FBR releases Rs45m to TDCP as withdrawal declared illegal

LAHORE: The Federal Board of Revenue (FBR) has released Rs.45.371 million of the Tourism Development Corporation of Punjab (TDCP) for withdrawing from the bank account of the Corporation without following the due process provided in Income Tax Ordinance, 2001.

According to details, an assessment order was passed against TDCP on 08.04.2022, creating a demand of Rs.45,371,031. The Corporation filed an appeal against the assessment order before Commissioner Inland Revenue (Appeals) on the ground that the requisite notice under Section 138 of the Ordinance has not been issued. However, the Commissioner Appeals refused to grant a stay to the Corporation.

In the meantime, the assessment officer issued a notice under Section 140 of the Ordinance and withdrew the amount from the bank account of the Corporation.

The Corporation challenged the proceedings at the level of second appellate forum with a plea that the notice under Section 138 of the Ordinance was a necessary pre-requisite for taking action under Section 140 of the Ordinance for the withdrawal of the amount from its bank account, which was not issued in the present case. But the department contended that the amount was lawfully withdrawn from the bank account of the petitioner.

The appellate forum did not agree with the plea of the department, maintaining that the department before invoking Section 140 of the Ordinance was required to issue a notice under Section 138 of the Ordinance, intimating the taxpayer and requiring him to make payment of tax liability within a reasonable time.

It further pointed out that the trial and due process are the fundamental rights of every citizen of Pakistan, but in the instant case, no notice under Section 138 was served before the invocation of Section 140.

Therefore, the impugned actions regarding attachment and recovery of tax amount from the bank accounts of the Corporation are illegal and without lawful authority.

According to the appellate forum, fair trial and due process are fundamental rights of every citizen to determine his civil rights and obligations. In the instant case, no notice was served on the petitioner before invoking section 140; therefore, the impugned action of the respondents seeking recovery from the banks of the petitioner is without lawful authority.

It is pertinent to mention here that a notice under section 138 of the Ordinance is a mandatory requirement without which the recovery proceedings pursuant to section 140 of the Ordinance cannot take place.

The appellate forum declared the withdrawal of the amount from the bank account of the Corporation without lawful authority and of no legal effect. It passed an order to release the amount of Rs.45,371,031 to the Corporation.

Copyright Business Recorder, 2023