Bank irrationally deducts withholding tax from tax filer

Bank irrationally deducts withholding tax from tax filer

KARACHI: A bank has deducted irrationally a huge amount as withholding tax from transactions made by an account holder.

The account holder was return filer and filed a complained before the office of Banking Mohtasib Pakistan for payment of refund from the concerned bank.

The Mohtasib after considering all aspects of the case, ordered the bank to refund the amount to the account holder.

The detail of the case is reported in the annual report 2020 of Banking Mohtasib Pakistan as:

“The complainants stated that they have been maintaining business account with the concerned Bank branch and are tax filer and there is no tax issue with any bank they are dealing with.

“However, the concerned branch of the Bank had deducted withholding tax of Rs 221,495.40 on their all fund transfer transactions done from September 23, 2019 to November 08, 2019 due to system error or negligence of the staff of the Bank’s branch.

“The Complainants protested on this misconduct of the branch staff and asked for refund of the entire amount of Rs 221,495.40 deducted as withholding tax.

The Bank refunded an amount of Rs 117,993.00 only and was hesitant to refund the remaining amount of Rs 103,501.47. As the matter remained unresolved, the Complainants lodged a complaint with the office of Banking Mohtasib Pakistan.

“Upon receipt of the complaint, the matter was taken up with the Bank. The Bank informed that the amount deducted from Complainants’ account had been deposited with FBR against CNICs of the Complainants which they can claim from FBR.

“On apprising, the Complainants further agitated stating that their payments were released to them after deduction of tax amount and since their liability has been paid to FBR in advance, therefore, factually there was no tax liability against them and the Bank debited their account unauthorizedly with the disputed amount and now taking plea which is irrelevant and unacceptable.

“Banking Mohtasib Pakistan office noted that the Bank’s stance was not justifiable as unauthorized amount was debited to Complainants account for no fault of the Complainants as the entire payments received by the Complainants were credited to their account after tax deduction as stated earlier.

“In the light of the above, the Bank was advised to revisit the case and refund the amount which was debited to Complainants’ account irrationally and without any reason.

“After exchange of correspondence establishing facts regarding unnecessary deduction of amount, the Bank finally accepted the claim of the Complainants and credited the remaining amount of Rs 103,501.47 in their account.

The Complainants confirmed the receipt of the said amount and expressed satisfaction over the amicable resolution of their complaint.”