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ISLAMABAD: President Arif Alvi has confirmed the key recommendations of the Federal Tax Ombudsman (FTO) to the Federal Board of Revenue (FBR) to issue instructions to field formations to avoid futile litigation and wastage of public resources (taxpayer’s money).

In this regard, the president has issued an order against the FBR and upheld the FTO’s recommendations.

Through the new order, President Arif Alvi has dismissed the appeal filed by the FBR against the FTO.

The complaint was lodged against the tax authorities of the FBR through tax lawyer Waheed Shahzad Butt wherein the complainant questioned the working of FBR being engaged in futile litigation in courts and wastage of precious exchequer resources.

FTO has issued directions to the FBR to issue administrative instructions to all field formations, communicating the ruling of Supreme Court. The FBR should also direct the Director General Internal Audit & FBR Member Legal to conduct random inspections of second appeals filed and reference so as to judge the rationale and strength of departmental cases pending at appellate & judicial fora.

FTO disposes of 5000 tax complaints in 10 months

When contacted Waheed Shahzad Butt told this correspondence that it is duty of FBR to dispense justice and functionaries representing FBR are supposed to uphold the dignity of law.

On the other hand, due to ongoing practice under the powers available with IRS officials, the process of law is being violated by some tax officials. 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 FBR offices involved in frivolous appeals are not personally responsible for the said litigation.

FTO order states: “order under section u/s 122(1) suffers from serious violations of legal provision, deviations from departmental norms and practices and arbitrariness. It is strange that cases wherein tax demand of Rs.678 million has been raised by the officer, the record is silent about material details/ discussion and reasoning. Instant case is a classic example wherein despite glaring most and blatant violations of law, departmental norms, department instructions, filing of 2nd appeal and recourse to unending litigation appear to be the preferred choice of FBR’s functionaries. Merit or no merits, right or wrong department has to stand by the order made by its officers is the rule of the game and this attitude itself is the breeding ground for unending maladministration”.

President order stated “the recommendations of the FTO (i) issue administrative instructions to all field formations, communicating the ruling of Supreme Court and (ii) direct DGs Internal Audit & Member Legal to conduct random inspections of 2nd appeals filed and references so as to judge the rationale and strength of departmental cases pending at appellate & judicial fora, are unassailable in the circumstance of the matter.

Suffice it to observer that the Departmental Representative has informed that a Committee of Commissioners in every RTO, LTO etc have already been constituted by the FBR to examine the cases to be assailed before the High Courts and Supreme Court of Pakistan. In such circumstances, the FBR may enhance the scope/mandate of the said Committees to those cases in which appeal are to be filed before the appellant tribunal inland revenue (ATIR).

Accordingly, the President, as per his decision, has been pleased to dispose of the representation of the FBR, President’s order added.

Copyright Business Recorder, 2023

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