Pakistan Case LawMalik MUHAMMAD KAMRAN ASLAM (PROP:) Messrs SKY HAWKS Versus SECRETARY REVENUE DIVISION, ISLAMABAD
This complaint was filed under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 against recovery proceedings through bank attachment and non-issuance of refund for Tax Year 2014 by the Department. The core legal question was whether the prolonged delay in passing an appeal effect order and failing to give credit for recovered tax amounts constitutes maladministration. The Federal Tax Ombudsman held that the Department's unexplained delay of over six years in issuing the appeal effect order and its failure to incorporate the recovered tax amount constituted maladministration. The complaint was allowed with directions to the FBR to fix responsibility for the unjustified delay, rectify the appeal effect order to allow credit for the recovered tax, and immediately dispose of the refund claim.
- Does a prolonged delay by the tax department in passing an appeal effect order constitute maladministration?
- Is a taxpayer entitled to credit for tax amounts recovered through bank attachment when an assessment order is annulled in appeal?
- What are the remedial powers of the Federal Tax Ombudsman regarding unjustified delays in issuing appeal effect orders?
FINDINGS/RECOMMENDATIONS
M. ZAFAR-UL-HAQ HIJAZI, FEDERAL TAX OMBUDSMAN.--- The complaint has been filed under Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) against recovery proceedings through bank attachment and non-issuance of refund for Tax Year 2014 by the Commissioner Inland Revenue, Refund Zone, RTO-II, Karachi.
2.Brief facts of the case are that the complainant is an AOP engaged in the business of services provider and is assessed to tax with Zone-III, RTO-II, Karachi. The complainant alleged that the Assessing Officer passed an order under Section 122(1) of the Income Tax Ordinance, 2001 for Tax Year 2014, dated 27.08.2018, and created a tax demand of Rs.19,191,237/-. The Department recovered tax demand amounting to Rs.5,274,596/-through Bank attachment.
3.Being aggrieved by the action of the Department, the complainant filed an appeal before the Commissioner Inland Revenue (Appeals-V), Karachi, who, vide Order-in-Appeal No. 22 dated 12.02.2019, annulled the impugned order with directions to re-examine the issues after providing a reasonable opportunity of being heard, as required under the law. Subsequently, the concerned officer de-attached the bank account. However, the Department failed to comply with the directions of the Commissioner Inland Revenue (Appeals) by neither passing the appeal effect order under section 124 of the Income Tax Ordinance, 2001, nor issuing the refund recovered through bank attachment. Hence, the instant complaint has been filed.
4.The complaint was referred to the Secretary Revenue Division, Government of Pakistan for comments and hearing by the Departmental Representative (D.R.), in terms of Section 10(4) of the FTO Ordinance read with section 9(1) of the Federal Ombudsmen Institutional Reforms Act, 2013.
5.The Chief Commissioner-IR, RTO-II, Karachi forwarded Para-wise comments vide C.No.CCIR/SO-IV/FTO-28347/KHI/IT/RTOII/KHI / 2025/5583 dated 10.12.2025 as submitted by the Commissioner IR, Refund Zone, RTO-II, Karachi vide letter dated 08.12.2025, which are placed on record, stating in the comments as follows:--
The case of the taxpayer has been examined and it is found that no refund application has been filed by the taxpayer and no credit of recovered demand has been given vide appeal effect order dated 24- Nov-2025 issued under sections 124/129 of the Income Tax Ordinance, 2001 by the concerned unit officer.
3. Brief fact of the case are as under:-
Therefore, in the light of above the case may be referred to the concerned unit for further necessary action."
FINDINGS:
6.The Departmental Representative failed to appear in multiple hearings scheduled on 28.11.2025, 05.12.2025, and 12.12.2025 to present his stance or furnish supporting documents relating to the issues raised in the complaint. As the matter could not be kept pending indefinitely, the case was reserved for orders on 12.12.2025. The available record was therefore examined and the matter decided accordingly.
7.After conducting the investigation and examining the record available, it has been established that the Commissioner Inland Revenue (Appeals-V), Karachi, passed Order-in-Appeal vide No. 22 dated 12.02.2019. However, the Respondent Department discharged its official obligation by issuing the appeal effect order on 24.11.2025, after a lapse of more than six years, without allowing credit for the amount forcibly recovered through bank attachment.
8.The anxiety and hardship suffered by the taxpayer are natural, as despite the lapse of a considerable period, their request for issuance of the appeal effect order was not diligently attended to by the Department. Such prolonged inaction on the part of the Department and the concerned officers in the discharge of their official duties constitutes "maladministration".
RECOMMENDATIONS:
9.FBR to direct:
MQ/1/FTO Complaint allowed.
Judges on this bench
- M. Zafar-Ul-Haq Hijazi97 judgments
- Federal Tax Ombudsman30 judgments