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ISLAMABAD: Federal Tax Ombudsman (FTO) in an own motion case declared that failure of the Federal Board of Revenue (FBR) to properly serve notices/orders to non-residents (NR) tantamount to mal-administration and directed the FBR to devise system based mechanism/ framework to ensure timely service of the notices/orders to the taxpayers.

It is learnt that Own Motion case was initiated by the FTO on complaints filed by some Islamabad based taxpayers through advocate Waheed Shahzad Butt, wherein FTO ordered the FBR to devise system based mechanism/ framework so as to ensure that service of the notices/orders is made on the taxpayers properly well within time, in accordance with section 218 of the Ordinance, in letter and spirit; develop mechanism/legal framework for ensuring that the AR are declared timely by the CIR in respect of non-residents, direct the CIR concerned of LTOs/ MTO's/ RTO's/ CTO's to dispose of the pending cases of 7,865 NR's (non-resident) cases.

FTO order states "Own Motion investigation, initiated through exercise of jurisdiction, conferred under Section 9(1) of the FTO Ordinance, 2000 against failure of the department to adhere to the provisions of sections 172(3), 173 and 218 of Income Tax Ordinance, 2001 relating to service of notices/orders on the Residents/Non-residents, which resulted in multiple difficulties faced by the resident tax payers generally and particularly. As a result of adjudication of quasi juridical matters without adhering to the above provisions of law, in letter and spirit vitiate the entire proceedings and become cause of multiple grievances of maladministration against the Deptt.

The Chief Commissioners-IR LTO's/MTO's/RTO's and CTO's filed comments related to their regions. It was contended that after introduction of IRIS System, it was mandatory to make every correspondence through the system w.e.f Tax Year 2014. However, for facilitation purposes, despite the above provisions, manual mode for service was also used. Precisely, the following service modes were used: online via IRIS; Courier Service (GPO); and Notice Server of Deptt.

Furthermore, NADRA Verisys System was available to track such cases where persons were not traceable on their declared registered addresses so as to ensure proper service of notices and judicious disposal of tax proceedings

However, in the light of instant 0M, instructions were once again issued to all the field formations to ensure strict adherence to the provisions of section 218 of the Ordinance, in letter and spirit.

Failure of the Deptt to properly serve notices/orders in terms of section 218 of the Ordinance, and appointment of the AR's in non-resident cases, is tantamount to mal-administration, in terms of Section 2(3) (i)(a) & (ii) of the FTO Ordinance. FBR to devise system based mechanism/ framework so as to ensure that service of the notices/orders is made on the taxpayers properly well within time, direct the CIR concerned of LTOs/ MTO's/RTO's/CTO's to dispose of the pending cases of 7,865 NR's: FTO ordered.

Copyright Business Recorder, 2021

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