FTO directs FBR to issue refund due as per law
Federal Tax Ombudsman (FTO), Dr. Muhammad Shoaib Suddle has recommended Federal Board of Revenue (FBR) for issuing appropriate directions to all field formations, treating the matter as a systemic issue and direct the Commissioner to issue refund due, as per law and report compliance within 30 days.
According to a statement of the FTO Secretariat here on Wednesday, the Complainant M/s S.H. Steel Re-Rolling Mills & Furnace I/9,Islamabad filed a complaint versus the Secretary Revenue Division Islamabad in which, complainant believed that his applications for issuance of refund due for tax years 2009 and 2010 were wrongly rejected by the Department on 22-02-2012. He said that his appeal against the impugned order was accepted by Commissioner (Appeals), vide order dated 30-04-2012.
The Department, however, did not issue the refund due despite repeated efforts by the Complainant, which was tantamount to maladministration. The Authorized Representative (AR) submitted that the AOP was dissolved through an agreement and the business was taken over by the Complainant, in individual capacity.
The Department rejected the Complainant's refund contending that the tax deductions were related to an AOP, not to the Complainant. Setting aside the impugned order, the Commissioner (Appeals) held that since the AOP had not claimed tax credit in its Returns filed for the tax years 2009 and 2010, the Department could not justifiably withhold the refund due. The Complainant thereafter requested the Department for the issuance of refund but to no avail. The Departmental Representative (DR) argued that the Complainant's refund claim was rejected on the ground that deductions were related to AOP and not to the Complainant. The Department filed an appeal against the order of the Commissioner (Appeals) before the ATIR on 17-07-2012. The AR confronted the DR's arguments and submitted that the Appellate Tribunal had not suspended the order of Commissioner (Appeals). The Complainant's refund could not be withheld merely because of the appeal filed by the Department.
In support of his contention, the AR has relied upon the Findings/Recommendations issued by the Hon'ble FTO reported as 2008 PTD 1838. Arguments of both sides have been heard and record perused. The refund rejection order passed by the Department was annulled by the Commissioner (Appeals) vide order dated 3004-2012. The Department preferred an appeal against the said order before the ATIR. However, no stay order in favour of the Department was granted. The Hon'ble FTO has already decided in judgments reported as 2006 PTD 1637 and 2008 PTD 1838 that the matter of refund could not be connected with filing of appeal by the Department and refund due ought to be issued without delay, as per law.