BILAL QADIR JASKANI VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1444 (2006)

Income Tax Ordinance (XLIX of 2001)---

---Ss. 221 & 122---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Rectification of mistake---Concealment---Complainant/assessee alleged that repeatedly issuance of illegal and unlawful notices by the tax functionaries fell within the definition of maladministration---List of discrepancies found in the tax return was filed by the department---Federal Tax Ombudsman observed that it was not necessary to go into details as the department had not been able to initiate so far any action of concealment against the complainant/assessee---No misstatement by the complainant/assessee as per record was found; it was a case of naked extortion by the Special Officer/Inspector---Repeated (uncalled for) notices had been issued to the complainant/assessee for settling "alleged" discrepancies and it was an act of extortion as per facts obtaining on record---Such delinquent officials should be severely dealt with---Federal Tax Ombudsman recommended that concerned Special Officer/Taxation Officer should not be given assessment work as he had tendency to go beyond his jurisdiction and harass the taxpayers and said officer may be warned to be careful in future and the observation may be placed in his PER (ACR).

Imtiaz Ali Khan, Advisor (Dealing Officer).

Abdul Majeed Malik for the Complainant.

Muhammad Abid (DCIT) for Respondent.

FINDNGS/DECISION

JUSTICE (RETD.) MUNIR A. SHAIKH, FEDERAL TAX A OMBUDSMAN.---The grievance of the complainant is against issuance of repeated illegal and unlawful notices by Mr. Tabassum Tahir, Taxation officer and Mr. Muhammad Bakhsh, Inspector, Income Tax/Wealth Tax, Circle No.38, Dera Ghazi Khan. It has been alleged A that issuance of repeated illegal and unlawful notices by the aforesaid tax functionaries falls within the definition of "maladministration". It has been prayed that serious legal as well as E&D action under the law may be taken against these officials.

2. Brief facts of the case are that the complainant is a senior Executive of National Bank of Pakistan and has paid @ Rs.18,000 P.M. as Income Tax during the tax years 2004 and 2005 and now paying @ Rs.26,000 P.M. w.e.f. 1-7-2005. During the posting of complainant as Regional Business Chief, National Bank of Pakistan, Dera Ghazi Khan (from August, 2002 to July, 2003) Return/Employer Certificates under section 115 of Income Tax Ordinance for the assessment years 2002-2003 and also for the tax year 2003 and 2004 were submitted in Circle No.38, Income Tax Office, Dera Ghazi Khan out of which assessment year 2002-2003 has been finally adjudicated and the refund of Rs.10,744 was created. The refund for tax years 2003 has also been finalized but has been withheld by the above mentioned Special Officer (Mr. Tabassum Tahir). Further, Special Officer (Mr. Tahir Tabassum) had sent 3 (three) show-cause notices to the Complainant vide Nos.307, 308 and 309 on 26-5-2005 for rectification. The complainant alleges that the repeated notices were issued just to defame, blackmail, harass and extract the money from him. It is also alleged that the accused tax functionaries contacted the nephew of the complainant (Mr. Yasir) at D.G. Khan and got an amount of Rs.6',000 as token money of illegal gratification to close the case and for issuance of final refund for the tax years 2003 and 2004. It is further alleged that on account of non-fulfilment of their further illegal demands, they started sending Notices to the complainant. The complainant also moved applications/complaints to the C.I.T., Multan but no action has been taken by them. This amounts to "maladministration" and cause of the instant complaint.

3. Respondents have forwarded parawise comments as under:--

(i) That issuance of notice does not constitute "maladministration" as held by the Hon'ble FTO vide order dated 29-9-2005, in C.No.912 of 2005 (Messrs Sang-e-Meel).

(ii) That the taxpayer is an employee of the NBP --- a salaried person, and filed his return of income for the assessment years 2002-2003, salary certificate for the tax years 2003 and 2004.

(iii) That in response to queries made by the assessing officer, the Regional Officer, D.G. Khan and Area Head Office, Multan informed the assessing officer that in addition to salary certain perquisites/allowances were also received by the complainant. These had not been disclosed in the return of income for this year.

