2003 PLP 2302 (PTD)

3. The respondent has forwarded R-CIT, Multan parawise comments, dated 25-9-2002 which deny `maladminsitration' and support the view that the Special Officer was free from the blame as respects the removal of documents from the file.

4. The learned counsel explained that notice under section 13 proposing an addition of Rs.1,548,400 by estimating value of house at Rs.1,898,400, against the declared Rs.3,50,000 said to have been issued on 18-9-2001 was never served on the Complainant. When this fact was intimated to the Assessing Officer on 19-9-2001, a second notice was served on 18-9-2001 containing reference to the earlier notice. It was then explained that construction was made after obtaining, the prescribed permission from the Government 'Department where the complainant was serving and the authorities felt satisfied that legitimate earnings were available for the construction of the property. Later, loan from HBFC was secured, also from friends, of which evidence was tendered with the explanation. It also was pointed out to the Assessing Officer that the proposed estimates of the value of 10 Marlas plot and 4,121 Sq. Ft. of the construction were both unrealistic and much excessive. Considering these aspects, the Assessing Officer issued a second notice under section 13(2) on 17-4-2002 proposing to value the plot and construction separately which aggregated at Rs.924,

200. A detailed reply was again submitted on 24-9-2002, which is not available on record, but Peon Book was shown to prove its delivery in the concerned Circle. According to the learned counsel, Inspector was once. again directed to 'conduct on-the spot enquiry whereupon he proposed the value at Rs.400, 000 but this report has since been maliciously removed from record by Mr. Masood, who had in the meantime replaced Mr. M. Abid Raza Bodla as Assessing Officer. It was emphasised that the complainant was being harassed at the behest of the `informer' who has close contacts with the functionaries of the Department specially the Special Officer, Mr. Masood who had all along been keeping track of the, proceedings even before his posting in .the Circle.

5. During investigation, Mr. Anwar-ur-Haq (UDC) acknowledged having received the- reply, dated 29-9-2002 from the Complainant, and owned his signature on the Peon Book. He admitted that the document was then passed on to the Peshi Clerk to place it on record. Mr. Saeed Ahmad; the ITI, initially admitted of having conducted an enquiry after complainant's reply, dated 29-4-2002, yet denied having submitted any report because he` had not been given any written instructions for conducting the enquiry. Surprisingly, the affidavit (submitted soon after the hearing) he totally denied having conducted any enquiry. Thus he has retracted from his earlier verbal evidence at the hearing. Mr. Muhammad Masood, the Assessing Officer, rejected the allegation of having removed from record the explanation filed by the complainant on 29-6-2002 as also Inspector's report proposing value at Rs.400,

000. He further denied contacts with the `informer'.

6. As it is, the investigation reveals following, discrepancies which fall under the definition of "maladministration" as per clause (3) of section 2 of the Establishment of the Office of Federal Tax Ombudsman Ordinance:-- (i) the house was constructed as far back as 1989 which construction cost was nor as high as at the time or enquiries in 2001 and 2002. Moreover; size of the plot suggests that for residential- purpose not much investments could be needed; (ii) ignoring this aspect the valuation on 18-9-2001 was proposed at Rs.1,898,400 which in the second notice, dated 17--1-2002 was curtailed to almost half at Rs.92,4,200; (iii) the assessment finally framed on 9-6-2002 makes no reference to the second proposal and blindly adopted the initially proposed value, to make an addition of Rs.1,548,400 under section 13; (iv) the initial admission by the Inspector about having conducted an enquiry but not submitting the report, has been retracted in the affidavit. This is clearly indicative of the attempt to cover up the removal of his report proposing valuation at Rs.400,

000. The above glaring contradictions expose the concerned functionaries i.e. Special Officer (Mr. Muhammad Masood) the Inspector (Mr. Tahir), to an unflattering situation. Circumstantial evidence strongly suggests that a Government officer had managed to construct a modest property after obtaining loan from HBFC for which departmental permission was duly obtained after explaining the financial resources. In utter disregard of this plausible and acceptable explanation, a heavy assessment was framed creating a demand which obviously is much beyond the capacity of the complainant to pay. The, involvement of the two officials, the Special Officer and the Inspector, calls for a serious note because if the Departmental functionaries become a party to private dispute and offer a helping hand to either party not only bogus irrecoverable demand would be created but the Department's reputation would badly suffer.

8. It is, therefore, recommended that:-- (1) The Commissioner amend the assessment exercising powers under section 122 of the Income Tax Ordinance, 2001 so as to "levy the correct amount of tax". (2) Enquiries be conducted to determine responsibility for not placing on the file documents such as (a) explanation on 24-9-2002 which admittedly received by the concerned official and passed on to the Record Keeper, and (b) the Inspector report. (3) Appropriate action against the concerned officials be taken under disciplinary rules. When conducting the disciplinary action the Inspector Mr. Tahir be specifically asked to explain the reason for his' retracting the statement made at the time of hearing of the complaint.

9. Compliance be reported within 30 days on the receipt of this order. C.M.A./797/FTO Order accordingly.