Issuance of notice: IRO penalized for failing to observe due diligence

ISLAMABAD: The Federal Board of Revenue (FBR) has imposed a penalty to stop six months “performance pay allowance” of an Inland Revenue Officer (IRO), Regional Tax Office Lahore for issuing wrong notice under section 111 (un-explained income or assets) of the Income Tax Ordinance, 2001 to a taxpayer without examining his tax records.

Sources told Business Recorder that disciplinary proceedings were initiated against IRO under Civil Servants (Efficiency & Discipline) Rules, 2020 for issuing a notice under section 111 confronting non-declaration of a vehicle in Tax Year 2018 without confirming that the said vehicle has already been declared by the taxpayer in his Wealth Statement. IRO has failed to observe due diligence in issuing statutory notice without confirming that the confronted vehicle has already been declared in the Wealth Statement of the taxpayer readily available on the IRIS.

When contacted, tax lawyer Waheed Shahzad Butt told this correspondence that to avoid futile litigation and wastage of public resources in the shape of taxpayer’s money it is the need of the hour to avoid unnecessary futile litigation. It is well known that the Government is the largest litigant in courts being a “compulsive litigant” because the expense is on the Government. This happens because public functionaries involved in frivolous appeals/ litigation are not personally responsible and don’t pay from their own pockets.

Waheed further said that FBR should decide to take action against irregularity, corruption and inefficient elements working in the agency (FBR). Since July 2022, so far 26 officers and 19 officials have been suspended whereas three employees have been dismissed from service. Besides, permission has also been sought from the Prime Minister to initiate action against two senior officers. Prompt action should be taken against the IRS functionaries found involved in irregularity and inefficiency. The image of the organization should be improved as well as the perception of the taxpayers. Thus, the taxpayers can pay their due taxes in time without any hesitation and suspicion thinking that their paid taxes would be utilized for the welfare of the ordinary people.

FBR order stated that the “Commissioner submitted her inquiry report with the findings that both the charges levelled against the accused officer stand established; however, since the accused officer rectified his mistake by withdrawing the Notice under section 111 (1), hence, minor penalty of “Censure” is recommended. After having considered all aspects of the case including the Inquiry Report, recommendations of the Inquiry Officer, the Member (Admn/ HR) agreed with the findings of the Inquiry Officer that IRO is guilty of the charge of “Inefficiency”.

Since no malafide intentions were established, Member (Admn/HR) in his capacity of Authority imposed a minor penalty of “Censure” upon IRO under Rule 4(2) (a) of Civil Servants (E&D) Rules. He is re-instated into service and performance allowance of IRO is hereby stopped for 3 months from the date of award of minor penalty, he will have to appear afresh for restoration of the same under the policy: FBR order added.

Copyright Business Recorder, 2023