FINDINGS/RECOMMENDATIONS ABDUR RAUF CHAUDHRY, (FEDERAL TAX OMBUDSMAN).---The complaint has been filed under section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (the Ordinance) against imposition of harsh penalty for non-filing without providing sufficient time of hearing.
2. The complaint was sent for comments to Secretary, Revenue Division under Section 10(4) of the Ordinance. In response, the deptt. Informed that the contention of the Complainant was not correct on the grounds that the case of Complainant was selected for audit for the tax year 2012-2013 by the Board under Section 72B of the Sales Tax Act, 1990 (the Act). In this regard, first notice was issued by the Commissioner Inland Revenue, Multan Zone, RTO, Multan under Section 25 of the Act vide No.CIR/MN-ZONE/2013-14/280/232 dated 24.10.2014 for production of sales tax record for the period 07/2012 to 06/2013. Second and third notices were issued by the unit in charge vide C. No. AUDIT-02/MN-ZONE/ST/72B-2013/14/2402 dated 24.01.2015 and C.No.2402 dated 17.02.2015.
Therefore, three notices were properly issued to the Complainant but he failed to provide the sales tax record for audit, thus violated the provisions of Section. 25 of the Act. In view of above, the penalty under Section 33(9) of the Act was imposed. Further that Show Cause notice (SCN) vide C.No.2402 dated 18.03.2015 was served upon the Complainant. The Complainant has not denied the service of the said SCN. It means that the SCN was properly received by the Complainant. In the said notice hearing of the case was fixed 26.03.2015. On due date-of hearing, the Complainant neither appeared nor submitted any written reply to the SCN. Besides, no application was received front the Complainant to adjourn the case. Therefore, the case was decided ex-part on the basis of available record.
3. During hearing, the AR complained that the notice was issued on 18.03.2015 and assessment completed on 26.03.2015. He .Referred to Circular No.07 of 1994 whereby at least 15 clear days are required for compliance. Similarly, according to him penalty of Rs.65,000/- was illegally imposed. If at all it should have been of Rs.5000/- for default of one notice for one month. Extension upto 25.07.2013 for the month of June, 13 had been granted by FBR vide circular issued on 12.07.2013 and return was late by 3 days only. Penalty for 3 days amounted to Rs.300 but the deptt imposed penalty of Rs.1100 for 11 days under section 33(1) of the Act. The AR also filed copies of two orders of FTO wherein it was held that 15 clear days are must for hearing and completion of assessment for default.
4. The DR defended the treatment meted out. He produced copies of two show cause notices. Third notice belongs to CIR office.
Findings:
5. Passing Assessm ent Order without providing sufficient time to complainant being against FBR instructions tantamounts to maladministration under section 2(3)(i)(a) of the Ordinance.
Recommendations:
6. FBR to direct the concerned Commissioner to---
(i) re-visit the Assessm ent Order under section 45-A of the Act and pass fresh order after affording hearing to the Complainant and considering his view point; and
(ii) Report compliance within 30 days.