ISLAMABAD: The Federal Tax Ombudsman’s (FTO) ruling against the tax officials responsible for issuing Circular 06 of 2009 is yet to be implemented by Federal Board of Revenue (FBR).
After issuance of the mentioned circular, FBR inserted clause 79 in the Second Schedule of the Income Tax Ordinance 2001 without approval of the Parliament. This was deemed by FTO as improper act.
FBR is immediately required to either delete the clause or get it approved by the National Assembly. Former FTO Dr Muhammad Shoaib Suddle had declared that it was not within the jurisdiction of FBR to issue the clause and that it had no authority to issue SROs or Circulars contradicting the statutory provisions of tax laws, as held by the Supreme Court.
The direction issued to FBR by the then FTO, Dr M Shoaib Suddle, to initiate appropriate action against officials who issued the circular came in the aftermath of a complaint filed in early 2011 by Lahore-based tax lawyer Waheed Shahzad Butt. A former Member FBR and Member ATIR has further challenged the Order passed by Dr Suddle in Review No 12/2012 in case No 577/2011 titled as Secretary Revenue Division, Islamabad versus Waheed Shahzad Butt in re-review before present FTO Abdur Rauf Chaudhry, which has now been rejected with the remarks that there is no provision for second review in the FTO Ordinance, 2000.