Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)(1)(a)(b)(ii),10(4)

Law: Income Tax Ordinance, 2001

Section: 114,120,122(5A),122(9),164(2),170(1),170 (3),170(4),221221(4)

Sections: 2(3)(1)(a)(b) , (ii) , 10(4) - Federal Ombudsman Institutional Reforms Act, 2013, Section: 9(1) - Income Tax Ordinance, 2001, Sections: 114, 120, 122(5A), 122(9), 164(2), 170(1), 170(3), 170(4), 221 , 221(4) - Claims of refund adjustment of previous tax years - Rejection without proper desk audit - Use of short cut methods of rejecting claims by the officers - Show Cause Notices and disallowing claims - Causing of harassment - Maladministration - Own motion investigation by the F.T.O in exercise of jurisdiction u/s 9(1) of the Ordinance - FACTS A taxpayer files income tax returns every year and may adjust tax liability against refunds of previous years. For this purpose, a separate TAB has been provided in return of income available in IRIS. FBR vide letter # 6(43)Rev.Bud/2021/116078-R dated 10.05.2022 provided data of 393,441 refund claims of individuals/AOP who have adjusted refund claims worth Rs. 24 billion against admitted tax liability of tax years 2016-2021 and asked CCIRs of LTOs/MTO/CTOs/RTOs to conduct desk audit in these cases to ascertain genuineness of refund adjustment. However, no policy guideline was provided to field formations for further action to recover the bogus refund claims. Due to absence of any uniform policy guidelines, the Officers in field formations are not using any uniform legal methods for processing of these claims , their subsequent adjustments against admitted tax liability. Instances have been brought to notice that instead of conducting detailed desk audit of returns , verifying the tax payments from ITMS/IRIS/veri tax/FBR Maloomat (Asset Inquiry) and finally confronting specifically only unverified tax deductions/payments; the Officers are using short cut methods of rejecting claim of refund adjustments, causing harassment and ultimate prolonged litigation. ARGUMENTS LTO Karachi, MTO Karachi , CTO Karachi submitted comments vide letters dated 24.06.2022 which have been analyzed and common points are discussed in brief. Preliminary objection regarding bar of jurisdiction has been raised as it is contended that the matter pertains to assessment of income , tax liability for which legal remedy is available. On…

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