8-2003 in re: Dr. Muhammad Nauman Ahmad, therefore, as a preliminary step it is Recommended that:

(i) C.B.R. to constitute a Committee comprising of-

an officer of the C.B.R.,

a Commissioner of a Region (other than Central) and IAC of Zone (other than Bahawalpur) assisted by the IAC (Hq) of Central Region,

to probe the allegations in respect of Circles 19, 26 and 27 of Zone-24, Bahawalpur.

(ii) The Committee so constituted to submit a report for presentation to FTO for further investigation.

(iii) Compliance report be submitted within 45 days of receipt of this order by the Revenue Division.

M.I./307/FTOOrder accordingly.