DECISION JUSTICE (R) SALEEM AKHTAR, FEDERAL TAX OMBUDSMAN -- This is a complaint filed by the legal heirs of a deceased income tax assessee in which it is alleged that the income tax assessment for the year 1998-99 was made in the case of the deceased after the assessment had become barred by time. The main points reflected in the complaint (which is written in rather a rambling manner) are as follows:--
(i) Assessm ent for the year 1998-99 was purportedly made op 3.6.2001 in which an income of Rs.
228,957 was assessed against Rs. 72,919 declared. A notice u/S. 116 of Income Tax Ordinance, 1979 was also purportedly issued on 3.6.2001.
(ii) The so-called assessm ent order dated 3.6.2001 was served after a lapse of about 12 months.
Over-writings in the demand notice, the assessment order and in the notice u/S. 116 make it quite evident that the assessm ent order was in fact, passed much after it had become time-barred and the date originally written in the assessment order and the notices u/Ss. 85 and 116 was obviously changed subsequently.
(iii) The statutory notices stated to have been served on the deceased were never in fact, served.
(iv) The assessm ent order for the year 1998-99 was thus not passed on the purported date of 3.6.2001 but was entered in the back date after it had become time-barred.
It has been prayed that the said assessment order be directed to be annulled.
2. The respondent's reply has been received and the representatives of the complainant and the respondent have been heard. The main points in the respondent's reply are as follows:--
(i) The cutting on the demand notice and the overwriting of the date on the notice u/S. 116 does not indicate any mala fide and is only a correction of bona fide mistakes. There is no over-writing in the date mentioned in the assessm ent order, copy of which is enclosed.
(ii) The demand notice issued on 6.3.2001 could not be served till 12.2.2002 as it was reported that the assessee Ch. Shah Din had expired and the school which he was running was closed.
(iii) The assessm ent was framed ex parte u/S. 63 of the Income Tax Ordinance, 1979 at the income of Rs. 213,956 on the basis of the history of the case as the income for the year 1997-98 was Rs.
148,596 after reduction by the C!T (Appeals). The departmental appeal filed with the Income Tax Appellate Tribunal is still pending.
(iv) The statutory notices (issued during assessment proceedings) were served by the notice server/drafty of the concerned Circle but the name of the person on whom the notices were served was not indicated by the notice server.
(v) The complainant should have filed an appeal against the order and there was no justification for moving the Federal Tax Ombudsman in this regard.
3. During the hearing it was further stated on behalf of the respondent that the case was duly entered in the Demand and Collection Register at Sr. No. 108 of the BF portion of the register after which there were 44 more entries, It was further contended that there was thus no possibility of a back-dated entry having been made in the DCR. The said register was, however, not produced during the hearing but the relevant income tax file was examined which left no doubt that the assessm ent order was in fact, passed much after 3.6.2001 and cuttings, etc. Were made quite blatantly without any serious attempt at cover up. This is evident from the following:-
(i) Examination of the demand notice u/S. 85 clearly showed that initially the assessment year written in the notice was the incomplete "2001-2002" and this was scored out and over-written as "1998-99". It is to be noted that the concerned person had begun to write the assessment year as "2001- 2002" which was not even the current year on the purported date of 3.6.2001. The current assessm ent year at that time was 2000-2001 and some one could possibly make a mistake by mentioning the then current year on the demand notice but it is unacceptable that somebody would indicate the next assessm ent year viz. 2001-2002 by mistake unless the demand notice was actually being prepared when the said assessment year was the current year. Furthermore the date of the demand notice clearly appeared as 3.6.2002 but the "2" was over written by "1" to make the date read as 3.6.2001.
(ii) In the assessm ent order available with the complainant also the date was clearly readable as "3 6.2002" which was obviously over-written to make it appear as "3.6.2001". The assessment order available on the tax record does not, however, show any such over writing which shows that the order was changed by the DCIT, Mr. Muhammad Saleem who could not, however, change the assessm ent order sent to the complainant.
(iii) The notice u/S. 116 of the Income Tax Ordinance, 1979 was also clearly dated 3.6.2002 which was later made to look as 3.6.2001.
(iv) It was also pointed on behalf of the complainant that Ch. Shah Din had died on 15.2.2000 and the purported service of statutory notices relating to assessment proceedings is obviously quite fake, It was also seen that there was not a single report by the notice server or any other official that the assessm ent order and demand notice could not be served as Ch. Shah Din had expired, In fact, the file is totally silent regarding any attempt to serve the demand notice before it was served on the legal heirs more than a year after its purported date of issue. This again shows that the assessm ent order and demand notice were in fact, prepared much after the assessment had become time-barred.
4. In the light of the above, it is recommended that--
(i) Steps be taken by the Revenue Division to have the assessment for the year 1998-99 annulled.
(ii) Disciplinary proceedings be initiated against Mr. Muhammad Saleem the then Deputy Commissioner of Income Tax, Circle 44, Faisalabad on account of his obvious manipulation of records.
(iii) Compliance regarding (i) above be reported within 30 days and regarding (ii) above within 60 days.