Delaying refund claims: FTO concerned at ‘repeatedly thrashing the same issue out’

LAHORE: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah has expressed strong concerns over the repeated thrashing of the same issue to delay refund claims triggered by the taxpayer’s request and termed it a classic example of maladministration on the part of the tax department.

“It is a typical case of maladministration when the department has already discussed and thrashed out an issue, but still the same is being subjected to further queries leading to delaying the issuance of a refund,” he stressed.

According to details, the taxpayer is a private limited company deriving income from the manufacturing of other electrical equipment.

The department amended u/s 122(1) in the 2020 tax year by creating a refund of Rs 8,513,309. However, the department issued no refund even after a lapse of more than seven months.

The taxpayer approached the FTO, but the department maintained that the genuineness of the claim was yet to be verified. The department further mentioned having consulted customs data.

However, the FTO pointed out in his order that it is not understandable what other customs data is yet to be scrutinized by the department after the release of goods by the Customs after due diligence.

It is a typical case of maladministration that an issue has already been discussed and thrashed out. However, still the same is being subjected to further queries, leading to delaying the issuance of refund, the FTO stressed.

According to the FTO, The taxpayer was confronted by the department to provide documentary evidence concerning the addition of fixed assets. The taxpayer company had declared an addition of fixed assets in the income tax return for the tax year 2020.

The balance declared during the tax year was duly recorded in the fixed asset register. The addition was made through proper banking channels and can be traced through GDs and purchase invoices. A copy of GDs and purchase invoices were provided for consideration, which was also verified during the audit proceedings.

Finally, the FTO issued a clear directive to the concerned CIR Zone-IV, CTO, Lahore to promptly dispose of the taxpayer’s refund claim.

Copyright Business Recorder, 2024