Law: Wealth Tax Act, (XV of 1963)

Section: 3,4(3),16(5)

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 9,2(3)

Wealth Tax Act (XV of 1963)---Ss. 3, 4(3) & 16(5)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss. 9 & 2(3)---Charge of wealth tax---Net wealth to include certain assets---Ex parte assessment--­Bald lump sum estimation of value of movable assets---Validity---Was not clear as to what kind and what quantity of "movable assets" were the subject-matter of estimate---Ex parte assessment though entailed an element of guess-work, still it was mandatory to make a "best " and an honest estimate of the value of each asset and each item claimed as liability, and as close to the real value as possible---Caution had to be exercised to be fair and just, warding off even a remote possibility of arbitrariness or illegality ---Legal infirmities which beset the assessment rendering them "arbitrary unreasonable, and unjust" amounted to maladministration-assessment orders thus were illegal and arbitrary and consequently were of no legal effect---To meet out substantial justice by removing oppressiveness in the dispensation of justice, Federal Tax Ombudsman recommended that the Assessment orders being illegal and of no legal effect, Wealth Tax Officer was to reassess/re-compute the value of each movable asset after evaluating the explanation offered and evidence tendered by assessee for which fresh opportunity was to be provided. In re: Sakhi Contractors & Engineers, Multan 1981 PTD 210 ref. Complaint No. 1250 of 2001 rel. DECISION/FINDINGS The facts in brief are that the complainant had not filed Wealth Tax returns for the Assessment Years 1993-94 and 1994-95. Consequently, notices issued calling for returns remained uncomplied resulting in ex parte assessment under section 16(5) of the Wealth Tax Act. These were confirmed by the First Appellate Authority to the extent of 'immovable assets but for redetermination of the value of movable assets, the assessments were set aside. The Department went in appeal but this dispensation was maintained by the Appellate Tribunal. In the second round, for determining value of movable assets, the default once again of statutory notices resulted in ex parte assessment under section 16(5) of the Wealth…

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