MUHAMMAD RAFI vs The SECRETARY, REVENUE DIVISION, ISLAMABAD Ss — 2025 PTD 1717 FEDERAL-TAX-OMBUDSMAN-PAKISTAN

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MUHAMMAD RAFI VS The SECRETARY, REVENUE DIVISION, ISLAMABAD Ss. 2(3) (i), 2(3) (ii) & 10(1)---Income Tax Ordinance (XLIX of 2001), Ss. 114(1), 148, 170(4) & 235---Protracted / multiple proceedings---Refund claim, rejection of---Malfunctioning and misuse of powers by the tax authority, allegation of---Maladministration--- Scope---Courteous conduct of tax functionaries, requirement of---Complaint was filed by the taxpayer against a Commissioner Inland Revenue (CIR) serving with FBR requesting for initiation of defiance / contemptuous proceedings on account of malfunctioning, misuse of powers, duplicate proceedings and duplication of notices for deliberately blocking the lawful refund for relevant Tax Year---Federal Tax Ombudsman found that i.) The department lacked the clarity to dispose of the pending issues as per law and norms---Prolonged proceedings adversely impact both the department as well as the taxpayer; ii.) The complainant did not come clean either: on one hand he had agitated that the core reason for rejection of refund claim at the time of first rejection of refund claim under S. 170(4) (that tax deducted under S. 148 of the Income Tax Ordinance, 2001, was final discharge of tax liability) was neither raised in the Show Cause Notice nor opportunity of hearing was given, but in the (present) complaint he was contesting the issuance of notice communicating the same reason and opportunity of being heard ; iii.) Departmental view that it was a case of Final Tax Regime, therefore, nothing was overpaid to be refunded was a legal issue, subject to different interpretation of law and Federal Tax Ombudsman Office was not a proper forum to decide such issues rather Superior Courts were---Facts of each individual case determine the application of law and legal precedents; iv.) Mere issuance of a notice or a show cause itself doesn't constitute any maladministration unless some illegal order was passed as courts have held in a number of cases that mere issuance of show cause cannot be taken as infringement upon someone rights; v.) Notices under S.122(9) read with S. 122(5A) of the Ordinance, 2001 being related to assessment issues need not be discussed at this forum (Federal Tax Ombudsman) as any lapse on any account was the prerogative of appellate fora---Thus, the allegations levelled by the complainant on the Respondent /CIR i.e. "malfunctioning and misuse of powers, double proceedings and duplication of notices just to gulp down the lawful refund, deliberate withholding and non-payment of refund, defiance and contemptuous proceedings" appeared to be premature; however, prolonged proceedings under S.170(4) of the Ordinance 2001 despite issuance of multiple notices constituted maladministration in terms of Ss.2(3) (i) & 2(3) (ii) of FTO Ordinance, 2000---However, noticeably, the conduct of departmental representative, during the course of proceedings, remained far from being exemplary---Being tax collector the FBR functionaries were expected to be polite, composed and compassionate while listening to the grievances of tax payers---The conduct of a civil servant ought not to be prejudicial to good order, service discipline or unbecoming of an officer and a gentleman---The FBR functionaries must at all times cognizant of the fact that "courtesy" was one of the core values being pursued by FBR---Federal Tax Ombudsman recommended that the FBR was required to i) direct the CIR to dispose of the refund claim in accordance with law and after giving proper opportunity of being heard to the complainant and compliance to be reported in 30 days; (ii) take practical measures to inculcate the true essence of "courtesy" in its functionaries and this should also be one of the cardinal yardsticks in performance evaluation of the officers/officials---Complaint was disposed of accordingly.

MUHAMMAD RAFI vs The SECRETARY, REVENUE DIVISION, ISLAMABAD Ss — 2025 PTD 1717 FEDERAL-TAX-OMBUDSMAN-PAKISTAN

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