Law: Income Tax Ordinance, 1979

Section: 12,12(18),25(c),63,156,129

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3),9

(a) Income Tax Ordinance (XXXI of 1979)---Ss. 12(18),25(c) & 63---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Addition---Amounts subsequently recovered in respect of deductions, etc.---Assessment was finalized ex parte--Loss was ignored and addition was made under S.25(c) of the Income Tax Ordinance, 1979 on the ground 'that complainant/assessee did not undertake any business during the year and failed to produce the documents and books to support his claim for loss--Validity---Examination of assessment order and related document revealed that the Assessing Officer did not give any reason whatsoever for ignoring the declared loss---Addition was not discussed at all---Best assessment places a heavy responsibility on the officer passing it---No arbitrary addition could be made under such an assessment---Both the actions of Assessing Officer in ignoring the declared loss and making addition were found to be arbitrary. (b) Income Tax Ordinance (XXXI of 1979)--- ----Ss.25(c), 12(18), 63 & 156---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Amounts subsequently recovered in respect of deductions, etc.---Addition was made on the ground that complainant/assessee did not raise any objection to the proposed treatment and notice issued under S.61 of the Income Tax Ordinance, 1979 remained uncompiled---Complainant/assessee claimed that liabilities were not trading liabilities, but loans---If at all, they could be considered under the provisions of S.12(18) of the Income Tax Ordinance, 1979---Most of the loans were carried over from the preceding years---Validity---Documents transpired that the claim of the complainant/assessee was correct and addition made under S.25(c) of the Income Tax Ordinance, 1979 was illegal and. arbitrary---Action of Assessing Officer in ignoring the loss without assigning any reason making addition under S.25(c) of the Income Tax Ordinance, 1979 of the sums which factually represented loans and the refusal to rectify the original orders were all arbitrary and contrary to law, rules and regulation---Maladministration was established---Federal Tax Ombudsman…

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