Lahore High Court (LHC) has ruled that refund of income tax deposited for delay in issuance of exemption certificates shall be processed expeditiously and exemption certificates shall not be delayed by the FBR field formation.
It is reliably learnt that a division bench of LHC has disposed of appeal preferred by a taxpayer having grievance that due to delay in issuance of exemption certificate, the petitioner had to undergo agony in addition to deposit tax, which has to be refunded by the department. The LHC has issued order on the basis of assurance provided by the FBR field formations to the court.
When contacted tax lawyer Waheed Shahzad Butt told this correspondent that several cases are there in the field where exemption certificates were issued after considerable delay, in spite of firm and repeated instructions from FBR that it should be issued within 72 hours. Instant state of affairs is nothing but humiliation and embarrassment for the senior officers like Chief Commissioners and Member-FBR that exemption certificates are delayed on one pretext or the other. In case an application is not complete or it is not within the premises of law it should be forthwith rejected specifying reasons but once the application is complete and it is admissible as per law there is no justification for any delay.
Waheed further added that this type of attitude on the part of FBR field formation is causing a bad name for the goodwill of FBR. Earlier FBR vide Circular Letter No.1/38WHT/9 categorically elaborate the matter and state “The Government and the Board are firmly committed to facilitate taxpayers to the maximum so that economic activity is geared up.
In this regard, Board has time and again advised the field formations to promptly issue exemption certificates to eligible taxpayers. However, many taxpayers are approaching the Board with their grievance of delay in obtaining the certificates. The Board may look into this issue and ensure prompt issuance of exemption certificates to all eligible taxpayers. It may also be emphasized that this facility should not be used as a tool of tax recovery.
LHC order states “After arguing the case at some length, grievance of the appellant remained that due to delay in issuance of exemption certificate, the petitioner had to undergo agony in addition to deposit tax, which has to be refunded by the department.
Learned counsel for the respondent department, on instruction of the Commissioner, has undertaken before the Court that in the case of petitioner in particular and generally the exemption certificate shall not be delayed to those taxpayers, whose exemption for a particular in not under question.
It is the duty of FBR and its field formations to dispense justice and functionaries representing FBR are supposed to uphold the dignity of law. On the other hand due to some wrong practices under the powers available under IRS, process of law is being abused badly by some officials working in the field formations. The FBR officials are state functionaries appointed for lawfully administrating and carrying out the purposes of the fiscal laws but prima facie in some cases process of law is being abused badly, solely to meet the Budgetary Targets. By misusing the powers vested under fiscal laws some functionaries are playing havoc with the taxing statutes under the garb of unbridled powers, which is deprecated by higher judicial forums and accountability forums including office of Ombudsman/ Mohtasib, Waheed added.
In the case of petitioner in particular and generally the exemption certificate shall not be delayed to those taxpayers, whose exemption for a particular in not under question. It is also undertaken that refund of the tax deposited for delay in issuance of exemption certificate shall be processed expeditiously: LHC ordered.
(This news/article originally appeared in Business Recorder on June 17th, 2019)