FTO declares non-compliance of stay order as maladministration

LAHORE: The Federal Tax Ombudsman (FTO) has declared non-compliance of stay order by the tax assessment officer tantamount to maladministration.

According to details, the assessing officer of the tax department had attached taxpayer’s bank accounts almost two years after passage of the assessment order without serving any tax demand.

The taxpayer filed an appeal against demand generated by the tax department and the commissioner appeals stayed the recovery of demand in exercise of authority under the law. He observed that without ascertaining quantum of actual income offered to tax, the assessing officer could not allegedly any income on estimate basis.

He further observed that the tax officer was under a duty to identify any sources of income not declared by the taxpayer. Consequently, the assessment order was set aside and remanded the matter for a fresh assessment.

The taxpayer challenged the remand order before a tribunal, which set aside it, saying that it was not justified to remand the matter to the department. However, the tax department refused to abide by the stay order and did not detach bank accounts of taxpayer.

The taxpayer filed a complaint before the FTO who declared the non-compliance of stay order as maladministration.

The department filed an appeal before the President of Pakistan on the ground that the FTO has exceeded his authority by interfering with the matter of assessment of tax and interpretation of law. President of Pakistan set aside the FTO order and the matter ultimately landed to the higher appellate forum.

The higher appellate forum agreed with the FTO, observing that finding of the FTO was that failure or refusal of the relevant tax officials to honour and implement the stay order was perverse, arbitrary, unjust and oppressive and the conduct falls under maladministration.

Such recommendation fall within the powers of the FTO, therefore, the higher appellate forum set aside the decision of the President of Pakistan for not being in accordance with law and upheld the decision of the FTO, directing the FBR to ensure recommendations passed by the FTO.

Copyright Business Recorder, 2025