2008 PLP 689 (PTD)

Rs.7,605. (ii) Assessment year 2002-2003 Rs.11,

385. Total: Rs.18,

990. According for the complainant the assessment was completed under section 59(4) of the repealed Income Tax Ordinance, 1979 and refund become due on 30th June, 2002 and 30th June, 2003 respectively.

2. In response to the notice issued the Regional Commissioner submitted the reply in which it was stated that the returns for the assessment years 2001-2002, 2002-2003 were filed declaring net income of Rs.91,000 and Rs.109,800 respectively within the prescribed time. It was pleaded that the tax payable thereon was Rs.3,105 and Rs.3,775 whereas in the summary of the return tax paid under section 50(7D) was mentioned at Rs.10,710 and Rs.15,120 respectively. The assessment for the year, 2001-2002 and 2002-2003 were completed under sections 59(1) and 59(4) of the repealed Ordinance, 1979 respectively. Accordingly the Commissioner of Income Tax has directed the concerned officer to dispose of assessee's refund claim immediately.

3. The learned representative for the parties admit that refund voucher for Rs.18,990 was delivered to the complainant on 3-4-2004 but compensation has not been paid. Mr. Masood Aslam pointed out that rectification order was passed and refund was granted for Rs.18990 therefore, the compensation may not be paid. On examination of the record it was noted that the rectification order was passed by Mr. Safdar Hussain, Taxation Officer but it bears no date. A closer scrutiny also revealed that no order sheet has been maintained for proceedings taken for passing rectification order. The order sheet starts from the receipt of notice to the complainant sent to him by the Commissioner after the receipt of notice of the complaint. The order sheet does not show that any demand notice. was issued nor there is anything to establish that assessment order for the assessment year 2002-2003 was passed under section 59(4) as alleged by the respondent. Even order under section 59(1) alleged to have been passed in respect of assessment year 2001-2002 is also not available on the record. Even the order sheet does not speak about it. The learned counsel for the complainant has stated that neither notice of the rectification proceedings nor the rectification order were served on him. Tine learned representative for the department contended that as no order adverse to the complainant was passed in rectification proceedings it was necessary to serve a notice but the fact remains that even rectification order has not been served. From the facts and examination of the record it is clear that there is no proof of passing order under sections 59(1) and 59(4) as alleged in reply. If the very order was not available and had not been passed there was no need for rectification of the proceedings. The entire proceeding seems to be mala fide and made up for the purpose of denying the claim for compensation. Such irregular and mala fide act on the part of Government official by manipulating the record is disapproved.

4. From the facts stated it is quite obvious that the plea of rectification which was not pleaded in the reply seems to have been made with ulterior motive after reply had been sent. The so-called rectification order shows that it has accepted what had been declared by the complainant. The complainant had claimed the refund of Rs.18990 and the same amount has been mentioned in the so-called rectification order and the refund voucher has already been issued to the effect. In these circumstances there was no need for drawing rectification proceeding. This clearly establishes that the (sic) denying the claim for compensation. This is a serious irregularity and illegality by Mr. Safdar Hussain, Taxation Officer which requires strict action in the matter because such step taken by such tax officials shatter the confidence of the taxpayers and encourages irregularity, inefficiency and corruption.

5. It has been pointed out that in respect of assessment year 2002-2003 short document notice was issued on 28-11-2002 which was complied on 3-12-2002, thus compliance was made within the prescribed period of 15 days which was accepted and therefore the assessment shall be deemed to have been made on 30-6-2003. The compensation should therefore be calculated from 1st October, 2003 in the manner prescribed by section 171 of the Income Tax Ordinance, 2001. Maladministration is established.

6. From the above discussion it is clear that the claim for compensation is justified and it recommended that:-- (i) Compensation in respect of assessment year 2001-2002 from 1-10-2002 and in respect of assessment year 2002-2003 from 1-10-2003 be paid as provided by section 171 of the Income Tax Ordinance, 2001. (ii) Disciplinary action should be initiated by the Member (Inquiries) against Mr. Safdar Hussain, Taxation Officer for irregularities' and non maintenance of proper record. (iii) Compliance report in respect of (i) be submitted within 30 days in respect of (ii) within 60 days. M.I./289/FTO Order accordingly.