Failure to issue tax relief orders: FTO unearths hundreds of cases involving LTOs and RTOs

ISLAMABAD: The Federal Tax Ombudsman (FTO) has unearthed hundreds of cases involving Large Tax Offices (LTOs) and Regional Tax Offices (RTOs) which failed to issue fresh orders in favour of taxpayers after their illegal assessment orders were cancelled/deleted or annulled by the Commissioner Appeals.

In this connection, the FTO Office has completed own motion investigation against the Federal Board of Revenue (FBR) exposing the biggest hurdle in providing tax relief to hundreds of genuine cases of taxpayers.

The FTO’s own motion investigation concluded that, “FTO Secretariat has unearthed hundreds of cases wherein unjustified delay beyond the statutory timelines stand established at various LTOs, CTOs and RTOs”.

According to the order of the FTO, section 124 of the Income Tax Ordinance, 2001 (the Ordinance) deals with giving appeal effect to the various appellate orders by field formations of FBR. Different timelines have been prescribed for giving appeal effect under various situations. In cases covered under subsection (1) appeal effect is to be given within two years from the end of financial year in which the appellate orders of CIR (Appeal), Tribunal, High Court or Supreme Court, as the case may be, was served on the Commissioner. As per sub-section (2) where a case is set aside by various appellate authorities appeal effect is to be given within one year from the end of the financial year in which the CIR/CIR (Appeals), as the case may be, was served with the appellate orders. Sub-section (4) provides that where direct relief is provided in an order passed u/s 129 & 132 of the Ordinance, Commissioner shall issue appeal effect order within two months of the date the Commissioner is served with the order.

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While investigating various individual complaints it is commonly observed that the said timelines are not adhered to by the Department/authorities and in this connection disciplinary proceedings have also been initiated in some cases against Commissioners on the recommendations of the FTO Secretariat. Neglect and inattention in implementation of provisions of section 124 is observed repeatedly therefore, Own Motion investigation was initiated by the FTO.

The CIR LTO Islamabad requested for extension in time for submission of the required information which was allowed till 15.12.2021. It was stated that the instant own motion investigation was also not backed by any specific complaint. Since stay was granted by Islamabad High Court (IHC), the proceedings on this Own Motion investigation may be adjourned.

The findings of the FTO order revealed that the negligence, inattention, delay, incompetence and inaptitude in discharge of duties and responsibilities on the part of the LTO, Islamabad for non-giving appeal effect to appellate orders u/s 124(1) and 124(4) of the Ordinance, within the prescribed period and concealing this aspect during FTO’s investigation is tantamount to maladministration.

Copyright Business Recorder, 2022