The Islamabad High Court (IHC) has set aside the findings of the Federal Tax Ombudsman (FTO) that recommended disciplinary action against a tax official who issued notices to taxpayers under Section 176 of the Income Tax Ordinance. The judgment allows a constitutional petition filed by the official, Raashid Mahmood Khan, and means that the disciplinary recommendation can no longer stand. The FTO is a federal body that examines complaints of maladministration, meaning misuse of office or unfair conduct by government offices.
What the court said about the FTO's powers
The court said the central question was whether the FTO was justified in recommending disciplinary action under Section 9 of the Federal Tax Ombudsman Ordinance, 2000. It said the ombudsman can investigate complaints involving misuse of authority, discrimination, undue delay and actions taken in bad faith. Any such finding, however, has to rest on material showing conduct that falls within the law's definition.
The IHC said that issuing a notice during official duties, or a dispute over how statutory powers are used, does not by itself amount to maladministration. Some further evidence, such as misuse of authority or bad faith, must be shown. In the court's view, the FTO had not adequately established misconduct before treating the disputed use of powers as grounds for disciplinary action.
The case arose from bank information the official obtained and notices he issued while audit proceedings against a taxpayer were pending. The court noted that departmental approval for obtaining the information was available. It also noted that the taxpayer later availed the Tax Amnesty Scheme, 2019, and withdrew an allegation of personal malice against the official. The official had sought a transfer of the case on 02.05.2019, and the transfer was carried out on 07.05.2019.
What was set aside, and what was not
The FTO had made three recommendations. The first asked the Federal Board of Revenue (FBR), which oversees the tax department, to take disciplinary action against the officer who issued notices dated 12.03.2019 and 18.03.2019. The second asked the Commissioner-IR to transfer the taxpayer's case to another officer, and the third asked that proceedings for Tax Year 2013 be completed transparently and after a proper hearing.
The court said the second recommendation became infructuous once the case was transferred. The third lost its practical effect because the proceedings became time-barred on 30.06.2019, as the President of Pakistan later recognised in an order dated 29.09.2020. Only the first recommendation was examined on its merits, and the court found it could not be sustained on the record.
Accordingly, the IHC set aside the FTO's findings dated 02.12.2019 to the extent of the first recommendation, along with the President's order of 29.09.2020 insofar as it rejected the challenge to that recommendation. The remaining recommendations are unaffected, and the court made no order as to costs. The court also said that objections under the Federal Tax Ombudsman Ordinance and the Federal Ombudsmen Institutional Reforms Act, 2013 did not prevent it from examining the order under Article 199 of the Constitution, which empowers high courts to review official orders.
Aasan alfaaz mein
Islamabad High Court ne Federal Tax Ombudsman ki woh sifarish khatam kar di hai jis mein ek tax afsar ke khilaf mehkama jati karwayi ki baat thi. Afsar ke jari kiye gaye Section 176 notices ko adalat ne ghalti nahi maana, kyunke sirf notice jari karna misuse ya bad faith ka saboot nahi hota. Adalat ke mutabiq ombudsman ko kisi afsar par karwayi se pehle wazeh material dikhana hota hai. Aam taxpayer ke liye iska matlab hai ke tax notices par ikhtilaf ka faisla saboot ki bunyad par hota hai, aur abhi yeh nahi bataya gaya ke appeal hogi ya nahi.
