The Federal Tax Ombudsman (FTO) has issued a landmark order against an Inland Revenue Commissioner of the Corporate Tax Office Lahore (CTOL) for blocking fully verified income tax refunds by adopting delaying tactics.

According to report published in Business Recorder, Documents revealed that the tax lawyer Waheed Shahzad Butt had filed a plea before FTO Islamabad on behalf of a Lahore based aggrieved taxpayer Syed Jamil Abbas Naqvi against the CTOL officers and their associates for illegally blocking fully verified tax refunds and submitting false statements regarding filing of appeals before Appellate Tribunal Inland Revenue.

Earlier the FTO had ordered an inquiry against Commissioner of CTOL and others, including an additional commissioner and ACIR, for allegedly abusing their powers to achieve the tax targets. Later, the FTO directed the FBR chairman to inquire against CIR, additional commissioner and assistant commissioner.

FTO order stated, “Timeline provided by law have not been observed by the department. Fully verified refund has not been issued. Department has admitting in writing that in response to notice under section (u/s) 170(4) The computerised payment receipt (CPR) for tax deduction u/s 236A was furnished meaning thereby almost 99.9 percent of claim was fully verified. On one hand department has created refund u/s 124/129 with reference to order u/s 122 for tax year 2018 but on the other despite annulment of refund rejection order dated 26.04.2021 by Commissioner Appeal required appeal effect is being delayed.

Though no second appeal against order u/s 170(4) has yet been filed but CIR Enforcement (Ms Fizza Batool) in her reply claims the filling of such appeal. While Commissioner Enforcement Zone I CTO Lahore (Ms Fizza Batool) in her reply dated 06.07.2021 has categorically stated that the second appeal has been filed against the aforesaid order (dated May 25, 2021) of Commissioner Appeal, factually no such appeal has been filed rather it is all meant for delaying tactics.

Commissioner Appeals has already annulled on May 25, 2021 the order u/s 170(4) but department is not given appeal effect. After the receipt of appellate order dated January 29, 2021 for TY 2018 at CTO Lahore, ACIR Enforcement has rejected the refund claim on flimsy and untenable ground. Income tax refund for tax year 2018 is being delayed with malafide intent. Order of commissioner appeals for TY 2018 is not being implemented both in letter and spirit.

FBR to decide the refund claim on merit within given time period, as envisaged by the relevant statute record. Review the case in a holistic manner as apparently both Audit and Enforcement Zones of CTO Lahore are operating in isolation and without having any professional interface, FTO ordered.