Federal Tax Ombudsman former Justice Munir A. Sheikh has issued contempt notice to the Commissioner Income Tax Appeals, Peshawar asking why he should not be proceeded against for flagrant disregard of decision of the FTO.
FTO Secretariat sources told Business Recorder here on Wednesday that CIT Appeals, Peshawar had dismissed appeal of a taxpayer against the order of Income Tax Officer as barred by time on the ground that the said order was served on 29.9.2003 and not on 4.11.2003 as claimed by the appellant.
The taxpayer filed a complaint against the orders of Income Tax department on which the FTO gave his decision that the order passed by ITO for the assessment year 2000-01 was served upon the petitioner on 4.11.2003 and not on 29.9.2003, therefore the appeal was not time barred.
The sources said that according to the direction given in the same complaint, the application for rectification of the order by CIT Appeals was to be moved by the petitioner and the same was required to be decided on its own merit.
Since earlier the CIT had held the appeal as barred by time and dismissed it as such, therefore the case was not considered and decided on merit. As per direction of FTO, the CIT Appeals was required to proceed to decide whether the findings that appeal was barred by time did not suffer from mistake apparent on the record in view of findings of FTO that notice was served on 4.11.2003 and not on 29.9.2003.
The sources added that on the other hand the application filed by petitioner for rectification was dismissed by order dated 21.4.2005 by CIT Appeals by holding that the earlier order did not suffer from mistake floating on the face of the record.
The sources said that the petitioner filed a review petition on which the FTO observed, "As has already been observed that earlier order was not passed on merits of the case but on technical ground of limitation. Since the appeal had been filed within period of limitation of 30 days prescribed under the law from the date of service of the order of assessment on 4.11.2003, as held in the said complaint, it was certainly a case of mistake floating on the face of record. The reason given in the order that CIT Appeals could not sit as a court of appeal against decision was not attracted in this case."
The FTO further observed that "the confirmation of the earlier order of dismissal of appeal as barred by time, means that CIT Appeals still maintains and insists that order of assessment was served on 29.9.2003 against the findings of the FTO that it was served on 4.11.2003 as such it prima facie appears to be not only a case of defiance of the said findings of FTO but a case of flagrant disregard thereof; thus this review petition shall be registered as a case of defiance and contempt as well.
The FTO pointed out that "power of rectification/review is meant for such cases, where the case of a taxpayer did not receive consideration on merits on a wrong finding that appeal was barred by time."
The FTO concluded his observations, "Notice shall also be issued to CIT Appeals who passed the order dated 21.4.2005 of dismissal of the application for rectification, to show cause as to why he should not be proceeded against for contempt."
The sources said that the FTO secretariat has issued the contempt notice.
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