Law: Income Tax Ordinance, 2001

Section: 120,171,235,PartVI oftheFirst Schedule

Income Tax Ordinance (XLIX of 2001)-- -Ss. 120, 171 & 235---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss. 2(3) & 10-Non-payment of refund amount-Complaint had been filed under S.10(l) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 against non-payment of refund of tax withheld under S.235 of Income Tax Ordinance, 2001-Complainani provided evidence in support of refund application, but neither any deficiency/discrepancy was brought to the notice of the complainant, nor verification completed in accordance with procedure-Resultantly the claim of the complainant remained unsettled-Departmental representative submitted that verification was under process and the refund due would be issued as soon as the same was complete-Representative, could not justify as to why the deficiencies, if any were not communicated to the complainant, immediately after the filing of returns/refund application by the complainant-Ombudsman observed that tax verification process should be completed expeditiously, so that refund was issued within prescribed time to avoid payment of compensation-Department had not followed the procedure laid down by Federal Board of Revenue- Department could not withhold refund, unless some substantial flaw was proved in the claim of the complainant about its genuineness or accuracy-No substantial flaw having been identified by the department, withholding of refund due, as per law, without cogent reason was unjust-Delay also created complainant's right to claim compensation under S.171 of the Income Tax Ordinance, 2001- Department's neglect, inattention/inefficiency and inordinate delay in processing of refund, was tantamount to 'maladministration ' in terms of S.2(3)(ii) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000-Federal Board of Revenue was recommended by Ombudsman to direct the Commissioner to ensure completion of verification process at the earliest and dispose of refund/ compensation within 30 days; and report compliance within 7 days thereafter. Commissioner IR v. Chicago Metal Works Tax Reference No.48 of 2011; 2015 PTD 6191; Complaint No. 350/2007 vide Order…

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