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ISLAMABAD: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has provided relief to a number of taxpayers in complaints filed against the Federal Board of Revenue (FBR) involving issues of refunds, physical verifications, review of assessment orders, transfer of jurisdiction and inter tax adjustments.

The office of the FTO, an oversight body, providing relief to the aggrieved taxpayers has once again come to the rescue of citizens who had approached the FTO after getting no response from FBR offices in the field formations.

The complaints have been filed by the taxpayers seeking sanction of refunds, physical verification, review of assessment order, transfer of jurisdiction and development of a system of inter tax adjustment.

In the first case, the complainant applied for attested copies of the assessment order dated March 18, 2021, but the request was refused on grounds that the order-in-original (O-in-O) has already been posted on the available address of the complainant.

FTO decided that the non-provision of attested copies of the assessment order to the complainant to enable him to file an appeal before the competent authority is clearly a perverse, arbitrary, unjust, and oppressive decision with administrative excesses by the Deptt which falls under the ambit of maladministration under the FTO Ordinance, 2000. He directed FBR to provide a copy of the decision.

The second complaint was filed against Commissioner-IR, Enforcement-I, CTO Lahore, for delay in disposal of Complainant’s refund claims for the period February 2019 to December 2020. After time limit for filing of revised sales tax returns to CIR lapsed, complainant, vide application dated May 5, 2021, applied to the Board for condonation u/s 26(3), read with Section 74 of Sales Tax Act 1990, which was not accepted by the board. Federal Tax Ombudsman recommended FBR to dispose of complainant’s application dated 07.12.2021, under section, 66, read with Section 74 of the Sales Tax Act, 1990 regarding refund/adjustment of excess sales tax, recovered through un-adjusted credit notes.

Another complaint was filed for non-sanctioning of pending balance claims in spite of several applications. The complainant also applied for adjustment of income tax refund against the sales tax demand in terms with Sales Tax General Order C.No. 3(6)ST-L&P/2002 dated 24th April, 2007. However, the Chief Commissioner declined the request on the plea that there is no systemic arrangement to inter adjust income tax refund with sales tax, hence this complaint, the balance is now being processed after intervention of FTO.

The FTO however held that the unexplainable delay in development of system for inter tax adjustment for implementation of Sales Tax General Order No.3(6)ST-L&P/2002 dated April 24, 2007 tantamounted to maladministration in terms of Section 2(3)(i)(a)(b)&(ii) of the FTO Ordinance. Federal Tax Ombudsman further directed FBR to direct Commissioner-IR, LTO, Karachi to dispose of the claim of outstanding refunds fully; and directed Members-IR (Operations) and IT, FBR to develop the system for inter tax adjustment in terms of STGO dated 24.04.2007.

In another case, the complainant, a ‘Real Estate Investment Trust’ (REIT) obtained registration on December 29, 2021 in Karachi. However, the IRIS system had placed the Complainant’s case in the jurisdiction of RTO-1 Karachi instead of CTO Karachi in violation of FBR jurisdiction order dated 01.09.2020. The Complainant submitted applications to RTO-1 and CTO Karachi on January 4, 2022 to grant NOC so that the Board could transfer the jurisdiction from RTO 1 to CTO Karachi. However, the department failed to transfer his jurisdiction to CTO Karachi. It was reported that the requisite access for change of jurisdiction by respective Chief Commissioner in IRIS portal of FBR, has been disabled by FBR (Hq). Now practically, the Secretary (IR-Jurisdiction) FBR is transferring the jurisdiction after obtaining NOC from the respective Chief Commissioners. The FTO decided that allotting wrong jurisdiction to the complainant specially in REIT cases during registration process in IRIS web portal, contrary to FBR jurisdiction order F. No. 57(2)Jurisdiction/2017/145343-R dated 01.09.2020, was tantamount to maladministration in terms of the FTO Ordinance. Federal Tax Ombudsman directed the Member (IT) for necessary correction in ‘Registration Process’ of IRIS FBR web portal so that all new registration cases automatically fall in correct jurisdiction in terms of FBR jurisdiction orders and to transfer the Complainant’s jurisdiction from RTO-1 Karachi to CTO Karachi in terms of FBR jurisdiction order.

In the case of physical verification, it was contended that the outstanding refund has not been issued for want of verification of tax credit u/s 65B of the Ordinance. After investigations it transpired that the case was selected by Additional Commissioner Audit for audit/verification u/s 122(5A) of the Ordinance and he had finalised the proceedings without proper verification by the auditor as required as per law. Since subjecting the complainant to the drill of verification of the same issue twice tantamounted to maladministration in terms of the FTO Ordinance. FTO directed the Commissioner-IR, Enforcement-I, CTO, Karachi to dispose of the claim of outstanding refund as per law and after granting proper hearing an also inquire into the action of audit officer who through his desk findings practically blocked the material step in all such cases i.e. Physical Verification by Enforcement Wing.

The FTO has also decided another case of maladministration. The complainant, a medical doctor, alleged that ex-parte assessment was framed without considering his reply submitted through web portal, his request for transfer of jurisdiction of case on the basis of his residence was not acceded to and his application for revision of assessment under Section 122(A) of the Income Tax Ordinance (the Ordinance), was summarily rejected without considering the facts of the case and affording opportunity of hearing. The actions of the assessing officer to initiate the proceedings without issuing legal notices and passing the order without considering taxpayer’s explanation as well as the Commissioner’s refusal to review the case u/s 122 (A) on the ground that right of appeal was available to the taxpayer rather than looking into facts and merits of the case tantamounts to maladministration.

FTO instructed Commissioner-IR, Zone-I, Quetta to review the assessment order under the provision of Section 122(A) of the Ordinance; after revision of the order, the jurisdiction over the case be transferred as requested by the Complainant, and any further action, if required may be initiated as per law and after affording a proper opportunity of being heard. The FTO also noted that the ineptitude on the part of tax officials, in addition to exposing interest of revenue to ground hazards, is rather responsible for creating of grievance to the taxpayer. Taxpayers appreciated timely relief provided to them and thanked FTO Dr Asif Mahmood Jah for rectifying and correcting the maladministration by the tax authorities.

Copyright Business Recorder, 2022

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