FTO rec­om­mends FBR to in­voke re­vi­sion­ary ju­ris­dic­tion

The Pak Banker - - Front Page -

IS­LAM­ABAD

Dr. Muham­mad Shoaib Sud­dle, Fed­eral Tax Om­buds­man (FTO) has rec­om­mended Fed­eral Board of Rev­enue (FBR) to di­rect the Com­mis­sioner to in­voke re­vi­sion­ary ju­ris­dic­tion un­der Sec­tion 122A of the Or­di­nance and re­visit the tax charged un­der Sec­tions 235, 231A, 234 and 236 of the Or­di­nance, as per law; and re­port com­pli­ance within 30 days.

De­ci­sion to this ef­fect was made by the FTO on a com­plaint filed by Muham­mad Iqbal Sindhu Pro­pri­etor Sindhu In­dus­try Street Heera Wash­ing Ma­chine Near Sa­man­abadi Chungi Gu­jran­wala verses the Sec­re­tary Rev­enue Division Is­lam­abad against de­duc­tion of tax at source in util­ity bills and at the time of mo­tor ve­hi­cle reg­is­tra­tion and cash with­drawals from bank and the re­sul­tant re­duc­tion in the re­fund claimed.

Ac­cord­ing to the find­ings and rec­om­men­da­tions of FTO, this com­plaint was against de­duc­tion of tax at source in util­ity bills and at the time of mo­tor ve­hi­cle reg­is­tra­tion and cash with­drawals from bank and the re­sul­tant re­duc­tion in the re­fund claimed. The Com­plainant is a man­u­fac­turer / sup­plier.

Tax de­ducted un­der Sec­tion 153 on sup­plies con­sti­tutes fi­nal dis­charge of tax li­a­bil­ity. Be­sides pay­ing the fi­nal tax li­a­bil­ity, the Com­plainant has also been sub­jected to tax with­hold­ing in util­ity bills, cash with­drawals from bank and at the time of mo­tor ve­hi­cle reg­is­tra­tion. He as­sails the same to be con­trary to law as it amounts to dou­ble tax­a­tion of his in­come.

When con­fronted, the Deptt filed a re­ply in which a pre­lim­i­nary ob­jec­tion was raised that the charge of tax un­der Sec­tions 235, 231A, 236 and 234 of the In­come Tax Or­di­nance 2001 in cases where fi­nal tax on the sup­ply of man­u­fac­tured goods was paid was an ap­peal­able is­sue and should be left to the reg­u­lar ap­pel­late fora for res­o­lu­tion. On mer­its, the Deptt con­tended that the tax as levied was con­sis­tent with statu­tory stip­u­la­tion and there was no dou­ble tax­a­tion of in­come. Both sides have been heard and record ex­am­ined by the FTO.

The Com­plainant has con­tended in the com­plaint that the De­part­men­tal treat­ment is con­trary to law, plac­ing re­liance on the Lahore High Court's or­der cited as 2011PTD1. As the is­sue in­volved is of mal­ad­min­is­tra­tion, the De­part­men­tal con­tention is found to be mis­con­ceived. The FTO ex­er­cised con­cur­rent ju­ris­dic­tion in such mat­ters, as held by the Lahore High Court in or­der dated 13.09.2012 in Writ Pe­ti­tion No.11545 of 2012. On mer­its, the Lahore High Court's judg­ment cited as 2011PTD1 holds the field, un­less over­turned by the apex court.

Ac­cord­ing to the Find­ings of the FTO, as held in judg­ment cited as 2011PTD1, once in­come is sub­jected to tax­a­tion in the fi­nal tax regime, no ad­di­tional tax is charge­able. Re­sort to ad­di­tional tax­a­tion in con­tra­ven­tion of the High Court's or­der is tan­ta­mount to mal­ad­min­is­tra­tion. The FTO Rec­om­mended the FBR to di­rect the Com­mis­sioner to in­voke re­vi­sion­ary ju­ris­dic­tion un­der Sec­tion 122A of the Or­di­nance to re­visit the tax charged un­der Sec­tions 235, 231A, 234 and 236 of the Or­di­nance, as per law; and re­port com­pli­ance within 30 days.

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