ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to investigate cases where dubious/manual assessment orders were issued to taxpayers using fake records/data by the field formations in violation of the FBR directive of 2015.
Through a new order issued by the FTO, the FTO has reminded the FBR that the issuance of impugned duplicate assessment orders to taxpayers is contrary to law and maladministration.
“This instant case reflecting dubious manual orders may be the tip of the iceberg; hence a thorough investigation is required to unearth the loss of legitimacy of government revenue through the issuance of manual orders having fake (Demand & Collection Register) DCR numbers since Board’s direction dated June 30, 2015”, FTO directed the FBR.
Under the FBR’s instructions dated June 30, 2015, the bar-coded speaking orders were required to be issued to the taxpayers and not the manual assessment orders.
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The FTO order revealed that the complaint has been filed in terms of Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), against duplicate illegal assessment orders for Tax Years 2016, 2017 & 2020. The complainant is an individual engaged in the business of running a rice husking mill. The Inland Revenue Officer, Unit-XII, WHT Zone, RTO Hyderabad carried out a withholding audit for Tax Years 2016, 2017 & 2020 and issued manual orders.
Thereafter, the department (Dept) issued show cause notice for withholding audit for the above-mentioned years again. The Complainant replied that the monitoring of withholding audit for these years were already conducted by previous Officer. But without examining the facts, the Unit Officer issued bar coded assessment orders for Tax Year 2016 on 28.06.2022 and for Tax Years 2017 & 2018 on 29.06.2022 through IRIS creating tax liability of Rs.35,746,758, Rs.19,517,692 and Rs.29,405,862 respectively.
It is observed that manual assessment orders under Section 161/205 of the Ordinance for Tax Years 2016, 2017 & 2020 were issued on 25.12.2017, 17.08.2018 & 18.08.2020 respectively. These manual orders contain fake DCR numbers, which could not be verified from the relevant Demand and Collection Register of the Unit. Even the paltry tax demand created in this dubious way had not been carried forward in subsequent year for recovery action, resulting in loss of legitimate Govt revenue. The manual orders were issued in violation of FBR Circular dated 30.06.2015 which states that no notice under Income Tax Ordinance 2001 be issued to taxpayers, wef, 01.07.2015 without a system generated Bar Code. These unverifiable orders have been signed & issued by Nazir Ahmed Soomro, IRO, Unit-XII, WHT Zone, RTO Hyderabad. Apparently, these manual needs review and if found erroneous in so far these are prejudicial to the interest of revenue, the Dept may invoke Section 161(3) of the Ordinance against these manual orders.
The FTO has recommended the FBR to direct the Commissioner IR, Withholding Zone, RTO Hyderabad to revisit the impugned duplicate orders for Tax Year 2016 and for Tax Years 2017 & 2020, in terms of Section 122A of the Ordinance, after affording proper opportunity of hearing to the Complainant and as per law.
The FBR should direct Member Admin to conduct a fact-finding inquiry into passing unverifiable orders, in violation of Board’s direction dated June 30, 2015 and causing loss of revenue in order to initiate disciplinary proceedings under E&D rules, FTO order added.
Copyright Business Recorder, 2022
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