Law: Income Tax Ordinance, 2001

Section: 162,205,148&FirstSched.,

Income Tax Ordinance (XLIX of 2001)----Ss. 162, 205, 148 & First Sched., Part-IV, cl. (56) [as substituted by Finance Act, 2008]---S.R.O. 567(I)/2008 dated 11-6-2008---Recovery of tax from the person from whom tax was not collected or deducted---Additional tax---Import of cotton---Demand of tax due at the import stage along with additional tax on the ground that S.R.O. 567(I)/2008 dated 11-6-2008 allowing exemption had become redundant on substitution of provision of cl. (56) Part (iv) of First Schedule to the Income Tax Ordinance, 2001 by the Finance Act, 2008, from 1-7-2008---Assesee contended that while substitution of cl. (56) was said to have taken effect from 1-7-2008, the Commissioner of Income Tax on 12-7-2008 clarified to the Chief Collector of Customs that the said S.R.O. was in field and exemption was available---However, returns of income were due by December, 2009, where purchase of raw materials including import of cotton would be reflected in audited accounts/statements---Tax collectable at import stage was not final discharge of tax liability---If tax was not collected at import stage, it could be discharged at the time of filing return---Validity---There appeared lack of coordination, inaction and mistaken interpretation on the part of Federal Board of Revenue officials---Confusion, delay, inaction, unjust and unreasonable treatment meted out to the complainant constituted maladministration--Ingredients of mal-administration, additionally Federal Board of Revenue clarified the position with regard to the said S.R.O. and cl. (56) by Circular letter dated 8-6-2009, but by that time imports had taken place---On 26-9-2009, after complainant's representation, the Federal Board of Revenue directed field offices that recovery of demand in such-like cases be kept "on hold" and the amount be recovered in six equal instalments starting July, 2009 onwards but the recovery was being enforced, and on "default" additional tax was being charged---From the facts and documents maladministration was there due to delay, negligence, incompetence, and lack of coordination and being unjust and unreasonable in the treatment to resolve the issue---Federal Tax…

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