Law: Income Tax Ordinance, 2001

Section: 122,122(4)

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)

(a) Income Tax Ordinance (XLIX of 2001)---S.122(4)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Audit of return not formally selected by competent authority---Effect---Such audit being contrary to law would tantamount to maladministration. (b) Income Tax Ordinance (XLIX of 2001)--- ----S.122(4)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Audit of return, finalization of---Protracted delay---Effect---Such delay would tantamount to maladministration. FINDINGS/RECOMMENDATIONS DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN.---This complaint is against illegal assessment under section 122(4) of the Income Tax Ordinance, 2001 (the Ordinance). 2. The complainant's income tax Return for Tax Year 2007 was selected for audit by the Commissioner IR, Audit Division, RTO, Sialkot, vide Letter No.1223 dated 27-6-2008. The complainant revised the Return for Tax Year 2007 twice. However, the Assessing Officer continued with the original audit proceedings, as if no revision of Return had taken place. The audit was concluded on 28-6-2012, after a lapse of 4 odd years. The complainant's Total Income for Tax Year 2007 was determined at Rs.3,657,737 as against declared Rs.272,513 and an additional tax liability of Rs.914,434 was raised. 3. The complainant assails the treatment accorded by the Deptt. as harsh, illegal, oppressive and whimsical. He takes strong exception to the conduct of audit with reference to the original Return, ignoring the revised Returns. He says that when the revised Returns were admitted by the Deptt. and taken on record, for the audit proceedings to continue legally a fresh audit selection order was required to be made after each revision. The complainant has also pointed out that stay against arbitrary selection of his Return was granted by the LHC but the Deptt. continued the audit proceedings after expiry of six months on the ground that this being a revenue matter stay could continue only for a six-month period. 4. The complainant further draws attention to the fact that the Deptt. having accepted declared turnover and gross profit as per the second revised Return was…

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