FTO calls for fresh examination of case

Federal Tax Ombudsman Saleem Akhtar has turned down the orders of the Income Tax Officer and its endorsement by the Appellate Commissioner of income tax, and called for fresh examination of the case.
The complainant, Haji Mohammed Amin who sells roof slabs in Chakwal, had alleged that ex parte assessment had been made for three years 1998-99, 99-2000 and 2000-01 while he started his business in February 2001.
It was alleged that neither the ITO nor the CIT (Adjudication) gave any consideration to this issue while estimating his sales for the three years at Rs 2 million, Rs 2.5 million and Rs 3 million, respectively.
The complainant's claim that he had obtained commercial licence for business purposes in February 2, 2002, also reflected in the electricity bills pertaining to the period.
As the complainant explained the facts, the assessing officer arbitrarily assessed the sales at Rs 3.5 million, Rs 4 million and Rs 4.5 million for the three years.
During hearing, the departmental representative questioned the jurisdiction of the FTO.
The departmental representative had justified the ex parte assessments on the ground that the assessee did not file any return for these years.
The FTO's order stated that as regards jurisdiction, it may be pointed out that the Commissioner (Appeals) passed an arbitrary order causing injustice 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 CIT (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 the machinery. How far visual inspection was relevant and sufficient to support the assessment. The commissioner did not deal with this aspect nor adverted to the legal question that section 80 C was applicable to the complainant.
"The deficiencies are evident obvious on record. The proper course for the complainant would be to file an application for rectification of the appellate order."
In the meantime, the FTO has directed that such an application shall be decided by a speaking order. Compliance be made within 45 days.