2008 PLP 544 (PTD)

(ix) The complainant is an old man suffering from diabetes and heart problem on account of which he has abandoned his business. The warning in the recovery notice regarding issuance of warrant of arrest is nothing but harassment. It has been prayed that the complainant's grievances be redressed.

2. In the respondent's reply it is stated that the allegation of maladministration has to be properly examined and conclusively established before proceeding further in the matter. On facts it is stated as follows:-- (i) Assessments for the years 1998-99 to 2000-2001 were framed ex parte for non-compliance of statutory notices and on the basis of the Inspector's report dated 13-2-2001. (ii) Demand notice could not be served by the notice server as per his report dated 13-2-2001 to the effect that the complainant had left the business. (iii) The case was subsequently transferred to the DCIT, Circle 12, Mardan on the point of jurisdiction as the complainant had shifted from Charsadda to Mardan. (iv) The DCIT, Circle 12, Mardan issued the notice for recovery of arrears (which were communicated with the file). The complainant, however, refused to pay the arrears on the grounds that he had already closed the business. (v) During the relevant period the complainant was in business at Charsadda but no return for the assessment year 1999-2000 is available on record. (vi) The complainant was given due opportunity of being heard. (vii) The delay in the service of the assessment order and demand notice occurred because the complainant had shifted from Charsadda to Mardan and after he was located at Mardan, the demand notice etc. were served on him by registered post. (viii) The notice under section 138(1) of the Income Tax Ordinance, 2001 was in accordance with law and there was no question of any harassment. The complainant could have resorted to legal remedies if he was of the opinion that the demand was not payable by him. An ex parte assessment was made after enquiries through Circle Inspector, (ix) The complaint is beyond jurisdiction as remedy of appeal is available to the complainant. It has been prayed that the complaint may be dismissed.

3. The contentions of the two sides have been considered and the relevant records examined. It is seen that in the combined ex parte order for the years 1998-99 to 2000-2001 the complainant's income for the three years had been assessed at Rs.93,000, Rs.94,000 and Rs.95,000 respectively. The return for the year 1998-99 is available on file in which it had been stated that business had been abandoned w.e.f. 1-7-1998. The return for the assessment year 1999-2000 is also available on record according to which business had been abandoned due to illness. No return for the year 2000-2001 was admittedly filed but it is not understandable why the complainant's repeated intimation regarding discontinuance of business was totally ignored in the combined assessment order. It is also seen that in fact there was no service of any notice under section 61 of the repealed Income Tax Ordinance prior to the framing of the combined assessments. There is no order sheet entry regarding the issuance of any notice under section 61 prior to the ex parte assessment but an undated combined notice under section 61 for the three years, fixing the date of hearing for 13-2-2001 is available on record. At the back of this notice the notice server had reported that the complainant had left the business and a book-stall had been set up in its place. It was stated that the notice could, therefore, not be served. The date of the notice server's report was 12-2-2001 and on 13-2-2001 the assessing officer wrote the words "ITI, please report". On the same date, the inspector has given his report on the back of the notice which reads as under

"Sir, As per your direction I went to the shop to verify the N/ Server report. It has known to me that Mr. Sultan Ali prop: Sultan & Co has left the business for the 8/9 months. It is proposed that assessment in the case of Sultan & Co may be completed in view of history of the case and case of Student Book Stall brought on tax roll. (Sd. ) 13-2-2001" It is evident that it was merely stated in the Inspector's report that the complainant had left the business for the past 8/9 months and that the assessments be framed on the basis of the history of the case. There is no mention in the Inspector's report of any attempt at service by affixture. In any case, since the date of the Inspector's report is the same as the compliance date there could not have been any timely service, even by this mode. There is also no record whatsoever of any other service of a notice under section 61 during the time between the Inspector's report and the date of the combined assessment order, viz. 29-3-2001. The ex parte order for the three years without the service of a notice under section 61 is thus void and illegal. The matter falls within the definition of "maladministration" contained in section 2(3)(i)(a) and (b) of Ordinance XXXV of 2000 and the case thus falls within the jurisdiction' of this Office.

4. In the light of the above, it is recommended that: (i) The combined assessment order for the assessment years 1998-99 to 2000-2001 be cancelled under section 122A of the Income Tax Ordinance, 2001. (ii) Compliance be reported within 30 days. C.M.A./351/FTO Order accordingly.