ISLAMABAD: Federal Tax Ombudsman (FTO) has unearthed that the Regional Tax Office (RTO) Lahore has committed maladministration by framing an illegal case of mis-concealment against an expatriate from Saudi Arabia without serving notices under the law.
According to an order issued by the FTO against the RTO Lahore, the said complaint was filed under section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) against alleged illegal orders passed under section 122(1) of the Income Tax Ordinance, 2001 (the Ordinance) and passed u/s 122(5A) of the Ordinance, for Tax Year 2016.
Brief facts of the case are that the complainant, an expatriate, had served in Saudi Arabia and returned in 2016 after retirement.
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The complainant e-filed return of income along with wealth statement for Tax Year 2016. The department initiated proceedings on the basis of definite information that complainant had purchased a property in DHA Lahore valuing of Rs.3.235 million, and the same has not been declared in the wealth statement; hence; issued notices u/s 122(9) of the Ordinance, but no response was made by the complainant. Therefore, RTO Lahore passed order u/s 122(1) of the Ordinance dated 29.09.2021 creating tax demand amounting to Rs.0.528 million for Tax Year 2016.
Thereafter, the department again initiated proceedings against the taxpayer and issued notice u/s 122(9) of the Ordinance calling evidence of foreign remittances amounting to Rs.23.371 million declared in the wealth statement for Tax Year 2016. The complainant did not respond to the notice; hence, the department passed order dated 11.06.2022 u/s 122(5A) of the Ordinance creating tax demand amounting to Rs.8.531 million for Tax Year 2016.
The complainant contended that he never received any notice from the department as he is unable to use the IRIS login; therefore, impugned orders passed by the department be set at naught. Further complainant also averred that he has no business in Pakistan and earned foreign remittances from serving in Saudi Arabia from 1978 to 2016 till his retirement.
FTO has recommended the FBR to direct the Commissioner-IR, Zone-II, RTO Lahore to invoke provisions of section 122A of the Ordinance and cancel the order dated 29.09.2021 passed u/s 122(1) of the Ordinance for Tax Year 2016.
The FBR should also direct the Commissioner-IR, Zone-II, RTO Lahore to re-visit the order dated 1passed u/s 122(5A) of the Ordinance by invoking provisions of section 122A of the Ordinance for Tax Year 2016 and pass lawful order after providing proper opportunity of being heard to the Complainant, as per law.
Copyright Business Recorder, 2023
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