MISBAH TRADING COMPANY VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1464 (2006)

Income Tax Ordinance (XLIX of 2001)---

----Ss.170 & 171--Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Refund---Non-issuance of refund along with additional payment for delayed refund---Validity---Department assured that rectification would be done and resultant refund would be issued within two weeks without fail---Complainant had shown satisfaction on the assurance of department---On assurance of department and satisfaction of the complainant the case was closed and file was consigned to record by the Federal Tax Ombudsman with the recommendation that refund should be paid within 15 days.

Imtiaz Ali Khan, Advisor (Dealing Officer).

Sh. M. Akram for the Complainant.

M. Ghias-ud-Din (D-C.I.T.) for Respondents.

FINDINGS/DECISION

JUSTICE (RETD.) MUNIR A. SHAIKH, FEDERAL TAX OMBUDSMAN.---The grievance of the complainant is against non-issuance of refund amounting to Rs.16,954 for the assessment year 2002-2003 along with Additional Payment for delayed refund under section 171 of the Income Tax Ordinance, 2001.

2. Brief facts of the case are that the complainant is deriving income from dyeing of thread. He filed income tax return under SAS for the assessment year 2002-2003 declaring net income at Rs.200,000 which was selected for total audit and was assessed at Rs.466,187 under section 62 of the repealed Income Tax Ordinance, 1979. The complainant went into appeal before the C.I.T. (Appeals) Zone -IV, Lahore who reduced complainant's income at Rs.302,731. Accordingly a refund of Rs.16,854 is due to the complainant which has not been issued to the complainant. This comes within the ambit of "maladministration" on the part of respondent and is the cause of this complaint.

3. Respondents have also filed parawise comments as under:

(i) That the complainant is entitled to refund of Rs.16,954 for the assessment year 2002-2003. The case involved rectification under section 221 of the Income Tax Ordinance 2001 for creation of refund of Rs.16,854 after giving credit of tax payment challans of Rs.30,000 deposited on 31-3-2003. As per section 171 of the Income Tax Ordinance 2001 the Commission shall issue the refund voucher within 3 months from the date the refund order is made, otherwise the taxpayer shall be eligible under section 171 for a further amount of compensation @ 6% p.a. Refund order is yet to be passed in this case, therefore, the assessee is not entitled to any additional payment on refund in view of the provisions of section 171(2)(c) of the Income Tax Ordinance, 2001.

(ii) That no act of "maladministration" has been committed in terms of section 2(3) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 because there is no allegation of malice or bias against respondents.

(iii) That the concerned CITs have been requested to pass rectification order under section 221 of the Income Tax Ordinance, 2001 and refund, if any be issued accordingly.

4. Today i.e. 2-1-2006 on the date of hearing, Sh. Muhammad Akram (Advocate), AR appeared for the complainant and Mr. M. Ghias- ud-Din (D-CIT), DR, attended on behalf of the respondents. Both the representatives reiterated the same arguments as have been submitted through complaint and parawise comments. However, DR assured that rectification would be done and resultant refund would be issued within two weeks without fail. AR of the complainant has shown satisfaction on the assurance of the DR.

5. On the assurance of the DR and satisfaction of the AR the case is closed and file is consigned to record with the recommendation that refund of Rs.16,954 should be paid to the complainant within 15 days.

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

C.M.A./21/FTOOrder accordingly.