MUHAMMAD TAHIR NASIM VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2012 P T D 244
2012 P T D 244
[Federal Tax Ombudsman]
Before Dr. Muhammad Shoaib Suddle, Federal Tax Ombudsman
MUHAMMAD TAHIR NASIM
Vversus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.409/LHR/IT(331)830 of 2011, decided on 05/10/2011.
Income Tax Ordinance (XLIX of 2001)---
----Ss. 170, 171, 153, 239(10) & 1st Sched: Part-III, Div-III, Cl.(1a) & (b)---S.R.O.600(I)/91 dated 2-7-1991---Establishment of the Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9(2)(a)---Refund---Excess deduction of tax at source on cotton lint @ 3.5%---Non-issuance of refund---Validity---Departmental appeal was filed in the Appellate Tribunal on 7-7-2011, the complaint came to the Federal Tax Ombudsman office on 20-7-2011 i.e. two weeks after the matter had become sub judice---Complaint though appeared to be hit by S.9(2)(a) of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000, the facts were so obvious and peculiar that any further delay in issuance of refund as allowed by the First Appellate Authority would be an irrefutable act of maladministration---Overriding purpose of Federal Tax Ombudsman Ordinance, 2000 was to redress and rectify and injustice done to a taxpayer, the apparent jurisdictional bar placed in S.9(2)(a) of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000, being of a technical nature, could not be allowed to defeat the very purpose of the law---Delay also created right to receive compensation under S.171 of the Income Tax Ordinance, 2001---Federal Tax Ombudsman recommended that Federal Board of Revenue to direct the Chief Commissioner to issue refund/compensation due, as per law and without prejudice to the decision of the Appellate Tribunal, within 21 days.
Muhammad Munir Qureshi, Advisor Dealing Officer.
Khwaja Riaz Hussein, Advocate for Authorized Representative.
Muhammad Ali, DCIR for Departmental Representative.
FINDINGS/RECOMMENDATIONS
DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN.---This complaint is against non-issuance of refund.
2.The complainant filed an application for refund of Rs.570,891 pertaining to Tax Year 2008 on 5-8-2010. The refund arose on account of excess deduction of income tax at source on cotton lint @3.5% (which is the general rate of tax deduction specified in Part-III Division-III Clauses (1a) and (1b) of the 1st Schedule to the Income Tax Ordinance, 2001 (the Ordinance), read with section 153 of the Ordinance). For supplies of cotton lint, tax deduction @1% is stipulated in S.R.O. 600(I)/91 dated 2-7-1991, read with Saving Clause 10 of section 239 of the Ordinance.
3.The complainant preferred an appeal to the Commissioner (Appeals) against the rejection of his refund claim by the Deptt. The Commissioner (Appeals) accepted the appeal and vacated the impugned Order vide No.114 dated 31-1-2011. The Deptt. did not file second appeal before the Appellate Tribunal Inland Revenue in time, but did so belatedly on 7-7-2011, after the complainant pressed for implementation of the order passed by the Commissioner (Appeals).
4.When confronted, the Deptt. filed a reply stating that the Commissioner(Appeals)orderhadbeencontestedinappealbeforetheAppellateTribunalasitwasnotinaccordancewithlaw.However,it was not elaborated as to how the order was not in accordance with law. Or why the S.R.O. 600(I)/91 was not applicable in this case.
5.During hearing, the DR reiterated the Departmental contention in the written reply, without explaining how the relief given was not consistent with statutory stipulation.
6.On perusal of record, however, it transpired that whereas the Departmental appeal was filed in the Tribunal on 7-7-2011, the complainant came to the FTO Office on 20-7-2011 i.e. two weeks after the matter had become sub-judice.
Findings:
7.Primafacie,thoughthecomplaintappearstobehitbysection 9(2)(a) of the FTO Ordinance, the facts of this case, as explained in para. 2 above, are so obvious and peculiar that any further delay in issuance of refund as allowed by the Commissioner (Appeals) would seem to be an irrefutable act of maladministration as defined under section 2(3)(ii) of the FTO Ordinance. As the overriding purpose of the FTO Ordinance is to redress and rectify any injustice done to a taxpayers, the apparent jurisdictional bar placed in section 9(2)(a), being of a technical nature, cannot be allowed to defeat the very purpose of the law. The delay also creates the right to receive compensation under section 171 of the Income Tax Ordinance 2001.
Recommendations:
8.F.B.R. to direct the Chief Commissioner to--
(i)issue refund/compensation due, as per law and without prejudice to the decision of the Tribunal, within 21 days; and
(ii)report compliance within 07 days thereafter.
C.M.A./251/FTOOrder accordingly.