ISLAMABAD: Federal Tax Ombudsman (FTO) has asked the Federal Board of Revenue (FBR) to constitute a fact finding committee to examine refund related queries and initiate disciplinary proceedings against corrupt tax officers.

Brief facts of the case are that the complainant’s company dealt with import and sale of yarn, and filed two complaints against commissioner –IR Enforcement –I, Medium Tax Office (MTO), stated that DC-IR passed order on the basis of report of I &I, for recovery of adjudged amount of Rs 3478,000. The amount not only contained sales tax but also value of goods along with default surcharge, under section 34 ibid and penalty under section 33 (5) ibid.

Complainant being aggrieved filed appeal multiple times before commissioner –IR and before Appellate Tribunal Inland Revenue who remanded the case for de novo consideration. However, department failed to initiate complete proceedings and let the statutory limitation expire. Later on, the complainant’s company requested the department for refund; however, the same remained unattended or considerable time.

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Therefore, complainant took up matter with Federal Tax Ombudsman. Chief Commissioner-IR, MTO stated that his office was not aware of any proceedings in the case after remand by ATIR, as jurisdiction over the case was transferred from CTO to Enforcement-I, MTO but record of the case had not been transferred by Enforcement-I, CTO, Karachi to them despite their request for the same. According to the findings of FTO, Commissioner-IR (Appeal) also did not bother to look into the matter despite raising the issue by them and simply upheld the order Due to this blunder, case was remanded back by Appellate Tribunal to original authority for de novo consideration and passing fresh order which was not done within permissible time. It was further averred that presently no order is in field, therefore, amount recovered from them is refundable. DR confirmed that order passed, contained value of goods also which seems mistake on part of the adjudicating authority. He reiterated that record of the goods is still not transferred by Enforcement Division, CTO, Karachi to Enforcement Division MTO, Karachi, therefore, they are not in a position to do anything in this case.

FTO’s finding stated that this was a glaring case of maladministration on part of the officers as at initial stage, adjudicating officer passed order in casual manner which proves from the fact that he included value of the goods into amount of tax as recoverable. Secondly, the officer of CTO kept sleeping after remand of case from Appellate Tribunal and let the prescribed limitation period passed. Resultantly, case time barred, in terms of Section 11B(2) of the Act.

It seems that record of the cases, remanded back by Appellate fora, is not maintained properly, resultantly there are chances that cases of fraud may also be receiving the same fate after remand. Now withholding of Complainant’s money, without any legal order in field, has become illegal and therefore refundable.

The FTO recommended FBR to direct Member (HR/Admin) FBR to constitute a fact finding committee to examine the issue, fix responsibility against delinquent officers/officials and initiate disciplinary proceedings against them.

a) how adjudicating officer passed order where amount of value was also included for recovery?

b) how Commissioner-lR (Appeals) Karachi upheld order so bad in law? Was contention of Complainant recorded and examined by him in his order?

c) why concerned officer failed to initiate fresh proceedings on remanded case and pass fresh assessment order?

d) why record of the case has not been transferred by Enforcement Division, CTO to MTO, Karachi after change in jurisdiction?

FTO has also directed FBR that the Chief Commissioner-lR, CTO, Karachi to ensure transfer of record from Enforcement-I CTO, Karachi to Enforcement-I, MTO, Karachi immediately and Commissioner-lR, Enf-1, MTO, Karachi to require concerned officer to process refund of Complainant, filed under Section 66 of the Act, along with compensation charges, ,in terms of Section 67 of the Act.

Copyright Business Recorder, 2022