FTO di­rects FBR to is­sue re­fund due as per law

The Pak Banker - - Front Page -


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.

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