AZIM KHAN MARWAT, SECRETARY GENERAL PAKISTAN LIBRARY ASSOCIATION, ISLAMABAD VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2011 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 2476 (2011)

Income Tax Ordinance (XLIX of 2001)---

----Second Sched., Part-III, CI. (2)---Establishment of the Office of Federal Tax Ombudsman Ordinance, (XXXV of 2000), S.2(3)---National Education Policy 2000---Education letter OM No.F-17(2)R-2006-32 dated 12-2-2009---Sindh Government S.R.O. No.S(HE-II) LIB-49/96 dated 12-9-2009---Accountant General Punjab letter No.DAG/PRs/HM-4046 dated 18-I-2011---Reduction in tax liability---Refusal to grant 75% rebate in tax to the librarians which was admissible to full time teachers and researchers---Validity---Librarians in Provinces of Sindh and Punjab were availing the concession of 75% rebate in their income tax liability on the basis of letters/circulars of Education Departments and the office of Accountant General, Punjab---First Appellate Authority had also accepted the contention of librarians that they were entitled to the claimed rebate of 75% on the basis,of Tribunal's judgment---No evidence had been produced by the Department to show that orders of First Appellate Authority or that of Appellate Tribunal had been got annulled by any superior judicial fora---Declining the request of the complainant by the Federal Board of Revenue for allowing 75% rebate in income tax liability was, prima facie, discriminatory in view of fact that orders passed by First Appellate Authority and Appellate Tribunal still hold the field and the librarians in Punjab and Sind were availing the benefit of 75%. rebate in their income tax liability---Such tantamounted to maladministration--Federal Tax Ombudsman recommended Federal Board of Revenue to address the issue of evident discrimination in allowing 75% rebate to librarians all over Pakistan within 21 days.

Income Tax Appellate Tribunal's Judgment Bearing Nos.420 and 421/LV of 2009 decided on 21-12-2009 rel.

Usman Khalid Mirza, Advisor and Muhammad Ramzan Bhatti Dealing Officers.

Azim Khan Marwat Mrs. Binte Zehra, Secretary, Islamabad Colleges Librarians and Muhammad Zulgarnain Akhtar, Librarian, Iqra University, Islamabad Authorized Representatives.

Aftab Ahmad, Chief ITP Inland Revenue, Tax Policy, F.B.R. Departmental Representative.

FINDINGS/RECOMMENDATIONS

DR. MUHAMMAD SHOAIB SUDDLE (FEDERAL TAX OMBUDSMAN).---This complaint has been filed against the F.B.R's. refusal through letter C.No.4(32)ITP/2001 dated 15-4-2011 to grant 75% rebate in tax to the librarians which, accordingly to the complainant, is admissible to full time teachers and researchers in terms of clause (2) of Part-III of the 2nd Schedule to the Income Tax Ordinance, 2001. The complainant contends that librarians were declared as library teachers/lecturers in National Education Policy, 2000 and granted teaching allowance vide OM No.F-17(2)R-2006-32 dated 12-2-2009. The librarians were also researchers as they were responsible to search the relevant information for the readers. Not only were their research papers routinely published in nationally and internationally reputed journals, in the Province of Sindh, they were availing the benefit of 75% rebate in income tax on the basis of S.R.O. No. S(HE-II)LIB-49/96 dated 12-9-2009 issued by the Government of Sindh clarifying to the Accountant General Sindh that the librarians fell in the category of teachers. Similarly, the Accountant General Punjab had also through letter No.DAG/PRs/HM-4064 dated 18-1-2011 included the college librarians of Punjab Education Department in the table entitling them for 75% tax rebate on the basis of Order-in-Appeals Nos. 3 to 14 dated 16-8-2010 passed by the Commissioner Inland Revenue, Appeals-III, Lahore.

2. The complaint was sent to the Secretary, Revenue Division, Islamabad on 13-5-2011 for comments. The Commissioner Inland Revenue, Zone-I, RTO, Islamabad, on 9-6-2011 submitted a reply through the Second Secretary (TO-I), F.B.R.

3. During the hearing, A.Rs. reiterated the pleadings mentioned in the complaint and produced evidence of research papers written by a number of librarians and published in the reputed journals. It was also asserted that librarians were engaged in teaching at school, college and university level and receiving the special allowance admissible to the teachers. The librarians in the Provinces of Punjab and Sindh were already availing the concession of 75% tax rebate. The F.B.R's order dated 15-4-2011 was, therefore, discriminatory and oppressive calling for the indulgence of the Hon'ble FTO to provide justice to the librarians all over Pakistan and correct the maladministration of the F.B.R. and its functionaries in the field.

4. The DR claimed that the request of the complainant earlier filed with the F.B.R. was examined in detail in consultation with the complainant. He read out the following provisions of clause (2) of Part-III of Second Schedule to the Income Tax Ordinance, 2001 and claimed that 75 % rebate in income tax was admissible only to full time teachers and researchers:--

"The tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government training and research institutions, shall be reduced by an amount equal to 75% of tax payable on his income from salary."

5. The DR admitted that Mr. Azim Khan Marwat, the complainant had served for 21 years as a librarian in different colleges, but currently he was working as Assistant Director in the Directorate of Education, Islamabad, against an administrative post. Similarly, there were many other 'librarians who were neither teaching nor conducting any research work: He maintained that circulars/letters issued by the Accountant General's office or by the Education Departments were not binding on F.B.R., not having been issued in terms of provisions of the Income Tax Ordinance, 2001. He further claimed that the legality and propriety of the Order-in-Appeal passed by the Commissioner Inland Revenue. Appeals-III, Lahore was being scrutinized for the purpose to recall the same. He, however, admitted that the benefit of 75% rebate in income tax presently being allowed to librarians in Sindh and Punjab was discriminatory and detrimental to the financial interests of librarians in other areas of Pakistan including Islamabad Federal Territory. The DR added that 75% rebate in income tax under any illegal and unauthorized directions of the provincial authorities/Accountant General's office could not be made basis for allowing the requested rebate to the complainant and his other colleagues. "The relevant provisions of the Income Tax Ordinance, 2001, were very clearly worded and no other meanings could be given except what was evident from the plain reading of the same."

6. The written arguments and verbal pleadings of parties have been examined carefully. It is an admitted fact that librarians in the Provinces of Sindh and Punjab are availing the concession of 75 % rebate in their income tax liability on the basis of letters/circulars of Education Departments and the office of Accountant General, Punjab. The Commissioner, Appeals-III, Lahore, had also accepted the contention ofthe librarians that they were entitled to the claimed rebate of 75% on thebasis of Income Tax Appellate Tribunal's judgment bearing Nos.420 and421/LV/2009 dated 21-12-2009. No evidence has been produced by theDepartment to show that these orders of Commissioner Appeal or that of ITAT had been got annulled by any superior judicial fora.

Findings:

7. The F.B.R's. letter C.No.4(32)ITP/2001 dated 15-4-2011 declining the. request of the complainant for allowing 75% rebate in income tax liability is, prima facie, discriminatory in view of the fact that orders passed by Commissioner (Appeals) and ITAT still hold the field and the librarians in Punjab and Sindh are availing the benefit of 75% rebate in their income tax liability. This is tantamount to maladministration under section 2(3)(b) of the FTO Ordinance, 2000.

Recommendations:

8. F.B.R. to-

(i)address the issue of evident discrimination in allowing 75% rebate to librarians all over Pakistan within 21 days; and

(ii)report compliance within 07 days thereafter.

C.M.A./203/FTOOrder accordingly.