Haji MUHAMMAD AMIN VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2009 P T D 1218
[Federal Tax Ombudsman]
Before Justice (Retd.) Saleem Akhtar, Federal Tax Ombudsman
Haji MUHAMMAD AMIN
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.280 of 2003, decided on 24/02/2004.
Income Tax Ordinance (XXXI of 1979)---
----Ss.55 & 156---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.9(2)(b) & 2(3)(i)(a)---Consolidated ex parte Assessment---Rectification---Jurisdiction---Maladministration---Visual inspection---Commissioner (Appeals) had passed an arbitrary order resulting in injustice---Maladministration in adopting a process to reach the decision had been identified---Jurisdiction to investigate---Complainant's appeal was dismissed in a summary manner without taking into consideration the facts of the case and the grounds of appeal---Inspection note of the Assessing Officer was not produced to show the nature of machinery---Visual inspection was not relevant and sufficient to support the assessment---Legal question was not adverted to---Federal Tax Ombudsman directed the complainant to file an application to Commissioner of (Appeals) for rectification of the Appellate Order and Commissioner (Appeals) shall decide same by a speaking order.
Muhammad Anwar, Consultant (Dealing Officer).
Aurangzeb, ITP for the Complainant.
Raza Munawar, IAC, Jhelum and Muhammad Aslam, Taxation Officer, Talagang.
FINDINGS/DECISION
JUSITCE (RETD.) SALEEM AKHTAR, FEDERAL TAX OMBUDSMAN.---This complaint has been filed contesting the consolidated ex parte assessment order for the assessment years 1998-1999, 1999-2000 and 2000-2001 and the appellate order of the C.I.T.(A) for the said years as arbitrary, illegal and against the facts of the case.
2. Brief facts of the case are that the complainant derives income from sale of roof slabs. It is stated that the business was started in February, 2002 whereas he has been illegally assessed for the years1998-1999 to 2000-2001 when the business did not exist. The estimation of sales at Rs.20,00,000, Rs.25,00,000 and Rs.30,00,000 for the respective years was illegal, unwarranted and without any basis. The statement of the Taxation Officer that he personally visited the business site of the complainant is alleged to be incorrect and based on mala fide intention as there was neither any modern machinery available in this line of business nor any such machinery was being used by the complainant as alleged by the officer. It is further stated that the complainant had fully explained the facts of the case before the Taxation Officer at the time of hearing which were not considered and the complainant was arbitrarily assessed at an income of Rs.350,000, Rs.450,000 and Rs.550,000 and the assessment order was confirmed by the C.I.T. (A) vide his order, dated 13-11-2002 without considering the facts of the case. It is prayed that the assessment order being arbitrary be vacated as no business was done by the complainant during the said years.
3. In his reply the respondent has stated that since the appeal of the complainant has already been rejected the case fell outside the jurisdiction of the F.T.O. It is further stated that the assessment was made in accordance with law and the Assessing Officer was justified in making ex parte assessment as the complainant was afforded sufficient opportunity but he did not attended the proceedings. It is further stated that the complainant did not explain his position regarding commencement of business and there was no evidence on record to justify his claim. The complainant was duly confronted through a notice under section 62 about the quantum of sales which were estimated after an enquiry conducted by the officer himself. The contention of the complainant that visit of the officer was mala fide was not correct as it was intended to ascertain the magnitude of his business.
4. Representatives of the both sides attended and reiterated their contentions which were considered and relevant record was examined. The complainant's AR produced electricity hills showing that the complainant had obtained commercial connection for business purpose in February, 2002 which supported his contention that no business was done in the years under consideration. He also argued that the Assessing Officer who allegedly visited the business site did not record any facts about the nature and quantum of business but had simply stated in the assessment order that at the time of his visit plant was being operated on modern lines having huge capacity of manufacturing. The respondent's representative on the other hand reiterated that since the complainant had not furnished any information about his business activities and had even not filed the returns, the ex parte assessment on estimate basis was justified which was also confirmed by the C.I.T. (A). The complainant's AR further argued that the C.I.T. (A) had dismissed the appeal without giving due consideration to the grounds of appeal in which the complainant had taken a legal ground on which the C.I.T. (A) had given no decision.
5. The contentions and arguments of the both sides have been considered. As regards jurisdiction it may be pointed out that as discussed below the Commissioner (Appeals) passed an arbitrary order and thus injustice has been caused to the complainant. Since maladministration in adopting a process to reach the decision has been identified there exists jurisdiction to investigate- The main grievance of the complainant is that the C.I.T. (Appeals) has dismissed his appeal in a summary manner without taking into consideration the facts of the case and the grounds of appeal. It has been further pointed out that it was the duty of the appellate authority to consider whether there was sufficient material to justify ex parte assessment. It may be noted that no inspection note of the Assessing Officer was produced to show the nature of machinery. How far visual inspection was relevant and sufficient to support the assessment. The learned Commissioner (Appeals) has not dealt with this aspect nor adverted to the legal question that section 80C was applicable to the complainant. The deficiencies are obvious on record. The proper course for the complainant would be to file an application for rectification of the appellate order.
6. On filing such application by the complainant the Commissioner (Appeals) shall decide it by a speaking order.
Compliance be made within 45 days.
M.I./265/F.T.O.Order accordingly.