Verification of IT refund claims: FTO asks FBR to take uniform approach

ISLAMABAD: Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to issue necessary instructions to field formations for adopting a uniform treatment in verification of claims of income tax refund.

In this regard, the FTO has directed the FBR to look into the discriminatory treatment of the income tax refund case vis-à-vis a case with 100% identical facts has been given altogether treatment.

The FTO’s instructions issued to the FBR on Tuesday revealed that the FBR should direct the concerned CCIR to look into the discriminatory treatment of the instant case vis-à-vis a case with 100% identical facts has been given altogether treatment.

The FBR should also direct the Commissioner-IR, Zone-Ill, RTO Lahore to revisit under section 122A the order under section 170(4) which is based on discriminatory treatment vis-à-vis order u/s 170(4) referred to above and settle the claim of refund, after providing opportunity of hearing and as per law.

The complaint was filed under section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) against delay in disposal of refund application for Tax Year 2021.

The complainant filed return of income for Tax Year 2022 u/s 114(1) of the Income Tax Ordinance, 2001 (the Ordinance), claiming refund amounting to Rs.1,564,9501. The refund accrued on account of excess tax deducted under Section 236j of the Ordinance. The Complainant e-filed refund application for Tax Year 2021 on 21.07.2023; however, the department failed to pass order under Section 170(4) of the Ordinance, within the stipulated time.

However, a very prominent aspect involving grave maladministration cropped up during hearing in the instant case.

The department verified the claimed amount under section 236A through ITMS only. However, the same claim under section 36A based on same computerised payment receipt (CPR) was denied in the instant complainant. It is clear case of arbitrariness and discriminatory treatment meted out to the complainant and falls clearly, within the ambit of maladministration in terms of section 2 (3) (ii) of the FTO Ordinance. It may further be added, that the maladministration pertains to time frame prior to filling of first appeal and second appeal as well and is not the subject mailer of appeal before the tribunal. This is grave and clear maladministration which cannot be left unattended.

Copyright Business Recorder, 2023