ARIF IQBAL VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2012 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1193 (2012)

Income Tax Ordinance (XLIX of 2001)-

--Ss.122 & 129(5)(7)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.2(3), 9 & 11---Amendment of assessment---Maladministration---Comp-lainant/assessee's deemed assessment for relevant tax year having been amended, he filed appeal before C.I. R. (Appeals), contesting the turnover adopted in the amended assessment on the information obtained from the complainant's sales tax record---Complainant had further contended that his request to the C.I.R. (Appeals) for a stay order against the demand raised through amended assessment was unjustifiably refused---Appeal having been finalized with considerable delay, complainant had filed complaint against such maladministration---Contention of the complainant regarding improper assessment of turnover in the amended assessment, was not borne out---As far as the time actually taken to decide the appeal, contention of C.I.R. (Appeals) did not appear plausible---Delay in deciding the complainant's appeal, was tantamount to maladministration under S.2(3) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000--Recommendations were made to Federal Board of Revenue, to issue instructions to Commissioner (Appeals) to decide appeals in accordance with law contained in S.129(4) of Income Tax Ordinance, 2000 and to report compliance within 30 days.

2008 PTD 609 rel.

Muhammad Munir Qureshi, Advisor Dealing Officer.

Riaz ahmad Raja, ITP AuthorizedRepresentative.

Riaz Ahmad, CIR (Appeals) Departmental Representative.

FINDINGS/RECOMMENDATIONS

DR. MUHAMMAD SHOAIB SUDDLE (FEDERAL TAX OMBUDSMAN).---This complaint is against illegal amendment of deemed assessment and delayed adjudication in appeal.

2. The complainant^'s deemed assessment for Tax Year 2009 was amended under section 122(1) of the Income Tax Ordinance, 2001 (the Ordinance) vide order dated 20-6-2011. The complainant preferred appeal before the CIR (Appeals) on 9-7-2011, contesting the turnover adopted in the amended assessment on the basis of information obtained from the complainant^'s sales tax records. He contended that the information obtained pertained to Chicago Metal Works (Pvt.) Ltd. that was engaged in manufacture and sale of tractor parts whereas he was an AOP with the same name (Chicago Metal Works) but dealing in blended lubricating oil.

3. The complainant further contends that his request to the CIR (Appeals) for a stay order against the demand raised through amended assessment under section 122(1) of the Ordinance was unjustifiably refused. He served a notice under section 129(7) of the Ordinance on the CIR (Appeals) on 29-11-2011. Also, the CIR (Appeals) decided the complainant^'s appeal on20-9-2011 but the appellate order was received by him on 11-1-2012 through the courier service. According to the complainant between the date of filing the appeal before the CIR (Appeals), 9-7-2011, and the date on which the appellate order was received by him, a total of 186 days had expired. This was far in excess of the 120 days allowed for finalization of an appeal under the statute. According to the complainant, since he had served a notice under section 129(7) of the Ordinance on the CIR (Appeals) personally on 29-11-2011, the appeal would be deemed to have been accepted by operation of law as provided for under section 129(5) of the Ordinance.

4. When confronted, the Commissioner (Appeals) filed a reply contending that the complainant was wrong in his view that the turnover assessed under section 122(1) of the Ordinance was with reference to the other Chicago Metal Works (Pvt.) Ltd. He said that this contention was an afterthought and had not been brought forward at the assessment stage. As for the alleged belated finalization of the complainant's appeal,' he denied that any notice under section 129(7) of the Ordinance was ever served on him personally, as required under the law. He also denied that the appeal was decided by him on 10-1-2012 and not on 20-9-2011 as per date cited on the appellate order.

5. After hearing both sides and examining the available record, the complainant's contention regarding improper assessment of turnover in the amended assessment with reference to Chicago Metal Works (Pvt.) Ltd., an unrelated entity with a different line of business, not borne out complainant^'s other contention that Notice under section 129(7) of the Ordinance was properly served on the CIR (Appeals) is also found not served personally on the CIR (Appeals) but on some member of his staff. Section 129(5) of the Ordinance therefore does not come into play.

6. As for the time actually taken to decide the appeal, the contention of CIR (Appeals) does not appear plausible. As per courier service receipt produced by the complainant, the appellate order was received by the courier on 10-1-2012, i.e.186 days after the appeal was filed as against 120 days allowed under the statute. The Hon'ble Federal Tax Ombudsman in a case reported as 2008 PTD 609 has held that:--

"An order passed on the file but not communicated to the affected party within the prescribed time limits or within the extended period of time cannot be treated as having been passed within the prescribed time limits."

Findings:

7. The delay in deciding the complainant's appeal is tantamount to maladministration under Section 2(3) of the FTO the Ordinance.

Recommendations:

8. F.I.R. to

issue instructions to Commissioner (Appeals) to decide appeals in accordance with the law contained in section 129(4) ofthe Ordinance; and

(ii) report compliance with 30 days.

H.B.T./87/FTOOrder accordingly.