2016 PLP 1797 (PTD)

Bilal Ahmad, DCIR Departmental Representative. FINDINGS/RECOMMENDATIONS ABDUR RAUF CHAUDHRY, FEDERAL TAX OMBUDSMAN.

The Complainant, an AOP dealing in manufacturing and supply of parts to Messrs Millat Tractors, is aggrieved at not giving effect to the appellate orders dated 26.06.2011 of Commissioner Inland Revenue (Appeals) [CIR(A)] and Appellate Tribunal Inland Revenue (ATIR) for the years 2007, 2008 and 2009, and as a consequence non issuance of refunds as per law. The Deptt issued a sizable portion of the refunds due (Rs.2,656,743 out of total Rs.3,418,326), but withheld some amounts on account of alleged non payment of Workers Welfare Fund (WWF) However, no separate and detailed orders were passed for the amounts of refund not paid back to the taxpayer.

2. The Complainant filed appeals for the three years before CIR(A) who set aside the orders. Department's appeal to ATIR was dismissed. According to the AR, the Deptt, did not allow effect to the decisions of the appellate courts which it was bound under law to do. Consequently it has not issued the entire amount of the refund due and illegally withheld part thereof, particularly pertaining to WWF, thus violating provisions of Section 124(4) of the Income Tax Ordinance, 2001 (the Ordinance), which tentamounted to maladministration. He prayed that revenue authorities be directed to issue refund without further delay.

3. Both the parties have been heard and available record examined. The basic reason for which the CIR (Appeals) had set aside the order was that no separate order had been passed for charging WWF. The appeal of the Deptt. against order of the CIR (Appeals)was dismissed by ATIR. No further appeal has been filed by the Deptt at the higher Appellate fora. DR claimed that appeals on this issue had been filed in other cases and many such appeals were presently pending before the Hon'ble Supreme Court of Pakistan. This, however, does not per se authorize the Deptt not to allow appellate effect under Section 124(4) of the Ordinance in this case or to withhold the due refund. CIR(A) and Tribunal's orders are dated 26.11.2011 and 28.03.2012 respectively and no orders in pursuance thereof have been passed till now nor the matter was agitated before the higher courts. Department has no valid reason for such inordinate delay in settling refund claim. Findings:

4. Inordinate delay to issue refund is established on the part of Deptt which is tantamount to maladministration under section 2(3) of the Federal Tax Ombudsman Ordinance, 2000. Recommendations:

5. FBR direct the Commissioner to- (i) pass an order giving effect to the appellate order and issue the due amount of refund, as per law, within 21 days; and (ii) report compliance within 07 days thereafter. RR/1/FTO Order accordingly.