Appellate Tribunal Inland Revenue: non-compliance of stay order has penal consequence: FTO

Federal Tax Ombudsman (FTO) has observed that non-compliance of the stay order of the Appellate Tribunal Inland Revenue (ATIR) has penal consequence. Federal Board of Revenue (FBR) is directed that all the field formations be directed to be more vigilant and prompt in compliance of orders of the ATIR and the superior courts.
In a recent order issued by the FTO Office, FTO declared that stay order shall operate from the date of awareness of the order and non compliance of the order of the ATIR has penal consequence.
Sources told Business Recorder that in recently issued order by the FTO it is observed that non compliance of the order of the ATIR has penal consequence from the date of awareness of the order. Wilful default of the department is apparent from non implementation of the last stay order of the ATIR and non- conforming to the law as laid down by the High Court. Both these are maladministration. FBR is directed that all the field formations be directed to be more vigilant and prompt in compliance of orders of the ATIR.
When contacted a tax expert said that the LHC earlier had imposed a fine of Rs 50,000 upon the DCIR to be paid from his own pocket, with the remarks "since the Respondent did not order to detach the accounts of the Petitioner within the stipulated time and delayed the matter, a fine of Rs50,000 is imposed upon the Respondent, which shall be paid by the Respondent from his own pocket". In the given circumstances, the Chairman FBR is directed to look into this issue and take notice of the hasty action taken by an office of the FBR to recover tax even when the appeal is pending and especially when an interim order has been issued by the Appellate Tribunal".
FTO order stated "The department contended with two basic arguments: a) The FTO had ruled that no case of maladministration was involved and had field the compliant. b) The ATIR under its Rules 2010 is required to communicate its orders in writing.
There can be no cavil to the proposition that all order of the Superior Courts have a binding effect. Non compliance of the order of the ATIR has penal consequence from the date of awareness of the order. The factual position that has emerged from the record is that the ATIR passed three orders staying the action of the Department starting from 04.07.2014. The last stay order was extended by the ATIR on 10.12.2014. A departmental representative was present at the hearing. Thus the department was well aware of the stay order and the de-attachment, de-freezing order on that date: FTO observed.
FTO order further observed "Despite this there was as deliberate flouting of the ATIR order. This is irrespective of the contention of the Complainant that the written order was served on 12.12.2014 or of the department that written orders of the ATIR were received on 16.12.2014. Wilful default of the department is apparent from non implementation of the last stay order of the ATIR and non conforming to the law as laid down by the High Court. Both these are maladministration.
In this view of the matter the Review Petition is accepted and Findings dated 27.02.2015 stand set-aside. Presuming that the concerned Inland Revenue Officers had no knowledge of the above mentioned decision of the High Court, no adverse action is proposed against them. However, FBR is directed that all the field formations be directed to be more vigilant and prompt in compliance of orders of the ATIR and the Superior Courts, FTO order added.