Issuance of compensation: President rejects FBR representation against FTO recommendations

The President has rejected a representation filed by Federal Board of Revenue (FBR) against the recommendations of Federal Tax Ombudsman (FTO) to warn the FBR officials to stop behaving unfairly and unreasonable, failing which they will be dealt with under Section 22 of the FTO Ordinance.
Sources told Business Recorder that the President while rejecting the representation filed by FBR has confirmed the order passed by FTO wherein the FTO has recommended to FBR to direct the Chief Commissioner to issue compensation due, as per law and warn the officials to stop behaving unfairly and unreasonable, failing which they will be dealt with under Section 22 of the FTO Ordinance, in addition to any other action deemed fit against them.
When contacted, a tax lawyer was of the view that in the context of implementation of the FTO''s recommendations, there is a visible dispute between the FBR officials and FTO office where tax department file representations instead of implementing decisions. The FTO oversight of field formations is deeply resented by certain officers in the FBR and they view the FTO''s actions as an encroachment on their domain. The FTO oversight has also reduced corruption in the revenue division. It is high time that drastic steps were taken to bring the offending officials to heel. The top revenue division hierarchy needs to take an effective action to discipline the officials who indulge in maladministration.
The President order stated "after multiple rounds of litigation in the departmental hierarchy, upholding complainant''s right to claim refund, but still failing to get any relief, complainant approached the FTO. Some hearings took place and ultimately during pending of claim, refund amount was issued, whereupon complainant sought withdrawal of the complainant. FTO, however, found treatment meted out to complainant by Agency (Revenue Division) to be arbitrary, unreasonable and tantamount to maladministration. Following recommendations were made by the FTO: the FBR to direct the Chief Commissioner to: Issue compensation due, as per law; warn the officials referred to in para 3 to stop behaving unfairly and unreasonable, failing which they will be dealt with under Section 22 of the FTO Ordinance, in addition to any other action deemed fit against them.
This representation has been field by Agency, stating the compensation is not due and that other observations of the FTO are uncalled for. Complainant in his comments has reiterated his right to get compensation. In view of the conduct of employees of Agency, the FTO has directed to resolve the issue of compensation in accordance with law. So far as the second recommendation concerning employees of Agency is concerned, the same is also subject to due process of law. No grounds stand made of interference with recommendations of the FTO.
Accordingly, the President has been pleased to reject representation of Agency. Compliance to be reported to the FTO''s Secretariat: the President order stated. Tax lawyer further added that recently FTO, Abdur Rauf Chaudhry has issued a landmark decision directing the FBR to warn the assessing officer for levelling allegation of deliberate fabrication of accounts by the Chartered Accountant/Auditor in connivance with taxpayer without referring to any supporting evidence. In the said landmark order the FTO declared that the assessing officer has dubbed the final accounts as "Fake" without any analysis with evidence. This is a serious charge not only against the complainant but more significantly, against the chartered accountant/auditor and has far reaching ramifications/implications. The departmental ''finding'' means in effect that the chartered accountant/auditor is complicit with the taxpayer in a scheme to defraud revenue.
An officer of Inland Revenue Service working as "Appeal Commissioner" or as an "Accountant Member" in the tribunals falls under the broad definition of "Tax Employee" as per provisions of the FTO Ordinance, 2000 and in case if the FTO has reason to believe that any Tax Employee has acted in a manner warranting criminal or disciplinary proceedings against him, he may refer the matter to the appropriate authority for necessary action to be taken within the time specified by the FTO. The Chairman FBR must have a critical check and balance system over the Tax Employees working in Tribunals, tax lawyer added.