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ISLAMABAD: The Federal Tax Ombudsman (FTO) has decided to conduct an investigation against the Member Legal Inland Revenue Federal Board of Revenue (FBR) for his silence to clarify the matter of futile litigation and binding circular issued by the FBR to follow orders passed by the Appellate Tribunal Inland Revenue Pakistan (ATIR).

It is reliably learnt that on the basis of a complaint moved by a tax lawyer, Waheed Shahzad Butt, the office of the FTO had issued notice to the secretary Revenue Division and FBR Member Legal to submit a reply to the allegations contained in the complaint by August 10, 2023. The FTO will probe the allegations of maladministration as to why the FBR’s legal wing is not vigilant to respond to queries raised by the taxpayers.

Tax lawyer Butt, who has highlighted this crucial issue, said that the FBR Legal Wing is facing severe criticism for its failure to effectively address the issue of taxpayer facilitation. He added that despite the FBR’s responsibility to ensure fair and equitable taxation for all citizens, it has come to light that various litigants are being deprived of their rightful relief entitlements by the ATIR. This failure to cater to the specific needs of this vulnerable segment of the population has drawn sharp criticism from various quarters.

The complainant added, in the instant case meaningful long silence (30.05.2023 to 25.07.2023) on the part of Member Legal for not clarifying a simple matter pertaining to avoidance of futile litigation at the cost of taxpayer money in court, reflects nothing but extreme maladministration of justice, worst incompetence and blunt violation of fiscal laws. Nobody at FBR-Legal is ready to accept their professional obligation to perform duties in accordance with Section 206 of the ITO, 2001, the FBR Act, 2007 read with Articles 4 and 5 of the Constitution.

It has been observed with grave concern that various Commissioners Appeal are involved in blunt violation of orders passed by the ATIR, while in the light of FBR’s Circular-Letter No: 1(7) DT-14/92 dated 10/02/1992 with the subject “Orders of Tribunal binding on tax officials” it was categorically directed to show proper respect to the orders of the ATIR as they are of binding nature on all subordinate income tax authorities and required under the law to be followed.

It is requested to kindly clarify the matter: (i) whether cited FBR’s Circular dated 10.02.1992 is still intact and applicable on all FBR sub-ordinate functionaries including forum of CIR-Appeals; (ii) whether a relief allowed by the ATIR being final fact finding authority under fiscal laws (including ITO, 2001) in a tax year (for instant 2020) to a specific taxpayer is applicable and binding on the forum of CIR-Appeals for succeeding tax years (for instant 2021 and 2022) where the same issue was impugned before the CIR-Appeals (irrespective of the fact that the department has preferred reference against the ATIR order/decision); (iii) Whether the forum of CIR-Appeals can disregard and disobey any order passed by the Final Fact Finding Authority (ATIR) while deciding appeals where the same issue has been contested by the same taxpayer, Butt added.

Copyright Business Recorder, 2023

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