The Federal Board of Revenue has wrongly assumed that mere filing of representations/appeals before the President against the orders of the Federal Tax Ombudsman (FTO) would automatically tantamount to grant of 'stay' for putting in abeyance the implementation of the FTO orders against the tax officials involved in cases of gross maladministration.
This issue of misuse of the representations/appeals by the FBR has been raised by the FTO in its annual report-2010 released here on Wednesday. The FTO report has clearly said that only filing of an appeal and representation against the FTO decisions would not operate as 'stay' unless an order is specifically obtained in each case.
The report highlighted that the FBR officials invariably raise jurisdiction-related objections when taxpayers file complaints with the FTO. After the FTO findings are delivered, a certain number of cases involving gross maladministration, especially those where responsibility of staff is required to be fixed are represented before the Hon'ble President of Pakistan.
In this way, tax officials take undue advantage of the automatic stay granted through these representations, as a notification of the law and Justice Division allowed suspension of the FTO recommendations during the pendency of the appeal. However, according to the law, mere filing of an appeal and representation against the FTO decisions would not operate as stay unless an order is specifically obtained in each individual case.
On January 26, 2005, a reference was made to the president of Pakistan by the then FTO, former Justice Munir A Sheikh. It appears that this reference did not attract the attention of the President's Secretariat. The issue of automatic stay in the cases of Representations constitutes a critical challenge to the Revenue Division as well as the FTO Office because it's misuse deny the relief given by the FTO Office to aggrieved taxpayers and allows the guilty tax officials go scot-free, the FTO added.