FINDINGS /DECISION ' This is a complaint filed by the son and legal heir of the late Mr. Muhammad Rafiq Ghaus, who was engaged in the manufacture of crown caps for beverage bottles under the name and style of Ghausia Metal Closures, Faisalabad. The complaint relates to alleged non-issuance of income-tax refund and also seeks compensation under section 102 of the Income Tax Ordinance. The main points in the complaint are as under:---
(i) The late Muhammad Rafiq Ghaus was assessed as proprietor of Ghausia Metal Closures for the assessm ent years 1992-93 to 1998-99 in Circle 21, Faisalabad and income-tax assessments up to 1998-99 had been completed and neither the complainant nor the respondent are in appeal for any year except 1992-93 for which assessment year the department has gone in reference before the Lahore High Court on a point of law.
(ii) Assessm ent for the year 1992-93 was framed at an income of Rs,3,768,237 against declared loss of Rs,1,203,750 after making addition of Rs,2,700,000 under section 13(1)(aa) of the Income Tax Ordinance.
(iii) The complainant's father went in appeal before the CIT (Appeals) who deleted the addition of Rs,2,700,000 under section 13(1)(2a) and also allowed relief with respect to additions out of profit and loss account expenses.
(iv) As a result of the order of the CIT (Appeals) income in the case was reduced to below taxable limit and no tax thus remained payable for the assessment year 1992-93.
(v) The department filed second appeal before the Income Tax Appellate Tribunal, Lahore who dismissed the department's appeal vide its order, dated 2-8-1997 as the appeal was not found to be competent and was found to have been filed without legal authority.
(vi) The department then filed a reference before the Lahore High Court on point of law which is still pending.
(vii) In the assessm ent year 1992-93 tax of Rs,301,163 had been deducted under sections 50(4) and 50(5) and a proper application for issuance of refund was filed in Circle 21, Faisalabad on 25-9- 1999 but despite repeated visits to the offices of the Assessing Officer, IAC and Commissioner there has been no result and no reply has been received to the refund application.
(viii)The department should not withhold the refund under the provisions of Income Tax Ordinance since the refund is due under section 100 of the Ordinance together with compensation. The legal heirs of the deceased are unable to run the business due to shortage of fund.
' It has been prayed that directions be issued for immediate issuance of refund amounting to Rs,301,163.
2. The respondent's reply has been received and the representatives of the complainant and the respondent have attended and have been heard. The main points in the respondent's reply are as under:---
(i) It is not correct that addition under section 13(1)(aa) was deleted by the CIT (Appeals) but in fact the assessm ent was set aside and at present the department is in reference to the Lahore High Court.
(ii) The assessm ent set aside by the CIT (Appeals) is still pending in view of the department's reference to the High Court.
(iii) It is correct that a refund application was filed but since the assessment was set aside and the matter is pending in reference no refund is due to the complaint.
(iv) Since no refund has been determined there is no question of withholding it. According to the clear provision of section 100 refund does not become due when an assessment has been set aside.
' In view of the above facts no maladministration is stated to be involved in the case.
3. During the hearing it was confirmed that the complainant was not right in stating that the CIT (Appeals) had deleted the addition of Rs,2,700,000 when in fact it had only been set aside. The complainant's A.R. Attribute this wrong statement to the absence of relevant records. The position explained by the respondent was, on the other hand, found to be correct. It was seen from the record that detailed grounds of appeal were filed by the department before the Tribunal in respect of the observations of the CIT (Appeals) while setting aside the addition under section 13(1)(aa) but the Tribunal dismissed the appeal for the stated reason that it had been filed by the IAC and not by the ACIT who was the Assessing Officer. The appeal was thus held to have been incompetently filed and it was accordingly dismissed. The department then filed a reference to High Court against the order of the Tribunal.
4. The present position thus is that assessment for the year 1992-93 stands set aside but the reassessm ent proceedings cannot be taken up because of the department's reference to High Court. The respondent is quite right in stating that section 100 specifically excludes from its purview "an order setting aside an assessm ent" and no refund is therefore, considered to be due as a result of setting aside of an assessm ent. Similarly subsection (4) of section 102 also excludes from the purview of the said section any such refund as has become due as a result of the setting aside of an assessm ent. Thus while it is observed that the department should have explained the legal position to the complainant instead of just keeping the refund application pending, as far as the claim of the refund itself is concerned no intervention is found possible in the case. The complaint is accordingly dismissed.