Sindh High Court (SHC) has expressed serious concern that the conduct of the Federal Board of Revenue (FBR) as well as its respective Commissioners /Collectors, is by itself a major impediment in the timely disposal of revenue cases.
The SHC has also imposed a cost of Rs. 25,000 on FBR in each listed petition which shall be deposited in the account of Sindh High Court Clinic.
According to a judgment of the SHC (C. P. NO. D-4669 / 2022 a/w), the court said it is not hesitant in saying that most of the cases crop up due to their conduct, which includes in-competence, ill-advice, mala fides, callous attitude towards tax-payers and so on and so forth. On several occasions, SHC said it tried to apprise the concerned officials at FBR, including its Chairman as well as Members, but to no avail.
Thereafter, in compliance with the order, instead of withdrawing the impugned action initiated by various Commissioners, on the directions of FBR statement was filed by Shahid Ali Qureshi, who is appearing in C. P. No. D-5535/2022 wherein, it was stated that the matter was referred by FBR to the Ministry of Law & Justice for opinion and pursuant to such opinion it has been decided that until the Trusts are registered under the Provincial Laws they are not entitled to exemption under Income Tax Ordinance, 2001.
Unfortunately, despite being cautioned, they have not corrected their stance; rather a new plea has been raised that some legal opinion was obtained from the Ministry of Law and Justice. This we may add was an afterthought on the part of Respondents as the advice was sought on 15.2.2022 much after the impugned action of the Respondents.
Though not relevant, SHC said that the advice sought was also premised on a wrong assumption of facts and law since firstly, the Petitioners didn’t need to get themselves registered under the Trust Act, 1882; secondly, 2001 Ordinance, neither before the said repeal; nor as of today mandates that the Petitioners must be registered under the Provincial Laws.
In view of the above, read with our order dated 07.02.2023 and the conduct of the Respondents including FBR and so also for the reason that Lahore High Court has also decided the matter against them and despite such position, the issue is still being agitated by the Department with no justifiable cause and reason, these Petitions are allowed by holding that the Petitioners are not required to obtain respective registration under The Sindh Trust Act, 2020 for issuance of exemption certificate as it is not a precondition under the 2001 Ordinance, SHC added.
The respective Respondents shall issue requisite Exemption Certificates, after fulfillment of other remaining conditions under the 2001 Ordinance, if any. Moreover, it is a fit case to impose costs as well, as despite being cautioned, Respondents have persisted with their stance.
The SHC may observe that FBR must act fairly in dealing with taxpayers and abide by the law governing it, and if any benefit accrues to taxpayers under the law, it must not be withheld and the assessee’s and its own time and resources should not be needlessly wasted. This frivolous litigation has wasted the time of this Court; time which would have been better spent in resolving legitimate disputes.
Accordingly, a cost of Rs. 25,000/- is imposed on FBR in each listed petition which shall deposited in the account of Sindh High Court Clinic. As a matter of clarification, insofar as respective ad-interim orders are concerned, in some of the matters private Respondents were though permitted to deduct tax from the Petitioners; but were required to retain it with themselves, and in view of the above, the said Respondents are directed to reimburse it to the respective Petitioners, SHC order added.