2003 PLP 141 (PTD)

4. It is also alleged that the Authorised Representative of the complainant personally approached the concerned Authorities and requested them to dispose of the rectification application and issue the refund due to the complainant‑Company but all his attempt in this behalf failed.

5. It is also stated that on 16‑5‑2001 the R.C.I.T., Corporate Region, Karachi addressed a letter to the Commissioner of Income‑tax, Special Zone, Karachi calling for report on the complainant's application by 31‑5‑2001 but no compliance was made by his subordinate officers.

6. It is strongly alleged by the complainant that non‑disposal of rectification application has resulted in unlawful withholding of refund due to the complainant which is "unjust, perverse, unreasonable, biased and oppressive".

7. The case was fixed for hearing on 12‑3‑2002 but on the specific request of the Departmental Representative, the case was adjourned to 21‑3‑2002 as the parawise comments were not filed by the respondents. The representatives of the complainant as well as Department have appeared on 21‑3‑2002 and case has been discussed with them. The parawise comments have also been filed by the respondents.

8. The Departmental Representative has stated at the out set that the assessment records of the case relating to the assessment years 1992‑93 to 1996‑97 are not traceable and the file has been re‑constructed after obtaining photocopies of the various documents from the complainant's Authorised Representative. The parawise comments have also been prepared on the basis of copies of documents.

9. The respondents have stated in the parawise comments as under:‑‑‑ "Only photocopies of the Asstt. Order/Return are available in record. Assessment was completed on 20‑8‑1997. The assessment suffers from two mistakes, (i) Tax under section 80D is not levied, (ii) credit of taxes is not allowed. Rectification under section 156 is apparently barred by time." The observation that "rectification under section 156 is apparently barred by time" is absolutely misconceived and ill‑founded. Subsection (3) of section 156 of the Income Tax Ordinance provides as under:‑‑‑ "Where any such mistake is brought to the notice of any Income‑tax Authority by the assessee and no order under subsection (1) is made by such authority before the expiration of the financial year next following the date in which it was so brought to its notice, the mistake shall be deemed to‑have been rectified and all the provisions of this Ordinance shall have effect accordingly." Non‑disposal of rectification application filed under section 156 within the prescribed limit of time goes against the Department and the mistake pointed out in the application stands automatically rectified on the last day of limitation of time as prescribed in the aforesaid provision of law. The apathy and carelessness shown by the Assessing Officer holding jurisdiction over this case reflects extreme negligence and inefficiency on his part. The competent Authority must take notice of this gross irregularity.

10. It is extremely distressing and disappointing to note that the records of the case have been lost and the department is now at the mercy of the complainant in re‑constructing the file by obtaining copies of documents from its Authorised Representative.

11. It is vehemently contended by the complainant's Authorised Representative that by not allowing credit of the taxes already deducted under section 50(4) of the Income Tax Ordinance, 1979 the respondents have unlawfully withheld the refund due to the assessee. He has therefore, contended; that in addition to the refund due, additional payment under section 102 of the Income Tax Ordinance, 1979 may also be made to the complainant.

12. The Authorised Representative of the complainant has also referred to the C.B.R. Circular No.2 of 1998 and R.C.I.T's. Letter No.5893 dated 15‑6‑1998 whereby instructions were issued to the Assessing Officers to dispose of the rectification applications within one month of the receipt.

13. It is pertinent to point out that the C.B.R. has been issuing instructions every year for prompt disposal of rectification applications but the officers of the department do not take these directions seriously. The concerned Authorities must take cognizance of such violation by the Assessing Officers which result in' payment of compensation to the assessees at a very high mate.

14. The facts stated above establish without any shadow of doubt that this is a case of gross maladministration and needs immediate attention of the concerned Authorities to redress the grievances of the complainant.

15. In view of the above it is recommended: (a) The credit for deductions made under section 50(4) of the income Tax Ordinance be allowed after verification and after making adjustment of any outstanding demand, the resultant refund be issued within 30 days of the receipt of this order. (b) Appropriate disciplinary action be taken against the officers responsible for not passing order under section 156 of the Income Tax Ordinance within the prescribed time. (c) The responsibility of the officials for the loss of records be fixed and appropriate disciplinary action be taken against them. (d) The compliance of paras. (b) and (c) be made within 60 days of the receipt of this order and reported within a week thereafter. C.M.A./462/FTO Order accordingly.