Law: Income Tax Ordinance, 1979

Section: 59,66A&59(1)

Income Tax Ordinance (XXXI of 1979)---Ss. 66A & 59(1)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9---Powers of Inspecting Additional Commissioner to revise Deputy Commissioner's order--­Assessments were finalized under Self-Assessment Scheme---Refund was determined---Request for issuance of refund---Commissioner of Income­tax instead of giving approval, suggested action under S.66A of the Income Tax Ordinance after noting discrepancies regarding the ratio of declared income and the capital employed---Show-cause notice--­Cancellation of assessments---Withholding of refund ---Validity--­Assessment of facts and the contentions raised made clear that the action under S.66A of the Income Tax Ordinance, 1979 was taken and proceedings were started before the filing of the complaint and much before the notice was sent by, the Department to the asset/ complainant---Objection that some proceedings were initiated to circumvent the proceedings in the complaint were not justified---Action under S. 66A of the Income Tax Ordinance, 1979 was taken on legal grounds and for that reason, the refund was withheld---Order under S. 66A of the Income Tax Ordinance, 1979 had been passed cancelling the assessments for both the years, fresh assessments had to be framed after affording an adequate opportunity to the assessee of pleading his case---Federal Tax Ombudsman recommended that as a result, if any refunds became due, the same should be determined and paid forthwith. DECISION/FINDINGS The facts in brief are that 1999-2000 was the first year of business for which return was filed under S.A.S. declaring income at Rs.70,000 on a capital investment of Rs.1.6 M. Due to deductions at source a refund of Rs.360,658 emerged when return was accepted under section 69(1) of the Income-Tax Ordinance. This was issued to the complainant after due approval by the I.A.C./C.I.T. and after obtaining wealth statements not only for the year 1999-2000 but also for an earlier year. Wealth Tax Returns also were filed and assessments completed. Subsequently, Income-tax return for the assessment year 2000-2001, filed under S.A.S., declaring income at Rs.180,000 was…

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