Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)(i)(a), 10(4), 9(1)

    JUDGMENT/ORDER/FINDINGS/RECOMMENDATIONS     This significant decision by the Federal Tax Ombudsman (FTO), M. Zafar-ul-Haq Hijazi, uncovers a systemic scam involving the issuance of "Fake NTNs" (National Tax Numbers) through the manual bypass of the Federal Board of Revenue's (FBR) automated systems. The judgment (2026 PTD 531) highlights how internal tax officials exploited system loopholes to facilitate tax evasion, particularly in real estate transactions. 1. The Core Complaint: Bypassing Digital Reforms A tax practitioner filed a complaint alleging that while the FBR had made it mandatory for new registrations to be verified via a CNIC-linked mobile SIM, certain individuals were bypassing this. The "Manual" Loophole: Registration forms (Form 181) were showing the "Medium" of registration as "Manual" rather than "Online." Corruption: It was reported that agents were charging thousands of rupees to create these NTNs through internal FBR/PRAL back-office access without any SIM verification. 2. Key Investigative Findings The FTO refused to let the case drop even when the complainant tried to withdraw it, citing the high risk to national revenue. The investigation revealed: Multan Sample Case: Out of a sample of 65 manually registered cases in RTO Multan, 51 were registered using IDs of Multan officials, while 14 used IDs from other regions. Violation of SOPs: These registrations ignored the FBR's Standard Operating Procedure (SOP) which mandates linking a SIM card to the registration. Revenue Leakage: Most of these "manual filers" were created specifically to avail reduced withholding tax rates on the registration of immovable property (real estate). Identity Theft/Misuse: Many of these "taxpayers" actually had SIMs in their name, proving that the "Manual" path was chosen not out of necessity, but to circumvent scrutiny. 3. Legal Determination: Maladministration The FTO ruled that this practice constituted Maladministration under Section 2(3)(i) of the Federal Tax Ombudsman Ordinance, 2000. Definition: A departure from established practice or procedure…