2003 PLP 2162 (PTD)
Messrs NATIONAL SECURITY INSURANCE CO., LAHORE Versus SECRETARY, REVENUE DIVISION, ISLAMABAD
| Citation | 2003 PLP 2162 (PTD) |
| Forum / Court | Federal Tax Ombudsman |
| Bench Members | Justice (Retd.) Saleem Akhtar, Federal Tax Ombudsman |
| Parties | Messrs NATIONAL SECURITY INSURANCE CO., LAHORE Versus SECRETARY, REVENUE DIVISION, ISLAMABAD |
| Primary Law | Income Tax Ordinance (XXXI of 1979) |
Q1: What are the key laws and sections cited in 2003 PLP 2162 (PTD)?
This judgment primarily cites: Income Tax Ordinance (XXXI of 1979) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2003 PLP 2162 (PTD)?
The case was heard and decided by the Federal Tax Ombudsman bench comprising: Justice (Retd.) Saleem Akhtar, Federal Tax Ombudsman.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2003 PLP 2162 (PTD) (Messrs NATIONAL SECURITY INSURANCE CO., LAHORE Versus SECRETARY, REVENUE DIVISION, ISLAMABAD). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- Muhammad Arshad, D-CIT for Respondent.
Headnotes / Summary
Ss. 102, 103 & 100
Income Tax Ordinance (XLIX of 2001), S.171
Compensation for delayed refund, non-payment of-- Department was willing to issue refund but the complainant/assessee was guilty of concealment inasmuch as despite maintaining accounts on "accrual basis"; the income becoming 'receivable' on account of compensation under S.102 of the Income Tax Ordinance, 1979 was never declared in the relevant returns and adjustment would be possible after determination of tax on that income
Department was guilty of withholding validly due compensation which, in all fairness, should have been issued alongwith the aggregated refund
Issue whether the amount of compensation as a 'receipt' would be taxable in the hands of the complainant/assessee, was a different and independent matter-- Aspects such as the suspension of operation and the complainant/ assessee having heavy accumulated losses with lack of funds to liquidate the anticipated tax liability should have been considered at the time of issuing the principal amount of refund which could be validly withheld under S.103 of the Income Tax Ordinance, 1979 if reasonable grounds existed
Compensation under S.102 was a corollary of refund and unavoidable in terms of S.171 of the Income Tax Ordinance, 2001 as it was under S.100 of the Income Tax Ordinance, 1979
Postponing issuance of compensation on the pretext of adjusting it against a possible tax demand was clearly an afterthought to cover up an act of omission falling in the realm of 'mal administration'
Federal Tax Ombudsman recommended that additional payment for delayed refund as admitted to be due be promptly worked out as per S. 171 of the Income Tax Ordinance, 2001 and issued and those responsible for delay in issuance of refund for over 5 to 15 years be identified and admonished for burdening the Exchequer with cost for delay. Shaukat Amin Shah, FCA for the Complainant.
Judgment & Decree
526,783 10-3-1981 to 30-6-1986 1-7-1986 to 20-12-2001 335,337 1,222,299 1977-78 & 1978-79 890,759 5-11-1980 to 30-6-1986 1-7-1986 to 20-12-2001 604,426 2,066,835 Assessment Years 1977-78 & 1978-79 Rs.2,671,257 Assessment year 1979-80 1,557,636 Assessment Years 1982-83 to 1984-85 11,262 Total Rs.4,240,155
5. The representative of the Revenue on his turn insisted that the Department was willing to issue refund but the complainant was guilty of concealment inasmuch as despite maintaining accounts on "accrual basis", the income becoming 'receivable' on account of compensation under section 102 was never declared in the relevant Returns and therefore, adjustment would be possible after the determination of tax on that income.
6. A scrutiny of record in the light of arguments by the two representatives is indicative that the Department is guilty of withholding validly due compensation which, in all fairness, should have been issued alongwith the aggregated refund on 20-5-2002. The issue whether the amount of compensation as a 'receipt' would be taxable in the hand of the complainant, is a different and independent matter. The aspects such as the suspension of operations and the complainant having heavy accumulated losses with lack of funds to liquidate the anticipated tax liability should have been considered at the time of issuing the principal amount of refund which could be validly withheld under section 103 reasonable grounds existed. The compensation under section 102 is a corollary of refund and unavoidable in terms of section 171 of the Ordinance as it was under section 100 of the repealed Ordinance. Therefore, postponing issuance of compensation on the pretext of adjusting it against a possible tax demand is clearly an afterthought to cover up an act of omission falling in the realm of 'mal administration'. It is, therefore, recommended that:-- (i) Additional payment for delayed refund as admitted to be due be promptly worked out as per section 171 of the Income Tax Ordinance, 2001 and issued. (ii) Those responsible for delay in issuance of refund for over 5 to 15 years be identified and admonished for burdening the Exchequer with cost for delay.
7. Compliance be reported within 30 days of the receipt of this Order. C.M.A./817/FTO Order accordingly.