2003 PLP 1647 (PTD)

8. It has also been admitted that out of total returns filed for the assessment year 2001-2002, 43% were on TR (trial) number.

9. Thus error of following categories occurred:-- (I) An error of manual omissions or commissions in each list e.g. a return not qualifying under SAS marked `Y' and vice versa. (II) Selected cases of AOP,RF, URF and companies with substituted temporary NTN having prefix `Z'. (III) In certain other cases name of individual signatory of return who wrote his NIC number in the return of AOP, RF, URF or company is picked against NTN of such artificial juridical persons. (IV) Manually allotted temporary number with prefix `Z' were replaced with, computer assigned nation-wide numbers. (V) All TR numbers were also replaced with nation-wide 'Z' numbers. (VI) Where by any reason manually allotted NTN were not entered in computer a new number was assigned by computer. (VII) Where no NTN was mentioned on the return and no NTN was assigned to such assessee by the computer in the year 2000 or later, a `Z' number was assigned by computer. (VIII) The case, where return, is picked by NTN without the name of assessee. (PRAL has admitted that it is programming discrepancy. However, in most of the cases discrepancy has been `duly addressed by the Department.)

10. Return actually selected by computer random ballot in all the cases can be traced back and identified through the computer software itself. The Representatives of PRAL therefore, submitted that the discrepancy does not indicate any mala fide vitiating the selection. However, it was submitted on behalf of the complainants that the substitution of their actual NTNs with temporary NTNs having prefix `Z' was totally uncalled for and it was caused purely due to incompetence of programmers as well as monitoring officers of the Department. They contended that their returns would not have been picked in ballot had their original NTNs not been changed.

11. Submissions made on behalf of the two sides are considered. The reply of RCIT is found tactually correct to the extent that no mala fide NTN specific or name specific feature is found in the programme. Allotment of NTN with prefix `Z' to returns of AOP, RF/URF due to mistake in matching NIC numbers of member/partner with NTN of AOP/RF/URF is found unwarranted and the proposition that the returns of complainants would not have been picked in ballot had their NTN not been changed validly raises the question of benefit of doubt. It is a settled principle of law that where two interpretations/ eventualities are possible the one beneficial to the assessee should be adopted. Selection of returns for audit in complainant's cases, accordingly, falls under the definition of maladministration. It is recommended. (i) The C.B.R. directs exclusion of return from, the list of cases selected under para 9(a)(i) for audit and for its acceptance under Self-Assessment Scheme. (ii) Compliance be reported within thirty days of their order.

12. Besides, the aforementioned discrepancies found in the allocation of NTN through computer programme overlooking such discrepancies in designing the ballot software by PRAL and failure of concerned tax employees to check such programmes and monitor the operations thereof fall in the category of maladministration warranting remedial action.

13. It is further recommended:-- (i) That C.B.R. to put nationwide networking of their computerized operations on top priority. (ii) That Officers well-versed with laws, rules, regulations, procedures be designated for briefing the software designers/programmers and for evaluating the software deigned (iii) That resource persons/agencies, where a project is to be out sourced, to be selected with utmost care and thereafter their performance be diligently monitored by competent tax employees. C.M.A./L-684/FTO Order accordingly.