Unchallenged tax demand case: FTO waiting for tax officials’ response

ISLAMABAD: The Federal Tax Ombudsman (FTO) is waiting for the response of the Federal Board of Revenue (FBR), Chief Commissioners Corporate Tax Office and Regional Tax Office, Lahore to explain reasons for not taking measures to recover unchallenged multi-million tax demands from a China-based company for the tax years (2007-2012).

It is reliably learnt that despite the fact that summons have been issued by FTO against the FBR officers (Member Operations, CCIRs CTO & RTO, Lahore) for their long meaningful silence to recover unchallenged tax demand runs into Rs632 million, no one at FBR is ready to recover the lawful taxes out of a biggest tax fraud scam.

Non-recovery of tax demands from China-based co: FTO summons FBR officials to explain reasons

When contacted tax lawyer Waheed Shahzad Butt, who is pursuing this public interest move, told this correspondent that FBR flagship is simply trying to avoid action for some unknown reasons for not answering the simple questions (i) whether FBR/ CTO/ RTO has initiated any action or take measures to recover unchallenged income tax demands with default surcharge on the basis of orders passed u/s 122 (5A) read with China National Electric Wire and Cable Import and Export Corporation, Lahore Versus The Commissioner Inland Revenue, RTO, Lahore (2022 PTD 1839) for the Tax Years 2007, 2008, 2009, 2011 and 2012; (ii) whether the admitted/ confessed amount of income tax by the then CCIR vide her Letter No. 3290 dated 26.12.2019 (Ms Amina Hassan) has been communicated to the Government of the People’s Republic of China; (iii) whether there is any stay orders issued by any competent court (CIR-A, ATIR, LHC etc) that currently restrict or prohibit the department (CTO/ RTO Lahore) from initiating recovery proceedings on the basis of orders passed u/s 122(5A) read with China National Electric Wire Vs CIR (2022 PTD 1839). If so, please specify the details of the court order(s), including the court’s name, case number, date of issuance, and the nature of the stay order.

In this case, a Chinese company with principal activity of electrical installation, claimed huge refunds. After conducting a post-refund audit for the tax years 2007 to 2011, the I&I Lahore also issued an investigation report to the CCIR.

Why legal proceedings under section 182 and 205 of the Income Tax Ordinance 2001 have not been initiated by CRTO/ CTO/ RTO Lahore to recover the legitimate unchallenged tax demand, the complainant added.

Copyright Business Recorder, 2023