ISLAMABAD: An office of Inland Revenue of the Federal Board of Revenue (FBR) has disrespected the legal order by making tax recovery from a bank account of a taxpayer despite a stay order was granted to avoid harsh measure.
In this unique case, a taxpayer filed a complaint before the Federal Tax Ombudsman (FTO). The taxpayer alleged that ex-parte order was passed on October 27, 2021 by the officer of Unit-I, Jhelum Zone, Regional Tax Office (RTO) Rawalpindi pertaining to tax year 2019, whereby, illegal demand contrary to facts was created amounting to Rs8.17 million.
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Aggrieved with the said order, appeal was filed on January 24, 2023 before commissioner Inland Revenue (Appeals-III) along with application for grant of stay against recovery of income tax demand of Rs8.17 million.
The complainant stated: “the commissioner appeals Rawalpindi fixed the case for January 24, 2023 and granted stay order against the recovery of disputed tax demand.”
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The taxpayer further stated that on the same day i.e. January 24, 2023 the stay order was shared with the department and concerned bank manager. However, the department on the same date arrived at bank around 3:45PM to get pay order from the bank manager amounting Rs8.17 million.
Furthermore, recover officer received the Pay Order dated January 24, 2023 for the said amount despite stay order with commitment / assurance to the banker that the pay order shall not be deposited in the bank for clearance if the copy of stay order is provided before 5:00 PM in the tax office.
Earlier, the same order was delivered to the department, the recovery officer. Despite commitment and valid stay order, the department presented the pay order in the National Bank for clearance. However, the pay order was not cleared by the Faysal Bank and returned the same on January 25, 2023 issued by the CIR Appeals.
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The tax office, however, responded to the FTO that the attachment of bank account of the complainant had been made on January 23, 2023 under Section 140 of the Income Tax Ordinance, 2001, and at that time, the complainant had neither filed appeal nor any stay was available in field against the recovery of the outstanding demand, and as such departmental action was lawfully justified.
It is further stated that under the law, the bank manager was lawfully bound to issue the pay order in favor of the department and effect recovery forthwith by clearing the same for diverting the required amount into the government exchequer.
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Moreover, the complainant had admittedly filed appeal before the CIR (Appeals-III) Islamabad on January 24, 2023 and as such the instant matter is subjudice at the point of time before the competent legal forum, thus the FTO is barred to hear the instant complaint.
The FTO in his finding observed that making recover through coercive measure disrespecting legal order of the appellate authority on the part of department is contrary to law and is arbitrary, unjust and unreasonable which constitutes maladministration.
The FTO asked the FBR to direct commissioner-IR concerned to comply with stay order issued by the CIR (Appeals-III).
