Federal Tax Ombudsman (FTO) has expressed serious concern over repeated changes in the tax jurisdiction of an overseas Pakistani with the sole purpose of recovery through attachment of his bank account after an exparte amendment order.
In this connection, the FTO issued an order against the tax department on Tuesday.
According to the FTO order, the complainant is an Overseas Pakistani who has been living permanently in Germany for past 20-25 years and he was never a Pakistan tax resident nor did he have any source of income in Pakistan.
The complainant stated that he had purchased the property out of foreign income earned from his business in Germany.
The complainant had also filed a declaration under “Tax Amnesty Scheme 2018” on July 26, 2018, which is much earlier than the date of the impugned assessment dated March 22, 2021, and though he had declared cash and prize bonds which he utilized against very same property in reconciliation of net wealth filed with revised wealth statement on 26 October 2020 and all these documents are available on his online profile.
The complainant further stated that for Tax Year 2018 original assessment order u/s 122(1) of the Income Tax Ordinance, 2001 (the Ordinance) was amended ex-parte on 22 March 2021 by treating properties purchased worth Rs. 60,809,500 as concealed income and tax of Rs. 20,502,825 was thus imposed and withdrawn directly from his bank account.
The perusal of the tax profile of the taxpayer shows that his address belongs to Rawalpindi and as such the jurisdiction of the case falls with the RTO Rawalpindi.
During the hearing the complainant also confirmed that the jurisdiction of his case belongs to RTO Rawalpindi and requested that reassessment proceedings should be completed in the same office where the return was filed, the amendment made, an appeal order passed and tax recovery was made from the bank through coercive measure.
As per facts stated above the stance of the complainant is correct in regard to the jurisdiction of the case. It is strange that while making ex-parte assessment and effecting recovery from bank RTO Rawalpindi was well satisfied with its jurisdiction but the moment case has been set aside and possibility of refund surfaced the case is being thrown to some other jurisdiction. So, the tax authority is directed to deal with the case in RTO Rawalpindi and not to transfer the case to any other RTO.
FTO office has observed that remand back proceedings have been pending since the passing of an order by CIR (Appeals) which has not been completed by the tax authorities. The complainant has already suffered hardship at the hands of tax authorities due to exparte amendment order passed by them and recovery of tax through coercive measure by attachment of his bank account. The taxpayer had to go through appeal procedure to get some relief. So, in the instant case, the tax authorities should have completed reassessment proceedings expeditiously to provide some relief to the taxpayer which has not been done.
The findings of the FTO office revealed that the transfer of jurisdiction at this point of time and in the face of facts stated above constitutes maladministration in terms of section 2(3) (i)(b) of the FTO Ordinance, 2000.
The FTO has directed the FBR to make sure that jurisdiction of the case is not transferred arbitrarily and unilaterally and also directed CIR RTO Rawalpindi to complete the reassessment proceedings expeditiously, as per law and in the light of directions of appeal order.
