Federal Tax Ombudsman (FTO) has conveyed to taxpayers that once the Federal Board of Revenue’s (FBR) notice is issued within a years’ time period, the taxpayer is bound to maintain tax records till the decision of the legal proceedings.
However, the FTO is shocked that the Regional Tax Office (RTO) Lahore has issued a reminder of notice after five years, reflecting a glaring example of RTO’s lethargy and inattention is also glaringly visible.
The FTO’s order issued on Friday that the complaint was originally filed under the Federal Tax Ombudsman Ordinance, 2000 against the alleged illegal issuance of notice under section 161(IA) of the Income Tax Ordinance, 2001 (the Ordinance) in 2018 for Tax Year 2016.
FTO order added that “Departmental lethargy and inattention is also glaringly visible. Show cause notice for TY 2016 was issued in May 2018 and then a reminder was issued after 5 years in April 2023.
Such an inattention and ineptitude tantamount to maladministration in terms of section 2(3)(ii) of FTO Ordinance, 2000”. FTO has recommended the FBR to direct the Chief Commissioner concerned to look into this unwarranted delay fix the responsibility and initiate appropriate proceedings, FTO order added.
FTO admitted that conclusively, the notice u/s 161 was issued within the time limit as set by the Superior Courts and the status of proceedings under section 161 as of June 30, 2022, was pending before an authority.
In view supra, it is held that notices issued u/s 161 of the Income Tax Ordinance, 2001 for the tax year 2016, dated 7 May 2018 were well within the time limit of six year after the expiry of the tax year concerned, expiring on June 30, 2022 as set by Supreme Court in the case of M/s Panther Sports.
Further by the above-quoted provisions i.e. the explanation and first proviso to sub-section (3) of Section 174 of the Ordinance, the proceedings u/s 161 were pending as of 30 June 2022. Once notices are issued within the 6 years, the taxpayer is bound to maintain the record till decision of the proceedings, the FTO order added.
