Monday February 26, 2024

FTO directs FBR to trace record of remanded cases

By Our Correspondent
December 08, 2022

ISLAMABAD: The Federal Tax Ombudsman (FTO) in pursuance of an own motion cognisance has ordered the Federal Board of Revenue (FBR) to trace out the record of remanded back cases prior to the year 2019.

It also directed the FBR to develop a legal module in such a way that the case pending adjudication would be visible to the concerned commissioners and chief commissioners along with the date of expiry of the case.

The own motion investigation was initiated on the complaints received to the Federal Tax Ombudsman, wherein the complainants had contended that their cases were not adjudicated afresh on their remand back by Appellate Tribunal for de novo consideration during the period prescribed in Section 11B (2) of the Act, therefore they had become time-barred. They approached the concerned authorities but no action was taken.

However, Section 11B (2) of the Sales Tax Act, of 1990 states as below:

11B. Assessment giving effect to an order: (2) Where, by an order made under Chapter-VIII by the Appellate Tribunal, High Court or Supreme Court, an order of assessment is remanded wholly or partly and the commissioner or commissioner (Appeals) or officer of Inland Revenue, as the case may be, is directed to pass a new order of assessment, the commissioner or commissioner (Appeals) or officer of Inland Revenue as the case may be, shall pass the new order within one year from the end of the financial year, in which the commissioner or commissioner (Appeals) or officer of Inland Revenue, as the case may be, is served with the order:

Therefore, a notice was sent to all the chief commissioners –IR as well as the commissioners –IR (Appeals). All seven commissioners-IR (Appeals) reported nil. Chief Commissioners-IR sent lists of remanded back cases lying with them and reported that none of them was time barred. Since, the information provided was contrary to factual position, therefore, the additional commissioners IR, Office of Chief Commissioners and regional offices like MTO, CTO, RTO–I and RTO–II were also called to discuss the issue.

The FTO observed that prior to 2019, neither there was computerisation of legal record, nor it was manually maintained properly. There is all possibility of many remanded back cases lying pending in different offices unattended and no one is taking pains to dig out such cases, as after the transfer of sales tax regime from customs to IR in the year, 2010, frequent changes are witnessed over the jurisdiction of cases on large scales and this exercise is continued.

Although, jurisdiction over the cases was notified by the FBR itself, but nobody bothered to oversee as to whether the PRAL had shifted the soft record of the aggrieved registered persons from previous jurisdiction to new one.

As a result, the notifications showed the jurisdiction at one place and the PRAL system at other place for years together till some complaint was filed or the person made efforts himself to get it transferred and even after the transfer of soft data by the PRAL from old place to new one, the manual record was not transferred by the old office to the new one.

Since the new office did not process the case without manual record, the case remained unattended, as the department still maintains both records i.e. soft as well as hard for processing any case because of the fact that all operations are not being automated. No procedure has been developed by the FBR for field formations about the transfer of cases when jurisdiction is changed.

The changes over jurisdiction coupled with frequent transfers/postings of officers without observing tenures, further complicate the situation, as the incumbent ones remained unaware of pendency of the remanded back cases and no linkage of field offices had been developed with the Appellate fora, therefore, when Order-in-Appeal or judgment is passed by the courts, its recording in the relevant file or computer system depends on human resource, which is prone to cause lapses due to one reason or the other.

Accordingly, the FTO in pursuance of own motion cognisance has ordered the FBR to review the soft data of all registered persons to bring them in line with the existing jurisdictional notifications and ensure that whenever change in jurisdiction is notified in future, the soft data is transferred by the PRAL to the concerned field office immediately.

It also directed that the member-IR (Operations) will lay down procedure for transfer of manual record from previous jurisdiction to new one.

It also directed that the member (IT) will develop/enhance legal module in such a way that the case pending adjudication with each officer is visible to the concerned commissioner as well as the chief commissioner along with the date of expiry of the case. If possible, an alert should be generated by the system at least 15 days prior to the expiry of the case and the member-IR (Operations) will prescribe a procedure for field formations for feeding the orders passed by the Appellate Tribunals and superior courts and upload them on the system and compliance on recommendations (i), (iv) & (v) must be made within three months by sending monthly progress report. However, compliance with recommendations (ii), (iii) & (vi) must be made within 45 days.