FINDINGS/DECISION This complaint is directed against RCIT order, dated 31-3-2003 for set apart of the Return for the assessm ent year, 2002-2003 for Total Audit by resort to para. 9(2) of the SAS.
2. The facts leading to the complaint are that business as retail vendor of TPR Soles used in the making of shoes, is carried as an Individual. Maintenance of books of accounts is denied. Return for the year, 2002-2003 was filed declaring Income at Rs,222,800 against Rs,190,000 for the year, 2001- 2002. The tax paid at Rs,15,850 was 20% higher than the one paid last time hence the Return qualified for SAS but was not selected by the computer random ballot. RCIT issued show-cause notice on 11-1-2003 expressing intention to set apart the Return for the reasons that (i) capital in cash as shown was not commensurate with the volume of business and rotation of stock during the year, and (ii) nine different movable/immovable assets were acquired as on 30-6-2002. Reply, dated 6-2-2003 having failed to satisfy the RCIT, final order of set apart was passed on 31-3-2003 for the same reasons as conveyed in the show-cause notice. This is the cause of grievance.
3. The Respondent has forwarded para-wise comments by R-CIT Eastern Region, Lahore questioning the competence of the complaint for admission in view of the bar contained in section 9(2) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 (hereinafter called the repealed Ordinance) and "maladministra-tion" is denied contending that as high quantum of liquid assets having been utilized in the business remained unsubstantiated and the explanation regarding purchase of properties was neither plausible nor supported by evidence. Moreover, reasonable opportunity was extended remaining within the Guidelines provided by the C.B.R.
4. Learned counsel for the Complainant argued that the actual investment in business was Rs,2,50,000 and other sum aggregating Rs,23,12,468 represented cash, bank advance which could not be treated as business capital because these were intended for different purposes. Moreover, all immovable assets were not acquired during the year-under-consideration except one which was fully explained and, therefore, set apart for this reason was not justified. It was prayed that the action be declared unwarranted, without jurisdiction and time-barred.
5. Mr. Anwar-ul-Haq Jillani (D-CIT) appearing for the Revenue submitted that with total available resources of Rs,2.5 (M), the turnover as declared at Rs,2.2 (M) was too inadequate to be accepted.
He submitted that no person running business with a meagre capital of Rs,2,50,000, earning Income at Rs,2,22,800 could still acquire numerous properties. The D.R. Referred to Wealth Statement as on 30-6-2002. The source of investment in the properties etc. Needed to be looked into.
6. The objection by the R-CIT about the competence of the complaint for admission has time and again been overruled for the reasons that against set-apart no opportunity of appeal, review and revision is available. Moreover, it is only an investigation which can establish whether the allegation of "maladministration" carries any. Truth.
7. The arguments by the two sides lead to the conclusion that what the R-CIT is supposed to look into at the time of set-apart, is prima facie indicators about "evident decline in business" or non- disclosure of true particulars. It is also not to be lost sight of that the Complainant's is "no account" case where reason to believe has to be based on such factors as (i) availability of resources, (ii) the acquisition of assets, and (iii) standard of living etc. On this visualization there appears to be no mala fide or discrimination which could fall in the definition of "maladministration" as per clause
(3) of section 2 of the FTO Ordinance.
The complaint, therefore, has no merit. It is filed and the case is closed.