I. BACKGROUND: (a) TLQC 3687 of 20.8.26 about Refund Application, FIFO based procesing, FTO & Court can supersede FIFO & Expected changes (2) For List of earlier relevant TLQCs, please refer to para III.

II. UPDATED COMMENTARY

A. Reference of Issue

1. Further to KQU 4048 of 20.8.26, being an important matter, we would inform you about ----------------------------  (Attachment 3704.1) in the ensuing paragraph, with emphasis in bold & Underline for quick reading.

2. The complaint was filed u/s 10(1) of the FTO 2000 and the case was fixed for comments on 10.7.26. The department filed parawise comments, which were examined and placed on file. The complainant and DR attended. Arguments were heard and record perused and complaint is disposed of on the basis of available record as under.

Learned Counsel for Appellant Submissions

1. Earlier Complaint Regarding Refund for TY 2016

The complainant stated he had earlier filed a complaint before the office bearing complaint No. ------------ for nonissuance of refund for TY 2016, which was decided by this office on 3.2.26 directing the respondent department to dispose of the pending refund application as per law.

2. Issuance of Notice under Section 170(4)

The complainant further stated that earlier the respondent had issued a notice u/s 170(4) of the ITO, 2001 on 15.8.2020 in response to which the complainant filed all the required documents vide reply dated 6.9.20. The complainant further stated that after the direction issued by this forum, the respondent passed order u/s 170(4) on 18.6.26 for TY 2016 without providing an opportunity of being heard, which is highly objectionable. The impugned order has thus been passed in violation of the principles of natural justice, in disregard of the binding directions issued by this forum, and is consequently without lawful authority, void, and liable to be set aside.

3. Reliefs Requested by the Complainant

3.1 The complainant prayed that the revenue division may kindly be recommended to issue the refund along with due compensation; appropriate disciplinary action may kindly be recommended against the assessing officer for deliberately making misleading, false, and untrue statements and suppressing material facts, thereby misleading the competent authority.  

3.2 The RTO, Islamabad filed written comments wherein, they stated that the refund order has already been passed u/s 170(4) of the ITO, 2001, on 18.06.2026 for TY 2026.

C. Departmental Position

Perusal of complaint and record shows that the complainant had earlier approached this forum against non-disposal of his pending refund application for TY 2016. The earlier complaint was decided by his office on 3.2.26 with the direction to the respondent department to dispose of the pending refund application strictly in accordance with law.

D. FTO Deliberations

1. Failure to Consider the Complainant’s Reply and Evidence

--------------------Perusal of the record further reveals that prior to passing the impugned refund order, the department had issued a notice u/s 170(4) of the ITO, 2001 on 15.8.2020. In response thereto, the complainant submitted a detailed reply along with supporting documentary evidence on 6.9.2020. The department has neither denied receipt of the said reply nor produced any material on record to establish that the contents of the reply and supporting evidence were examined before passing the refund rejection order for TY 2016 on 18.6.2026.

2. Non-Application of Mind by the Assessing Officer

It is further observed that while passing the order u/s 170(4), the assessing officer neither discussed the reply filed by the complainant nor recorded any findings on the documentary evidence furnished by him. The impugned order is completely silent regarding the explanations already available on record and appears to have been passed ex-parte order by ignoring the complainant’s submissions. Such an approach is contrary to the settled principles of fair administration and reflects non-application of mind by the assessing officer.

3. Disregard of the Earlier Directions of the Ombudsman

The directions issued earlier by this Forum required the department to dispose of the complainant’s refund application on merits and in accordance with law. Compliance with such directions necessarily required the assessing officer to examine the material already available on record and, where necessary, provide the complainant reasonable opportunity of hearing before arriving at an adverse conclusion. Instead, the assessing officer merely passed a refund rejection order without considering the complainant’s earlier reply and evidence. Such action has made this Forum’s recommendations meaningless.

E. FTO Findings

1. The subject case presents a classic case of departmental disregard for law and fairness. The ------ had issued a notice u/s 170(4) of the ITO, 2001 for TY 2016 on 15.8.2020. In response thereto, the complainant submitted a detailed reply along with supporting documentary evidence on 6.9.2020. The department has neither denied receipt of the said reply nor produced any material on record to establish that the contents of the reply and supporting evidence were examined before passing the refund rejection order for TY 2016 on 18.6.26. Despite lapse of 6 years neither any fresh notice u/s 170(4) was issued nor findings of this office were considered nor sane mind or relevant legal provisions were applied.

2. If the Complainant, a public sector organization an attached department of Pakistan Air Force has been meted out such treatment, what an ordinary taxpayer should expect from RTO Islamabad.

3. The conduct of the assessing officer in passing the impugned ex-parte order without considering the complainant’s earlier reply and without providing fresh opportunity of hearing and examining supporting evidence is found to be arbitrary’, unfair and contrary to law. Such omission tantamount to maladministration in terms of section 2(3)(i)(a) & (b) of the FTO, 2000

F. FTO Recommendations

1. Direct the CIR (Refund Zone), RTO, Islamabad to revisit the impugned order u/s 122A for TY 2016 in the light of law and facts of the case and pass fresh order after affording adequate opportunity of hearing to the complainant;

2. CCIR, RTO Islamabad to obtain the explanation of the author of impugned order dated l8~ June, 2026 and share the same with this forum; and

3. Report compliance within 30 days.

III. LIST OF OTHER RELEVANT TLQCs

(a) 3676 of 17.8.26 about Rejected FIFO Defence, if over 60 days Pending Refund Disposal & 170A auto credit Refund to Bank A/C – FTO

(b) KQU 3262 of 26.2.25 about --------------------------------

(c) KQU 2833 of 3.6.24 about ---------------------------

(d) KQU 2833 of 3.6.24 about ------------------

(e) 3633 of 22.7.26 about Section 170(4) Refund application for 236K Refund disposal in 60 days – FTO

IV. FURTHER DETAILS & SERVICES 

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

Quick Commentary Service Provider and High Level 440+ Tax & Levies Laws Consultants)

Head of Tax & Professional Excellence Services (Symbols of High Quality Practical Tax, Levies & Corporate Training for Beginners to High Levels' Professionals)

PTCL: 92-21-34329108 Mobile: 0334 322 3161 Website: kasbati.co Facebook:  https://www.facebook.com/taxexcellence/

Google Map link: Tax Excellence  YouTube Channel Tax Excellence