FTO rules tax deposits taken without legal assessment are maladministration
The Federal Tax Ombudsman has ruled that tax deposits taken during Section 175C proceedings without a lawful assessment amount to maladministration. The finding came on a complaint by an Abbottabad hospital owner.
ISLAMABAD: The Federal Tax Ombudsman (FTO) has held that collecting tax deposits from taxpayers during proceedings under Section 175C of the Income Tax Ordinance, 2001, without later determining liability through the procedure laid down in law, amounts to maladministration.
The ruling came on a complaint filed by the owner of Noor Surgical Hospital in Abbottabad, according to a statement issued on Tuesday. The complainant said Inland Revenue officials had recovered a substantial amount in coercive circumstances despite there being no lawful assessment or determination of tax liability.
During proceedings before the ombudsman, the tax department did not produce any speaking order, assessment order or other legal determination to establish the alleged default or the tax liability, the statement said.
The FTO consequently declared such 'voluntary' tax deposits illegal where they are obtained without the subsequent completion of the prescribed legal process to determine liability.
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