Law: Wealth Tax Act, (XV of 1963)

Section: 32

Law: Finance Act, 1989

Section: 7(1)(7)(8)

Finance Act (V of 1989)----S.7(1)(7)(8)---Capital Value Tax Rules, 1990, R.8---Wealth Tax Act (XV of 1963), S.32--- Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9---Purchase of agricultural land---Non-payment of Capital Value Tax---Demand of Capital Value Tax with additional tax---Validity---Department under S.7(7), Finance Act, 1996 could only demand actual. capital value tax from the complainant---Additional tax might be recovered from the registering authority as provided under S.7(8) of the said Act---Notice was required to be revised---Federal Tax Ombudsman recommended that the Commissioner of Wealth Tax should revise the recovery notice in accordance with subsections (7) & (8) of the Finance Act, 1989. DECISION/FINDINGS The complainant alleged that the Assessing Officer has wrongly issued a notice for payment of Capital Value Tax amounting to Rs.105,000 and additional tax at Rs.31,500 relating to assessment year 1997-1998. 2. The facts stated in the complaint are that the complainant had purchased agricultural land in the month of August, 1996 for Rs.21,00,000 and paid Local and Provincial taxes amounting to Rs.2,10,000. The Income-tax Department has served recovery notice for assessment year 1997-98 on 27-11-2001 showing demand of Capital Value Tax amounting to Rs.105,000 and Additional Tax Rs.31,500. The complainant alleged that the department has never issued and served assessment order and demand notice prior to recovery notice hence the recovery notice dated 27-11-2001 is illegal. 3. The respondent submitted that the complainant had purchased agricultural land and paid the fees amounting to Rs.2,10,000 to the Local and Provincial Governments for mutation of " the property. The complainant has not paid Capital Value Tax which is chargeable @ 5 % . The officer proceeded under rule 8 of Capital Value Tax Rules, 1990 for recovery of CVT alongwith additional tax. The complainant has deposited Rs.30,000 out of total demand of Capital Value Tax. 4. The Complainant contended that the Assessing Officer neither opportunity to hear nor served any assessment order or prior to 17-11-2001, therefore, levy of additional tax is…

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