The Federal Tax Ombudsman (FTO) has directed FBR to reexamine the duplicate illegal assessment orders for the tax years 2016, 2017, and 2020 which were issued in violation of the FBR circular dated 30-06-2015, which states that no notice under the Income Tax Ordinance 2001 is to be issued to taxpayers w.e.f. 01-07-2015 without a system-generated barcode.
The brief facts of the complaint were that complainant was an individual engaged in the business of running a rice husking mill. The Inland Revenue Officer, RTO Hyderabad carried out a withholding audit for Tax Years 2016, 2017, and 2020 and issued manual orders.
Thereafter, the department issued a show-cause notice for withholding audit for the above-mentioned years again. However, the monitoring of withholding audits for these years was already conducted by the previous officer.
But without examining the facts, the unit officer issued bar-coded assessment orders for Tax Year 2016 and for Tax Years 2017 and 2018 through IRIS creating tax liability of Rs. 35,746,758, Rs. 19,517,692, and Rs. 29,405,862 respectively. The complainant filed a rectification application under Section 221 as well as a revision application under Section 122A of the ordinance but failed to get any response.
Therefore he took up the matter with the Federal Tax Ombudsman. The FTO observed that manual assessment orders under Section 161/205 of the Ordinance for Tax Years 2016, 2017, and 2020 were issued on 25-12-2017, 17-08-2018, and 18-08-2020 respectively.
The manual orders contained fake DCR numbers, which could not be verified from the relevant demand and collection register of the unit. Even the paltry tax demand created in this dubious way had not been carried forward in the subsequent year for recovery action, resulting in a loss of legitimate government revenue.
Accordingly, FTO has directed FBR to conduct a fact-finding inquiry into passing unverifiable orders, in violation of the Board’s direction dated 30-06-2015 and causing loss of revenue in order to initiate disciplinary proceedings under E&D rules and to report compliance within 45 days.