The Federal Tax Ombudsman (FTO) while disposing of a complaint relating to non-issuance of refunds has directed the Federal Board of Revenue (FBR) to settle the long pending refund claim and grant compensation for delayed refund as per law and incorporate computation of tax in appeal effect order.
The complainant was a private limited company, earning income from providing marketing and fulfilment house services. They filed the income tax returns for the years 2014 and 2015 along with the refund claims on account of tax deduction in excess of admitted liability.
FTO observed that the complainant had been running from pillar to post to get the refund duly created as a result of the appeal order and verified withholding tax, the credit of tax which had also been allowed in audit vide orders under section 122 (5A). The deliberate withholding of refund of duly verified tax is tantamount to maladministration in terms of section 2(3) (i) (a)(b) & (ii) of the FTO ordinance.
As per details, FTO was informed that the refund was to be processed by the enforcement division based on the appeal effect order by Additional Commissioner Inland Revenue (ADCIR) audit in the IRIS system. The ADCIR Audit had only uploaded the text of the appeal effect order and no computation had been made in the order.
Tax Ombudsman further found out that maladministration has been caused by inefficiency and red-tapism in the department.
“Additional Commissioner Audit was a senior officer of Grade 19, with more than 10-15 years of service, his lack of knowledge regarding processing of orders in IRIS was extremely shocking”, said FTO.
Tax Ombudsman, Dr. Asif Jah observed that “passing of orders under section 122 (5A) and ensuring rectification and appeal effect orders was his core job, anyone who is not conversant with the process of his core job responsibility is not fit enough to hold that position. Alternatively, if the order is not deliberately left incomplete with the intention of non-creation of due refund on the basis of credit already allowed after due verification in order under section 122 (5A), the maladministration is evident”.
Federal Tax Ombudsman has further directed FBR to look into the conduct of the Additional Commissioner Audit, from the perspective of his suitability for field posting.