Federal Tax Ombudsman

FEDERAL TAX OMBUDSMAN SECRETARIAT Regional Office, Lahore

Complaint No 384/LHR/ST(294)727/2012 Dated: 30.05.2012 *

Muhammad Qasim Proprietor M K Traders Munsafi Road Quetta Branch at Akbari Mandi Lahore … Complainant Versus The Secretary Revenue Division Islamabad … Respondent

Dealing Officer : Muhammad Munir Qureshi, Advisor Authorized Representative : Javaid Iqbal Qazi, Advocate Departmental Representative : Ashfaq Ahmad, DCIR

FINDINGS/RECOMMENDATIONS

This complaint is against out of jurisdiction assessment made in RTO Lahore for Tax Year 2006.

2. The Complainant is an existing taxpayer/assessee holding NTN 2653318-9 at Quetta since 20.05.2006. RTO 1, Lahore, received information that the Complainant, deriving income from dry fruit business at Lahore, had purchased a motor vehicle (Toyota Land Cruiser) in Tax Year 2006. A notice under Section 114 of the Income Tax Ordinance 2001 (the Ordinance) was therefore issued to him as he had not filed Return of Income for Tax Year 2006. When there was no compliance, a provisional assessment was framed under Section 122C of the Ordinance. As no Return was

______*Date of registration in FTO Sectt. 2 384/LHR/ST(294)/727/2012 filed by the Complainant within the 60-day period stipulated in the statute, the provisional assessment attained finality. However, when a recovery notice was issued the Complainant filed this complaint before the Hon’ble Federal Tax Ombudsman.

3. The Complainant assails the assessment proceedings at Lahore as illegal for the reason that he was an existing assessee at Quetta since 2006 where he conducts dry fruit business, though he maintains a branch at Lahore, under the statute his assessment could only be made at Quetta.

4. When confronted, the Deptt filed a reply contending that although the Deptt was aware that the Complainant was an existing taxpayer at Quetta, it was decided to start assessment proceedings at Lahore as the Complainant had “shown his present address at Akbari Mandi, Lahore.” Also, he had purchased property in the vicinity of Lahore. The motor vehicle in question was too registered at Lahore.

5. Under the statute, a taxpayer can only be assessed in one jurisdiction and assessment proceedings in multiple jurisdictions are not permitted. The Complainant is admittedly an existing taxpayer at Quetta since Tax Year 2006. He started declaring Lahore branch business in the Returns filed at Quetta in Tax Year 2007. There was therefore no justification to start separate assessment proceedings at Lahore, under any pretext. Any information available in RTO-1, Lahore, regarding the Complainant that had a bearing on his income in any Tax Year was accordingly required to be communicated to the assessing officer holding jurisdiction over his case at Quetta. 3 384/LHR/ST(294)/727/2012

Findings:

6. The Complainant’s assessment by RTO-1, Lahore, under Section 122C of the Ordinance, for Tax Year 2006 is illegal as he is an existing assessee at Quetta.

Recommendations:

7. FBR to direct the Commissioner, RTO-1, Lahore, to – (i) invoke revisionary jurisdiction under Section 122A of the Ordinance and forward the entire record to Commissioner Quetta to proceed as per law, within 15 days; and (ii) report compliance within 05 days thereafter.

(Dr. Muhammad Shoaib Suddle) Federal Tax Ombudsman Dated: 09-08-2012 mmq/my