Overseas Pakistani: FTO concerned over repeated changes in tax jurisdiction

ISLAMABAD: The Federal Tax Ombudsman (FTO) has expressed serious concern over repeated changes in the tax jurisdiction of an overseas Pakistani with the sole purpose of recovery through attachment of his bank account after an exparte amendment order.

The FTO is shocked to hear that one tax office attached bank account of the taxpayer living in Germany to recover tax amount and immediately transferred his jurisdiction to another RTO.

According to the order issued by the FTO on Tuesday, the complainant is an overseas Pakistani who has been living permanently in Germany for past 20-25 years and he was never Pakistan tax resident nor did he have any source of income in Pakistan.

The complainant stated that he had purchased the property out of foreign income earned from his business in Germany.

The complainant had also filed a declaration under “Tax Amnesty Scheme 2018” on July 26, 2018 which is much earlier than the date of impugned assessment dated March 22, 2021 and though he had declared cash and prize bonds which he utilized against very same property in reconciliation of net wealth filed with revised wealth statement on 26th October 2020 and all these documents are available on his online profile.

The complainant further stated that for Tax Year 2018 original assessment order under Section 122(1) of the Income Tax Ordinance, 2001 (the Ordinance)

was amended exparte on 22nd March 2021, by treating properties purchased worth Rs 60,809,500 as concealed income and tax of Rs 20,502,825 was thus imposed and withdrawn directly from his bank account.

The perusal of the tax profile of the taxpayer shows that his address belongs to Rawalpindi and as such the jurisdiction of the case falls with the RTO Rawalpindi. During hearing the complainant has also confirmed that jurisdiction of his case belongs to RTO Rawalpindi and requested that reassessment proceedings should be completed in the same office where return was filed, amendment made, appeal order passed and tax recovery was made from the bank through coercive measure. As per facts stated above the stance of the complainant is correct in regard to jurisdiction of the case.

FTO stated: “It is strange that while making exparte assessment and effecting recovery from bank RTO Rawalpindi was well satisfied with its jurisdiction but the moment case has been set aside and possibility of refund surfaced the case is being thrown to some other jurisdiction.

So, the tax authority is directed to deal with the case in RTO Rawalpindi and not to transfer the case to any other RTO.”

The FTO office has observed that remand back proceedings have been pending since passing of order by CIR (Appeals) which have not been completed by the tax authorities. The complainant has already suffered hardship at the hands of tax authorities due to exparte amendment order passed by them and recovery of tax through coercive measure by attachment of his bank account.

The taxpayer had to go through appeal procedure to get some relief. So, in the instant case, the tax authorities should have completed reassessment proceedings expeditiously to provide some relief to the taxpayer which has not been done.

The findings of the FTO office revealed that the transfer of jurisdiction at this point of time and in the face of facts stated above constitutes maladministration in terms of Section 2(3) (i)(b) of the FTO Ordinance, 2000.

The FTO has directed the FBR to make sure that jurisdiction of the case is not transferred arbitrarily and unilaterally and also directed CIR RTO Rawalpindi to complete the reassessment proceedings expeditiously, as per law and in the light of directions of appeal order, the FTO order added.

Copyright Business Recorder, 2023