LAHORE: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has sought clarification from the Federal Board of Revenue (FBR) on the legal status of withholding tax on judicial and special judicial allowance admissible to district judicial officers.

The clarification has been sought against a complaint filed by an Additional Session Judge in consequence to the judgments of the two high courts, followed by grant of exemption of judicial and special judicial allowances from deduction of income tax paid to the judicial officers of district judiciary by the FBR vide letters dated 29.03.2021.

However, this exemption was withdrawn by FBR on 28.05.2021 on the plea of pendency of appeal before the Supreme Court. According to the complainant, in pursuance of a recent direction by the Supreme Court, the FBR letters withdrawing the exemption were no more in field, therefore, the letter allowing exemption should be implemented. He filed an application before Chief Commissioner-IR, RTO seeking refund of tax from 2016 to 2020 to the tune of Rs900,634. But the department did not refund the amount despite repeated requests.

The FTO observed that the FBR had withdrawn the exemption in the light of Supreme Court’s short order by which the order of the two high courts was suspended. Meanwhile, the tax ombudsman has directed the FBR to treat the subject complaint as representation on behalf of the complainant and issue necessary clarification within 30 days after taking into consideration all legal aspects of the case. The FTO has further directed that the commissioner concerned is to dispose of the complainant’s refund application in light of the above-referred clarification of FBR after providing the complainant an adequate opportunity of hearing.

Copyright Business Recorder, 2022