Cases before/or decided by FTO: 'all appellate tribunals estopped from rendering judgement'

The Federal Tax Ombudsman (FTO) has ruled that all appellate tribunals or authorities are effectively estopped from rendering judgment on any similar issue decided or investigated by the FTO as per provisions of Federal Ombudsmen Institutional Reforms Act, 2013 (FOIRA).
Sources told Business Recorder that while deciding a case in a complaint against alleged departmental non-implementation of appellate order passed by Commissioner (Appeals), the FTO order observed that the Commissioner Inland Revenue Appeals) having rendered a contrary judgment on validity of SRO 1003 of 2011 has violated the bar laid down in Section-18 of FOIRA read with section 24 of the said statute. This segment of the CIR (Appeals) judgment is in direct conflict with the findings/recommendations recorded by the FTO in the above-cited complaints disposed of by him and the segment is rendered 'per incuriam'/void ab-initio as it violates the mandatory provisions of Section-18 of FOIRA.
Federal Tax Ombudsman (FTO) has observed that as per provisions of section-18 of Federal Ombudsmen Institutional Reforms Act, 2013 (FOIRA), once an issue is under investigation before the FTO &/or decided by the FTO, all other appellate fora, Tribunal or Authority are effectively estopped from rendering judgement on any similar issue placed before them.
Explaining the provisions of the FOIRA, a Lahore-based tax lawyer Waheed Shahzad Butt told Business Recorder that the Appellate Tribunal and Commissioner Appeals cannot exercise jurisdiction to entertain a matter pending with FTO under complaint or review under the FOIRA. All tax employees including those performing appellate functions as also the Tribunals, Courts or Authorities administering/adjudicating "Relevant legislation" under the FTO Ordinance, 2001 could not entertain tax-related matters already taken up and decided by the FTO under the FOIRA.
For instance in case of litigation under the provisions of Income Tax Ordinance, 2001 and Sales Tax Act, 1990, authorities like Commissioner Appeals and Appellate Tribunal shall also be restrained from creating parallel litigation when the issue is pending before FTO and/or decided by the FTO, Waheed added.
FTO order states, "As for tax treatment of receipts other than for services rendered, it is a fact that the CIR (Appeals) has not issued any specific directions in this regard. Notwithstanding, the CIR (Appeals) silence on their tax treatment, the fact remains that these cannot be subjected to levy of minimum tax under section 153(1)(b) of the Ordinance in the same manner as in the case of receipts for services rendered in Pakistan. However, where the tax demand arising on "other income" and from receipts against services rendered or provided is higher than the minimum tax demand under section 153(1)(b) of the Ordinance, the latter is to be adopted, the FTO maintained.
The complainant/taxpayer has filed a complaint before the FTO for implementation of orders pertaining to Tax Years 2010 and 2011. These orders were passed by the CIR (Appeals) Lahore deciding complainant's appeals against assessments made by the Addl Commissioner IR, LTU Lahore under section 122(5A) of the Income Tax Ordinance 2001, (the Ordinance) to charge minimum tax under section 153(1)(b) of the Ordinance read with section 153(6) of the Ordinance against receipts for services rendered or provided pertaining to Tax Years 2010 and 2011 as per orders dated 31.05.2012, for both years.
As per findings of the FTO, the complainant's contention that the CIR (Appeals) has ruled in his favour in Tax Years 2010 and 2011 is not correct and his appreciation of the adjudication as made by the 1st appellate authority is misconceived. The specific relief sought by complainant, that appeal effect be ordered to be given to the orders as passed by the CIR (Appeals) for Tax Years 2010 and 2011 in the manner described by the complainant, is misconceived. No such relief arises at the present stage of the matter, as discussed above.
The observations recorded by the CIR (Appeals) with regard to SRO.1003 of 2011 are contrary to law and tantamount to maladministration as discussed above and need to be addressed by the 1st appellate authority. The FTO has recommended the Commissioner (Appeals) to take cognisance of the lapses referred to supra and initiate necessary remedial action, as per law; and report compliance within 21 days, the FTO order added.