ISLAMABAD, Dec 2: The Federal Tax Ombudsman (FTO), Justice (Rtd) Saleem Akhtar rejected the complaint of Paktel Ltd, finding charges of maladministration against the Central Board of Revenue(CBR) as incorrect and due to separate litigation on the same grounds in the High Court.

The FTO observed that the dispute has two aspects; first phase pertains to whether receipts from the sale of air-time charges and other ancillary receipts falls within the ambit of section 80 C, or to be treated under the normal law, said an statement issued on Sunday.

The second issue, Justice said, related to whether a partly set aside assessment can be completed within the limitation period prescribed under section 66(1)(C) irrespective of the fact, whether an appeal has been filed covering the same issues.

The Justice held that the first issue was under reference before the High Court on the date the complaint was filed and further, as there was no other allegation of maladministration independent of the issue before the court, the complainant can not be entertained.

Regarding the second issue, FTO said it was clear that where an appeal was filed in respect of a particular year or years and an assessment has been partly set aside, the provisions of section 66(1)(C) were not invoked.

An assessment was to be made for the whole income year and not in piecemeal. Fresh assessment would be made after the verdict was announced by the High Court. “For reasons recorded above, there is no substance in the complaint and the same is rejected” he maintained.

A dispute arose between Paktel Ltd, a public limited company and the CBR, in which the former complained to the FTO that the income tax department had refused to give effect to an order in appeal passed by Income Tax Appellate Tribunal.

The Appellate Tribunal had given an order in which the assessment framed for the charge years 1995-96 to 1997-98 were partly set aside and could not be completed within the period of limitation prescribed under section 66(1)(C) of the Income Tax Ordinance.

The complainant alleged that irrespective of the fact whether appeals have been filed in respect of three years, since these did not cover the set aside issues, assessment thereof should have been completed within the limitation period prescribed under section 66(1)(C) of the ordinance.

The assessment had gone into appeal before the income tax tribunal. After considering the arguments of both the contesting parties, the tribunal concluded that section 80 C, clearly excludes receipts on account of services rendered, as was the current case and directed the assessing officer to re-compute the income from receipts on account of airtime revenue and ancillary charges on account of services rendered and as such outside the presumptive tax regime under section 80 C.

The CBR aggrieved of the judgment of the learned tribunal, filed a reference to the High Court under section 136 of the ordinance and submitted to the FTO that since appeal was pending before the Lahore High Court, decision on set aside issues could not be made.

Further, limitation prescribed under section 66(1)(C) would not be applicable, as partial assessment cannot be made.