ISLAMABAD: In its decision pertaining to a case filed by Niazi CNG Company, the Federal Tax Ombudsman (FTO) has ruled that inconsistent policies of the Federal Board of Revenue (FBR) regard adjustment of tax deductions from Compressed Natural Gas (CNG) stations is tantamount to maladministration.
The complainant had filed claims for aggregate refund of Rs 1.32 million for the tax years 2010, 2011, 2013 and 2014.
These refund claims aroused on account of excess deduction of income tax at source under section 235 of the Income Tax Act, 2001. The complainant submitted that despite fulfilling all requirements of law and procedures, no refund claims were addressed properly.
During the proceedings, the FBR challenged complainant’s right to access FTO for relief. The FBR told the FTO that complainant had no cause to file a complaint before the FTO since the refund claim was not deposed of within the time allowed under the statute, and the complainant had the appellate forum available to approach further.
Upon this, the FTO responded that department’s claim about the complainant’s cause to approach the FTO was false and taxpayer had the right to file a complaint before the FTO if departmental maladministration was evident.
The FTO referred to a decision given by the Supreme Court of Pakistan. The decision stated that tax deduced under section 235 of the ordinance is adjustable or refundable as advance tax in view of the provisions, 147(4) and 147(4B).
The FTO also mentioned a decision of a case with similar nature which was upheld by the president, adding that “it was not understandable as to why the FBR has failed to direct the field formation to adopt a uniform policy in cases of CNG stations.”
The complaint was filed under section 10(1) of the Federal Tax Ombudsman ordinance, 2000, against non-issuance of income tax reform for tax years 2010-2014.
