ISLAMABAD: Tax experts have raised concerns over alleged pressure tactics by tax officials, forcing taxpayers to withdraw complaints filed with the Federal Tax Ombudsman (FTO) regarding intentional delays in refund processing. These undue delays continue despite appeal orders being finalized over a year ago.
The refunds in question were due after the Appellate Tribunal’s ruling, which was not challenged in the Lahore High Court, making the decision legally binding. However, instead of processing refunds as per the ruling, tax officials are reportedly creating additional hurdles.
Experts highlighted that the establishment of a Refund Zone within field formations, initially meant to expedite refunds, has instead turned into a tool for selective processing and further bureaucratic delays.
Case of Coercion at LTO Lahore
Miss Sofia, an Income Tax Practitioner representing a taxpayer assessed at a Large Taxpayer Office (LTO) Lahore, revealed a recent case where a tax official refused to approve a refund unless the taxpayer withdrew their FTO complaint.
Upon following up on a pending claim, she met the Additional Commissioner, who had been holding the file for a week. He stated that he would sign off on the refund only if the FTO complaint was withdrawn. He further warned that if the complaint remained active and FTO ruled the delay as maladministration, he would escalate the matter to the President, further delaying the refund by at least a year.
Legal Ruling Ignored Despite Acceptance by Department
Sofia detailed that a partial refund was initially issued only after a writ petition was filed. However, the Appellate Tribunal later ruled that the full refund, along with compensation for the delay, must be issued within 30 days. The FBR accepted the ruling and chose not to challenge it in court. Yet, despite repeated reminders and follow-ups, the refund remained pending, forcing the taxpayer to escalate the matter to the FTO.
Once the FTO sought a report, the Deputy Commissioner Inland Revenue (DCIR) processed the refund in the IRIS system and forwarded it for administrative approval. At this stage, the Additional Commissioner deliberately stalled the process, coercing the taxpayer’s representative to withdraw the complaint.
Experts Demand FBR Action Against Misconduct
Sofia described these actions as clear blackmailing and an abuse of authority. She urged FBR Chairman to take immediate action against such maladministration and misconduct, which tarnish the reputation of the tax department.
