ARBAB ABDUL RAZAQ vs The SECRETARY, REVENUE DIVISION, ISLAMABAD Ss — 2024 PTD 1580 FEDERAL-TAX-OMBUDSMAN-PAKIS

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ARBAB ABDUL RAZAQ VS The SECRETARY, REVENUE DIVISION, ISLAMABAD Ss. 9 & 10---Income Tax Ordinance (XLIX of 2001), Ss. 209 & 100D [as inserted vide Finance Act, 2020 dated 30th June, 2020]---Jurisdiction of the taxpayer, changing of---Maladministration---Scope---Taxpayer filed complainant against alleged unlawful transfer of his jurisdiction from RTO Quetta to Karachi by the FBR---Plea of the complainant was that he was a bona fide resident of Quetta City having been registered with the FBR at RTO Quetta since long, while the principal activity of the his business was the construction of the buildings and roads for Provincial Government on contract basis, however, FBR vide its Notification No.07(407) Jurisdiction / 2019/280620-R dated 03-12-2019 ('the Notification dated 03 December 2019') transferred the cases falling under the business category of Builders and Developers from RTO Quetta to MTO/LTU Karachi while he was neither a Builder nor the Developer as defined under S.100D(9) of the Income Tax Ordinance, 2001---Validity---Pertinently, S. 100D of the Income Tax Ordinance, 2001 was inserted vide Finance Act, 2020 dated 30th June, 2020, however in the present case, the jurisdiction of the taxpayer was transferred from RTO Quetta to MTO Karachi vide the Notification of 03 December, 2019; as such, the jurisdiction of the taxpayer had been transferred about six months before the insertion of S. 100D of the Income Tax Ordinance, 2001---This made the case of the transfer of the jurisdiction unlawful and void in the eyes of the law ---From analysis of the jurisdiction orders of the Board and the powers of the Board under Section 209 of the Income Tax Ordinance, 2001 to transfer jurisdiction of any person or class of persons, it was established that cases of builders/developers had been transferred to specialized zones as a special class of persons---Though the act of the Board to transfer cases as class of persons was not illegal and within the ambit of the powers conferred by the Income Tax Ordinance, 2001, however, evidently the transfer of case from Quetta to Karachi had caused severe hardship to the taxpayer and it was his genuine right to be taxed in the jurisdiction by facilitating him at the doorstep where the business was being done ; secondly, whether contractors involved in public sector construction could be clubbed with private sectors builders and developers was yet another area which needed FBR's deliberations without discriminatory treatment and with uniform treatment of all identical cases---Federal Tax Ombudsman recommended that the FBR was required to take a pragmatic view in the matter to (i) decide the issue of jurisdiction in line with other identical cases and in the light of orders by the superior judiciary ; (ii) review individual facts of the instant case so as to reach at a legal and equitable decision/conclusion---Complaint was disposed of accordingly.

ARBAB ABDUL RAZAQ vs The SECRETARY, REVENUE DIVISION, ISLAMABAD Ss — 2024 PTD 1580 FEDERAL-TAX-OMBUDSMAN-PAKISTAN

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