FTO slams tax dept for issuing harsh assessment orders

ISLAMABAD: The Federal Tax Ombudsman (FTO) has strongly criticized the tax Department for issuing harsh assessment orders on the basis of unverified third-party information, observing that assessing officers are duty-bound to ascertain facts before penalizing taxpayers.

In a case, the taxpayer was assessed on the allegation of purchasing a motor vehicle, despite her categorical written denial that she had ever booked, purchased, or made any payment for such vehicle. She maintained that her CNIC had been misused.

The Ombudsman noted with serious concern that the assessing officer proceeded with the amended assessment without conducting even the most elementary verification. Not a single letter was issued to the vehicle manufacturer, nor was any effort made to confirm the source of investment or payment before concluding the proceedings.

On this FTO office itself undertook the necessary investigation. The information obtained directly from the vehicle manufacturer and the concerned bank revealed that the payments were made from an account maintained by another individual, conclusively establishing fraudulent misuse of the taxpayer’s CNIC.

Further inquiry by the FTO office from the Excise and Taxation authorities confirmed that the vehicle was never genuinely owned by the taxpayer and had been transferred through other individuals, including a person found to be outside the income tax system.