Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)

Law: Income Tax Ordinance, 1979

Section: 156

Income Tax Ordinance (XXXI of 1979)]....... S. 156 Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S. 2(3) Rectification of mistakes Less amount of gross profit was deducted from the estimated gross profit than the actual declared gross profit Application for rectification of -Assessment was rectified by enhancing sales to arrive at net income as earlier assessed Validity Order under S.156 of the Income Tax Ordinance, 1979 was based on complete lack of understanding of the scope of S.156 of the Income Tax Ordinance, 1979 Assessing Officer could not enhance the estimate of sales in the rectification order as he had to operate within the framework of the original assessment order -Sales had been estimated at Rs.700,000 and after working out gross profit @ 15% amounting to Rs.105,000 the incorrect figure of gross profit amounting to Rs.52,500 was deducted to arrive at the trading account addition instead of deducting the actual declared gross profit of Rs.97,500 Rectification order was required to re compute the trading account addition to the income after deducting Rs.97,500 from the assessed gross profit of Rs.105,000 and it was not for the Assessing Officer to replace any estimate of sales for the already assessed sales -Rectification order as passed was the result of maladministration -Return was also qualified under Self Assessment Scheme and had been wrongly excluded from. Self Assessment Scheme Federal Tax Ombudsman recommended that the rectification order for the assessment year 2001 2002, dated 1 1 2003 be again rectified in the light of the observation in para. 6 above; that a letter of warning be issued to the Assessing Officer who passed the order under S.156 of the Income Tax Ordinance, 1979 telling him to refrain from such illegal action in future; that the complainant's return for the year 2002 2003 be considered as qualifying for Self Assessment Scheme as far as the comparison with the last tax payable is concerned Return may thus be accepted under Self Assessment Scheme if other requirements of the scheme were met. FINDINGS/DECISION This is a complaint relating to a statedly erroneous order passed under section 156 of…

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