While disposing of a complaint, Tax Ombudsman has directed FBR to reexamine the duplicate illegal assessment orders for the tax year 2016 , 2017 & 2020 which were issued in violation of FBR circular dated 30.06.2015 which states that no notice under Income Tax Ordinance 2001 to be issued to taxpayers w.e.f. 01.07.2015 without a system generated Bar Code. Brief facts of the complaint were that, Complainant was an individual engaged in the business of running a rice husking mill. The Inland Revenue Officer, RTO Hyderabad carried out withholding audit for Tax Years 2016, 2017 & 2020 and issued manual orders. Thereafter, the department (Deptt) issued show cause notice for withholding audit for the above-mentioned years again. However, the monitoring of withholding audit for these years was already conducted by previous Officer. But without examining the facts, the Unit Officer issued bar coded assessment orders for Tax Year 2016 and for Tax Years 2017 & 2018 through IRIS creating tax liability of Rs.35,746,758, Rs.19,517,692 and Rs.29,405,862 respectively. The complainant filed rectification application under Section 221 as well as revision application under Section 122A of the ordinance but failed to get any response. Therefore the matter took up with the Federal Tax Ombudsman .FTO observed that manual assessment orders under Section 161/205 of the Ordinance for Tax Years 2016, 2017 & 2020 were issued on 25.12.2017, 17.08.2018 & 18.08.2020 respectively. Those manual orders contained fake DCR numbers, which could not be verified from the relevant Demand and Collection Register of the Unit. Even the paltry tax demand created in this dubious way had not been carried forward in subsequent year for recovery action, resulting in loss of legitimate Govt revenue. Apparently, those manual needs review and if found erroneous in so far these are prejudicial to the interest of revenue, the Deptt may invoke Section 161(3) of the Ordinance against these manual orders which states: “(3) The Commissioner may, after making, or causing to be made, such enquiries as he deems necessa,y, amend or further amend an order of recovery under sub-section (1), if he considers that the order is erroneous in so far it is prejudicial to the interest of revenue: Provided that the order recovery shall not be amended, unless the person referred to in sub-section (1) has been provided an opportunity of being heard." FTO’s order further stated that : “The instant case reflecting dubious manual orders may be a tip of the iceberg hence a thorough investigation is required to unearth the loss of legitimate of Govt. revenue through issuance of manual orders having fake DCR numbers since Board's direction dated 30.06.2015”.Such orders are contrary to law ,rules or regulations : hence ,unlawful per se attracting “maladministration” under section 2 (3) (i) (a) & (ii) of FTO ordinance. Accordingly, FTO has directed FBR to conduct a fact-finding inquiry into passing unverifiable orders, in violation of Board's direction dated 30.06.2015 and causing loss of revenue in order to initiate disciplinary proceedings under E&D rules and to report compliance within 45 days.
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