Law: Income Tax Ordinance, 2001

Section: 170,171

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)(ii)

Income Tax Ordinance (XLIX of 2001)---Ss. 170 & 171---Establishment of the Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)(ii)---Refund---Advertisement media---Manufacturing and supply of advertisement media like sign boards, billboards and hoardings---Refund arose on account of excess deduction of income tax at source on payments made for the manufacture and supply of said advertisement media like sign boards etc.---Department contended that refund application was liable to be rejected as the electricity tariff(A2) was for domestic use and did not bear out that the taxpayer was a manufacturer/ supplier of goods---Taxpayer explained that the process of preparing signboards, billboards and hoardings involved cutting, welding and shaping iron angles and preparing flex skin sheets for which an industrial electricity connection was not required; and expert workers were employed to cut, shape and frame the iron and flex sheets by hand; and where necessary, gas welding plant was used for which no electricity was required---Validity---Record indicated that the taxpayer was a manufacturer/supplier and tax deducted at source was required to be adjusted against tax liability due---Chief Commissioner reached a decision that the taxpayer was a manufacturer/supplier of advertisement media---Refund had been held up without any justification for more than three years---Delay in issuance of refund was tantamount to maladministration---Delay also created the right to receive compensation---Federal Tax Ombudsman recommended that Federal Board of Revenue to direct the Chief Commissioner to issue refund/compensation due, as per law, within 15 days. FINDINGS/RECOMMENDATIONS DR. MUHAMMAD SHOAIB SUDDLE, (FEDERAL TAX OMBUDSMAN).---This complaint is against non-issuance of refund. 2. The complainant claimed refund of Rs.157,884 in Tax Year 2007 vide application submitted on 8-4-2009. The refund arose on account of excess deduction of income tax at source on payments made for the manufacture and supply of advertisement media like sign boards, billboards and hoardings. Supporting documentation comprising tax deduction certificates and other record accompanied the…

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