(iv) The Executive had availed a facility of Advance Rent Ceiling from bank for Rs.222,804 for a period of two years i.e. 1-3-2002 onward on a house owned by Miss Zargoona Khawar and Miss Tanzeela Khawar daughter of Rafiq Khawar (Lessor) situated at No.50, Block "Z" Model Town, D.G. Khan. Monthly rent of the House amounted to Rs.25,000 P.M. as per lease agreement with an advance of Rs.600,000.

(v) The Executive also availed loan for Motor Car and Computer for Rs.611,100 and Rs.50,000 dated 19-8-1999 and 5-11-2002 respectively at a concessional mark-up @ 4% while benchmark rate is at least 7.5%. The amount equal to the difference as per these rates was required to be declared and taxed which was not done by the complainant.

(vi) That the Executive received bonus on the eve of Eid ul Fitar at Rs.21,209.

(vii) That during the above mentioned assessment and tax years the complainant also failed to declare perquisites regarding accommodation, conveyance, Guards/driver provided by the Bank. In view of above deficiencies, show cause notices/letters for rectification/amendment in assessment for each year separately were issued which gave rise to this complaint.

(viii) That on the basis of information obtained from the Bank Authorities, the taxpayer/complainant was intimated regarding discrepancies/anomalies observed in the Income Tax Returns/ Salaries Certificates.

(ix) That the allegation regarding issuance of notice under section 221 'is misconceived as the Commissioner had duly delegated the power of rectification under section 221 of the Income Tax Ordinance, 2001 to the Taxation Officers.

4. During the course of proceedings, the DR submitted that an enquiry has been initiated against Mr. Tabassum Tahir, Taxation Officer and Mr. Muhammad Bakhsh, Inspector and requested for adjournments.

5. Today i.e. 31-3-2006, on the date of hearing, Mr. Abdul Majeed Malik (Advocate), AR appeared for the complainant and Mr. Muhammad Abid (DCIT), DR, attended on behalf of the respondents. Both the representatives reiterated their arguments already submitted through complaint and parawise comments.

6. Respondents have given above list of discrepancies found in the Tax Returns of the complainant. It is not necessary to go into details as the respondents have not been able to initiate so far any action of concealment against the complainant. It appears that there has never been any misstatement by the complainant as per record. The alleged allegation regarding bribe of Rs.6,000 paid to official (Mr. Tabasum Tahir, Taxation Officer and Mr. Muhammad Bakhsh, Inspector) by nephew of the 'complainant is also very complicated affairs. The respondents made an enquiry in this respect but could not make out a case against the officials. This whole affairs is so tortuous that benefit of doubt goes in favour of the officials. This aspect does not need further probe.

7. After lengthy proceedings, DR could only submits a copy of Letter No. PF-32/ADMN/05-06/7791 dated 30-3-2006 addressed to Mr. Tabbasum Tahir, SOIT, E&IP Unit-31, Layya, which is reproduced for facility of reference:

"Perusal of the complaint tiled against you by the subject mentioned person, affidavits filed by the witness of the complainant and after examination of the reply filed by you along with counter affidavits and after personal hearing with you, this office is of the view that you failed to handle tax payer properly. Therefore, you are hereby directed to be careful in future while dealing with the tax payers".

The above said letter, is indeed insufficient. It is neither a warning nor a reprimand. In such-like cases the officials should not be let off as has been done above. It is a case of naked extortion (by the Special Office + Inspector). Repeated (uncalled for) notices had been issued to the complainant. It is evidently for setting `alleged' discrepancies. It is an act of extortion as per facts obtaining on record. It is not desirable to condone such acts (extortion) by simply issuing the letter cited above. On the contrary such delinquent officials should be severely dealt with. It is, therefore, recommended that:

(i) Mr. Tabassum Tahir, Special Officer/Taxation Officer should not be given assessment work as he has tendency to go beyond his jurisdiction and harass the taxpayers.

(ii) The above-named officer may be warned to be careful in future and the above observations may be placed in his PER (ACR).

8. Compliance report be submitted within 30 days of the receipt of this order.

C.M.A./76/FTOOrder accordingly.