ISLAMABAD: Federal Tax Ombudsman (FTO) has unearthed serious maladministration committed by the officials of the Regional Tax Office (RTO), Abbottabad against a refund claimant.

The FTO order revealed that the tax officials of the RTO Abbottabad applied wrong sections of the Income Tax Ordinance for taking action against the refund claimant.

According to an order issued by the FTO here on Wednesday, FTO has directed the Federal Board of Revenue (FBR) to reprimand the officer who has bye-passed legal provisions by passing patently illegal and unjust orders and report compliance within 45 days.

The FBR should also ensure that Commissioner concerned will revisit the order passed u/s 221(1) for TY 2019 and a speaking order is passed invoking appropriate provisions of law.

The FBR should also dispose of the refund application as per law and after giving proper hearing.

The complainant’s refund application for tax year 2019 was processed, order u/s 170(4) was passed and refund was credited to his bank account. Later on, the department passed an order under section 122 (5A) of the Income Tax Ordinance 2001 whereby earlier refund order was amended.

The Commissioner Inland Revenue (Appeals) annulled the said order of the tax department to look into the legality of the impugned order passed u/s 122(5A) of the Income Tax Ordinance.

The assessing officer has therefore invoked a wrong provision of section 122(5A) to amend the refund order. The section 122(5A) does not empower the assessing officer to amend a refund order passed u/s 170 of the Ordinance, FTO said.

The department instead of invoking amendment assessment provisions, erroneously rectified the earlier order u/s 122(5A), FTO order added.

Copyright Business Recorder, 2023