FINDINGS/DECISION ' This complaint has been filed to allege infringement and violation of instructions in the framing of assessm ent for the year 2001-2002.
2. The facts leading to the complaint are that the Complainant-individual carries on business of garments. No hocks of account are maintained. Return for the year 2001-2002 was filed declaring Income at Rs,48,000 compared to Rs,45,000 in the preceding year of 2000-2001 which was the first year of business. The case was selected for Total Audit through random computer ballot which followed issuance of statutory notices which remained uncomplied. The Assessing Officer then conducted enquiry through his Inspector, confronted the Complainant through notices under section 62, and in the wake of repeated non-compliance, framed the assessment ex parte under section 63 (TA) on 18-3-2003 determining Income at Rs,700,000 by estimating Sales and applying GP (etc). This is the cause of grievance.
3. The Respondent have forwarded parawise comments by RCIT Eastern Region, Lahore which in addition to questioning the competence of the complaint for admission in view of the bar contained in section 9(2) of the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000 (hereinafter called the FTO Ordinance) explain that the Complainant remained uncooperative and failed to collect documents after making request for these and that ex parte assessm ent was justified because of default on several occasions.
4. None was present for the Complainant when called out. The record shows that the case was fixed earlier also and adjournments by the Complainant were sought twice on the one pretext or the other. Now on the third fixation no body is present. The complaint is, therefore, decided on merits with the help of DR, Mr. Anwar-ul-Haq Jillani (D-CIT) who is present with record.
5. The DR submitted that enquiry conducted by the Inspector showed that the Complainant initially started business with the name and style of Usman Garments but later changed it to Fraz Garments, Now the business is run in two shops, one on the ground floor and the other in the basement. At one place 'garments' and at the other there are dealings in `wool'. The Inspector during his visit made inventory of stock and collected visiting cards separate for the garments activity known as Fraz Garments, and for wool dealing in the name of Gaba Wool. The cards and stationery of the two units have the same telephone number and address. The Complainant was then confronted with the proposed estimate of sales and the evidence which was to be made the basis for determination of- Income. The Complainant continued to insist that the A inventory made by the Inspector should be made available to him despite being told that the Inspector's Report had been shown to him. The DR presented order sheet, dated 7-9-2002 whereby the Inspector was directed to conduct enquiry and his report, when received on 19-9-2002, was made a part of the record. The DR surmised that in a "no account" case the factors relevant to assessment are the field enquiry, the place of residence, and the educational institutions which the dependent's children attend. The life style thus helps in determining the prosperity of the business. In the Complainant's case it was found that he lived in a posh locality (namely Shah Jamal) and his children attend the City School, which is exclusive for higher strata of Society. On these considerations Sale' though, proposed in the notice at Rs,15.0 (M) were finally fixed at Rs,10.0 (M), subjected to GP at 10% and expenses allowed at a much higher figure of Rs,300,000 (claimed Rs,220,100) in view of the higher volume of turnover estimated by the Assessing Officer. The Income thus came to be assessed at Rs,700,000 which according to the DR was reasonable.
6.. It may be mentioned that the objection about competence of the complaint for admission have been repeatedly over-ruled following earlier decisions including the one made in . Where the allegation of "maladministration" is made the jurisdiction of the Federal Tax Ombudsman is attracted.
7. The department has carried out sufficiently visible inquiries which the complainant in spite. Of the opportunity afforded has not rebutted and has avoided to appear. It may however, be pointed out that where any inquiry is made by the Inspector a copy of his report should be supplied to the assessee to enable him to.Rebut it. It is not sufficient to only show such report to the assessee. This amounts to maladministration. Considering the facts of the case no interference is needed.
However, it is recommended that:--
(i) C.B.R issue directive/instruction that in case, where inquiry report is prepared by an Inspector or any authorized functionary of the department copy of the same should be provided to the assessee whether he applied for it or not in Compliance be reported within 30 days.