MUHAMMAD HAFEEZ & SONS KOHAT, PESHAWAR VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2012 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 862 (2012)

Income Tax Ordinance (XLIX of 2001)---

----S.114---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss. 2(3), 9 & 10(4)---Maladministration---Complaint was filed against maladministration on the part of the department for failing to decide application of deregistration due to which the complainant could not get the user ID, Password and Pin Code of E-FBR Portal---Delay of almost six years by the department to decide the complainant's application for deregistration, was tantamount to gross maladministration in terms of S.2(3) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000---Federal Board of Revenue was recommended to direct the RTO concerned, to decide the complainant's request for waiver of penalty for non e-filing of Income Tax Returns for 2010 and 2011 as per law; and keeping in view the circumstances of that case; to submit year-wise details of all pending cases of deregistration across Pakistan; and report compliance within 30 days.

Yasir Tahir, Senior Advisor Dealing Officer.

Sher Mast Khan, Authorized Representative.

Saleem-ur-Rehman, DCIR, Peshawar Departmental Representative.

FINDINGS/RECOMMENDATIONS

DR. MUHAMMAD SHOAIB SUDDLE (FEDERAL TAX OMBUDSMAN).---This complaint is filed against maladministration on the part of the Deptt for failing to decide application of deregistration since 30-6-2006 due to which the complainant could not get the User ID, Password and Pin Code of E-FBR portal.

2. The complaint was referred for comments to the Secretary, Revenue Division, in terms of section 10(4) of the FTO Ordinance, 2000. In response, the F.B.R. forwarded para wise comments of RTO, Peshawar, vide No.1(1195)S(TO-II)/2011 dated 4-1-2011.

3. During hearing, the parties reiterated the pleadings of their written submissions. The DR stated that the complainant filed deregistration application on 30-6-2006 in the Sales Tax and Central Excise Collectorate, Peshawar, which ceased to exist due to its merger in the Inland Revenue Service (IRS) on 28-10-2009. Afterwards, the complainant's application could not be traced in the RTO, Peshawar. The taxpayer's recent application, received in RTO, Peshawar, on 31-5-2011, was duly considered and the complainant asked, vide letter C.No.157 dated 7-6-2011, to produce the relevant sales tax record for deregistration audit. Even though the complainant failed to furnish the requisite record, the case for deregistration was recommended, to Joint Director (CRO), F.B.R., vide RTO, Peshawar, Letter No.1412 dated12-12-2011, on the basis of tax profile of the Company. The DR also stated that the F.B.R. had not debarred the sales tax registered persons from obtaining User ID, Password and Pin Code for e-filing of income tax returns.

4. The AR, however, contended that failure of the Deptt. to decide the application for deregistration for almost six years since 2006 without intimating any reason was tantamount to gross maladministration. In the absence of User ID etc., the complainant could not e-file income tax returns for 2010 and 2011. He prayed that the Deptt. be directed to issue User ID etc. without further delay. He also requested that the RTO, Peshawar, be directed not to impose any penalty for not e-filing the tax returns for 2010 and 2011 as the responsibility for the complainant's inability to file the returns devolved on the Deptt.

5. While the submissions of the parties were still under examination, the Central Registration Office (CRO) of the F.B.R. conveyed deregistration of the complainant from the sales tax system vide Letter No.1(1)Chief(IR-Automation)/2012 dated 14-2-2012.Chief Commissioner, RTO, Peshawar, also confirmed, vide letter No.ST/De-Reg/09/386/2009/3512 dated 15-2-2012, that Messrs Muhammad Hafeez and Sons, had been deregistered and that the database of PRAL and CRO had been updated accordingly. The AR also confirmed vide his fax massage dated 16-2-2012 that FBR had issued the required User ID, Password and Pin Code.

Findings:

6. The delay of almost six years by the Deptt. to decide the complainant's application for deregistration is tantamount to gross maladministration in terms of Section 2(3) of the FTO Ordinance, 2000. Recommendations:

7. FBR to---

(I) direct the RTO, Peshawar, to decide the complainant's request for waiver of penalty for non e-filing of income tax returns for 2010 and 2011, as per law, and keeping in view the circumstances of this case;

(ii) submit year-wise details of all pending cases of deregistration across Pakistan; and

(iii) report compliance within 30 days.

H.B.T./40/FTOOrder accordingly.