Law: Income Tax Ordinance, 1979

Section: 62

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)

Income Tax Ordinance (XXXI of 1979)---S.62---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Assessment on production of accounts, evidence etc.---Estimation of sales---Capital declared for use in business was Rs.60,000 including furniture and fixtures---Sales had been estimated at Rs.12 lacs without any inquiry or verification and without issuing a show-cause notice confronting assessee with the basis on which sales were so estimated and the income assessed---Validity---Sales had been estimated at Rs.12 lacs (i) without any basis (ii) without bringing any material evidence on record (iii) without confronting assessee with, the proposed figure and (iv) without regard to the case history--Estimation of sales at 20 times of the working capital (Rs.60,000) was, on the very face of it, without valid reason, if not outright mala fide--Assessment order passed was bald inasmuch as it lacked the basis on which sales were estimated and income worked out which demonstrated incompetence, inefficiency and inaptitude in the discharge of duties and responsibilities---Order suffered from serious maladministration---Federal Tax Ombudsman recommended that the Commissioner, by resort to S.122A of the Income Tax Ordinance, 2001, recall assessment order, dated 13-1-2003 for de novo consideration and detailed examination for passing a fresh speaking order on merits in accordance with law. DECISION/FINDINGS JUSTICE (RETD.) SALEEM AKHTAR (FEDERAL TAX OMBUDSMAN)---This complaint alleges maladministration and arbitrary conduct in the framing of assessment on 13-1-2003 for the years 2000-2001. 2. The facts, as explained in the complaint, are that the complainant's husband used to operate a small retail merchandise shop in a small section of his house, which was closed following, his demise. Tax authorities have assessed the payable tax at Rs.9,250 without considering the financial condition of the complainant and without conducting any inquiry to ascertain whether or not the shop in question was operating. It is prayed that the demand notice for Rs.9,250 issued under section 85 of the Income Tax Ordinance, 1979 in consequence of assessment be declared…

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