Law: Income Tax Ordinance, 2001

Section: 15,68,74,132,155,169,170,171,132(5),155( 1)(2),169(1),170(4),171(1),68(2)

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2,9,10,2(3)

Income Tax Ordinance (XLIX of 2001)--Ss. 15, 68(2), 74, 132(5), 155(1)(2), 169(1), 170(4) & 171(1)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.2(3), 9 & 10---Denial of refund claim---Rental income---Representative of complainant had stated that refund applications were filed with returns of 3 years, but no response was made by department, which amounted to maladministration under S.2(3) of Establishment of Federal Tax Ombudsman Ordinance, 2000; that neither refund was issued nor any order under S.170(4) of Income Tax Ordinance, 2001 was passed by the department within prescribed time and prayed that department be directed to issue refund with compensation---Contention of representative of the complainant that tax chargeable on property income was required to be paid for one financial year and advance tax deducted for succeeding years created the complainant's right to compensation, appeared to carry weight---Depriving taxpayer of his money, before it was due, would entitle him to compensation---Natural justice demanded that S.171(1) of the Income Tax Ordinance, 2001, which permitted payment of compensation at prescribed rate on delayed payment of refund, be equally applied on tax deducted in advance---Department's failure to rectify assessment on the basis of appellate decisions for two assessment years, displayed gross negligence in terms of S.2(3) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000---Recommendations were made to Federal Board of Revenue to pay, as per law, interest/compensation on advance tax, deducted on rental income for tax years 2006 to 2008; to direct the Chief Commissioner to rectify the assessments for assessment years 1994-95 and 2000-01 and issue refund/compensation due as per law, within 21 days and to report compliance within 30 days. THIS FINDING DECISION BY DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN.---The complainant agitates at non-issuance of refund of Rs.3,848,837 for tax years 2006 to 2008. According to the AR, refund applications were filed with returns on 26-04-2007, 27-9-2007 and 13-9-2008 for the three years respectively, but no response was made by the…

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