Public interest complaint

Complainant contended that for corporate tax payers deriving income by providing/rendering services chargeable under Ss. 153(1)(b) & 153(6) of the Income Tax Ordinance, 2001, the electronic Income Tax Return (IT-1) for Tax year 2010 placed on the Federal Board of Revenue (FBR) web portal gave misleading information to taxpayers and tax payable by them was not being correctly computed; that the electronic Income Tax Return understated a taxpayer's due income tax liability for the tax year 2010 and was not designed to take into account receipts/income liable to tax under normal tax regime, besides the income taxable under the minimum tax regime

Validity

Defectively designed electronic return for corporate taxpayers (service sector) showed incompetence, inefficiency and inaptitude on the part of the concerned officials and was tantamount to systematic mal-administration under S. 2(3)(ii) of the Federal Tax Ombudsman Ordinance, 2001

Federal Tax Ombudsman recommended that the Federal Board of Revenue to ensure that in the future a fool-proof electronic Return was placed on the Federal Board Revenue's official web portal; to direct field formations to determine revenue losses that occurred due to defective e-Return, and to take steps to retrieve the loss, without charging any penalty or default surcharge to the concerned taxpayers.