Facilitation at business place: FTO directs FBR not to change jurisdiction of taxpayers

ISLAMABAD: The Federal Tax Ombudsman (FTO) Wednesday issued a landmark order on jurisdiction of taxpayers and directed the Federal Board of Revenue (FBR) to facilitate taxpayers at their doorsteps by taxing them at their place of business.

The FTO has further directed the FBR to reverse the jurisdiction order of a taxpayer, who tax jurisdiction was illegally transferred 450 kms away from the place of business from the tax office in Sukkur to Karachi.

The FTO’s order would facilitate many taxpayers whose tax jurisdictions were changed from their actual place of businesses, causing serious problems for the business community.

The FTO order ruled that for all practical purpose, the transfer of jurisdiction in the instant case of the complainant strictly speaking does not fall within the category of Builders & Developers. This transfer of jurisdiction from Sukkur to 450 kms away to Karachi has caused great hardship to the complainant and it is his genuine right to be taxed in the jurisdiction by facilitating him at the doorstep where his business is located and was being done.

The FTO’s order issued on Wednesday revealed that the transfer of jurisdiction 450 kms away from place of business from RTO Sukkur to MTO Karachi without considering the nature of total income from different heads of income tantamount to maladministration.

The FTO has further directed the FBR that the Board should direct the Secretary Jurisdiction to reconsider the change of jurisdiction of the complainant from Regional Tax Office (RTO) Sukkur to Medium Tax Office (MTO) Karachi.

Briefly, the complainant is an individual engaged in business as a rice dealer. The complainant also derives income as a member of AOP as developer/builder. All of a sudden, the jurisdiction of the complainant was changed from Regional Tax Office (RTO) Sukkur to MTO Karachi, ie; 450 kms away from his place of business. Hence, this complaint with the request to transfer jurisdiction from Medium Tax Office (MTO) Karachi to RTO Sukkur.

The FBR pleaded that Board’s recent jurisdiction order dated November 30, 2023 stated that the jurisdiction of all cases of Builders & Developers of RTO Hyderabad/Sukkur/Quetta was transferred to the Special Zone for Builders & Developers MTO Karachi. The act of the Board to transfer cases as the class of persons is not illegal and within the ambit of powers conferred by the Income Tax Ordinance 2001 (Ordinance).

Accordingly, in the instant case, the AOP Al-Mustafa Engineers, Contractor & Developer has correctly been transferred to MTO Karachi as per policy of the Board.

Copyright Business Recorder, 2023