ISLAMABAD: Federal Tax Ombudsman has rejected the re-review application filed by Federal Board of Revenue wherein it was implored that FTO was not justified in questioning the exercise of powers given by the statute and holding FBR responsible for the issuance of the SRO 1003(I)/2011.
Sources said that FBR’s re-review petition against the order passed by FTO in review 12/2012 titled as Secretary Revenue Division, Islamabad Versus Waheed Shahzad Butt, Advocate High Court, Lahore has been rejected with the remarks that there is no provision for the second review in FTO Ordinance 2000.
FBR had earlier filed the first review before the former FTO Dr Suddle which was rejected whereas now the second review was being filed before the present FTO Abdur Rauf Chaudhry.
Sources added that earlier complainant Waheed Butt, through C No 577/2011, approached FTO and alleged that the act of issuance of Circular 06 of 2009 constituted ‘maladministration’ on part of some functionaries of FBR. The said circular was issued wrongly and with improper motives that resulted into loss of billions of rupees to the national exchequer. In RA 12/2012 former FTO Dr Shoaib Suddle had ruled that FBR act of issuing Circular 06 of 2009 and then inserting Clause 79 in the Second Schedule of the Income Tax Ordinance 2001 through SRO 1003(I)/2011 without approval of the Parliament speaks of improper motive, as also inefficiency, incompetence and ineptitude.
FTO’s recommended to take action against tax officials responsible for amending the taxation regime without prior approval of the Parliament, which caused a huge revenue loss to the national exchequer, remained unimplemented by FBR even after the rejection of main review petition and re-review application filed by the former Member Appellate Tribunal Inland Revenue. In particular, FTO had instructed FBR to take immediate measures either to delete the Clause 79 from the Second Schedule of the Ordinance or to get it approved retrospectively by the Parliament. FTO observed that FBR acted beyond its jurisdiction in exempting corporate sector service providers from minimum tax, sources added.
FBR’s act of inserting the said Clause in the Second Schedule without the Parliament’s approval raises questions about its motives as well as its efficiency. Also as no amendment to Section 153 was approved by Parliament the insertion of Clause 79 in the Second Schedule changing the taxation regime was clearly an act without jurisdiction.
