114. Return of income.

— (1) Subject to this Ordinance, the following persons are required to furnish a
return of income for a tax year, namely:–
(a) Every company;
(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount
that is not chargeable to tax under this Ordinance for the year; or
(ac) any non-profit organization as defined in clause (36) of section 2;
(ad) any welfare institution approved under clause (58) of Part I of the Second Schedule
(b) Any person not covered by clause 8[(a), (ab), (ac) or (ad)] who,—
(i) Has been charged to tax in respect of any of the two preceding tax years;
(ii) Claims a loss carried forward under this Ordinance for a tax year;
(iii) owns immovable property with a land area of two hundred and fifty square yards or more or
owns any flat located in areas falling within the municipal limits existing immediately before the
commencement of Local Government laws in the provinces; or areas in a Cantonment; or the
Islamabad Capital Territory.
(iv)Owns immoveable property with a land area of five hundred square yards or more located in a
rating area
(v) Owns a flat having covered area of two thousand square feet or more located in a rating area;
(vi) Owns a motor vehicle having engine capacity above 1000 CC;
(vii) Has obtained National Tax Number or
(viii) Is the holder of commercial or industrial connection of connection of electricity where the amount of
annual bill exceeds rupees 9[five hundred thousand] or
(ix) Is [a resident person] registered with any chamber of commerce and industry or any trade or business
association or any market committee or any professional body including Pakistan Engineering Council,
Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of
Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan.

115. Persons not required to furnish a return of income. —

(1)[ ]
(2)[ ]

(3) The following persons shall not be required to furnish a return of income for a tax year solely by
reason of sub-clause (iii) , (iv), (v) and (vi) of clause (b) of sub-section (1) of section 114 –

114(1)(b)(iii-vi)
(iii) owns immovable property with a land area of two hundred and fifty square yards or more or
owns any flat located in areas falling within the municipal limits existing immediately before the
commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad
Capital Territory.
(iv)Owns immoveable property with a land area of five hundred square yards or more located in a
rating area
(v) Owns a flat having covered area of two thousand square feet or more located in a rating area;
(vi) Owns a motor vehicle having engine capacity above 1000 CC;

(a) A widow;
(b) An orphan below the age of twenty-five years;
(c) A disabled person; or
(d) In the case of ownership of immovable property, a non-resident person.
(4) Any person who is not obliged to furnish a return for a tax year because all the person‘s income is
subject to final taxation under sections 5, 6, 7, 148, 151 and 152, sub-section (3) of section 153, sections
154, 156 and 156A, sub-section (3) of section 233 or sub-section (3) of section 234A shall furnish to the
Commissioner a statement showing such particulars relating to the person’s income for the tax year in such
form and verified in such manner as may be prescribed.

(4A) Any person who, having furnished a statement, discovers any omission or wrong statement therein,
he may, without prejudice to any other liability which he may incur under this Ordinance, furnish a revised
statement for that tax year, at any time within five years from the end of the financial year in which the
original statement was furnished.

(5) Subject to sub-section (6), the Commissioner may, by notice in writing, require any person who, in his
opinion, is required to file a prescribed statement under this section for a tax year but who has failed to do
so, to furnish a prescribed statement for that year within thirty days from the date of service of such notice
or such longer period as may be specified in such notice or as he may, allow.
(6) A notice under sub-section (5) may be issued in respect of one or more of the last five completed tax
years

2013 P T D 324
[Federal Tax Ombudsman]
Before Dr. Muhammad Shoaib Suddle, Federal Tax Ombudsman
USMAN MAJEED CHOHAN
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.585/LHR/IT (435)/1086 of 2012, decided on31st October, 2012.
(a) Income Tax Ordinance (XLIX of 2001) ---
----Ss.121, 115(3)(b) & 114(1)(vi)---Best judgment assessment---Purchase of motor vehicle---
Noncompliance of notice under S.114 of the Income Tax Ordinance, 2001---Ex parte assessment---
Taxpayer contended that he being an orphan and below 25 years in age at the time of acquisition of motor
vehicle, was not required to file return of income; and Assessing Officer unjustifiably ignored the statutory
stipulation and illegally finalized assessment---Validity---Amendment in S.114(1)(vi) of the Income Tax
Ordinance, 2001 required all owners of motor vehicles of 1000cc engine capacity and above to file a
return of income was introduced through Finance Act, 2009and became effective from tax year 2010
whereas the taxpayer purchased the motor vehicle in tax year 2009---Further, complainant being an
orphan and less than 25 years of age on the date the motor vehicle was purchased enjoyed exemption from
filing the return---Complainant was not required to file a return for tax year 2009 as he enjoyed exemption
under S.115(3)(b) of the Income Tax Ordinance, 2001---Amendment in S.114(1)(vi) of the Income Tax
Ordinance, 2001 was brought on the statute through Finance Act, 2009 and became effective from tax year
2010---Complainant was not required to file a return in tax year 2009---Complainant was also not allowed
reasonable time to respond to statutory notices---Invocation ofS.121 of the Income Tax Ordinance, 2001
being against the statute and contrary to law was tantamount to maladministration under S.2(3) of the
Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000---Federal Tax Ombudsman
recommended that Federal Board of Revenue direct the Commissioner to invoke revisionary jurisdiction
under S.122A of the Income Tax Ordinance, 2001, and decide matter afresh, as per law, after hearing the
complainant.
(b) Establishment of the Office of Federal Tax Ombudsman Ordinance (XXXV of 2000) ---
----S. 2(3) ---Maladministration---Opportunity of being heard---Complainant contended that he was not
given reasonable time to respond to notices served on him as Federal Board of Revenue
Circular/Instructions stipulated that at least 15 days be allowed for compliance whereas he was given only
12 days---Validity---Department failed to allow reasonable time to the complainant to respond to statutory
notices which tantamount to maladministration.
(c)Establishment of the Office of Federal Tax Ombudsman Ordinance (XXXV of2000) ---
----Ss.9 & 2(3) ---Jurisdiction, functions and powers of the Federal Tax Ombudsman---When
maladministration was present, the Federal Tax Ombudsman exercised concurrent jurisdiction.

Writ Petition No.11545 of 2012 rel.

Muhammad Munir Qureshi, Advisor Dealing Officer.
Riaz Ahmad Raja, ITP Authorized Representative.
Muhammad Qaswar Hussain, DCIR Departmental Representative.
FINDINGS/RECOMMENDATIONS

DR.MUHAMMAD SHOAIB SUDDLE (FEDERAL TAX OMBUDSMAN) ---This complaint is against

alleged illegal assessment made under section 121 of the Income Tax Ordinance, 2001 (the Ordinance) for
Tax Year 2009.

2. The complainant purchased a motor vehicle (Toyota Corolla Model 2009) forRs.1, 269,000. As he
did not file the required Return of Income, he was served with a notice under section 114 of the Ordinance.
The notice was not complied with and so ex parte assessment was finalized under section 121 of the
Ordinance. The complainant contends that as per stipulation obtaining in section 115(3)(b) of the
Ordinance, he being an orphan and below 25 years in age at the time of acquisition of the motor vehicle in
question, was not required to file a Return of Income. The Assessing Officer unjustifiably ignored the
statutory stipulation and illegally finalized assessment under section 121 of the Ordinance. Further, he was
not given reasonable time to respond to the notices served on him. He pointed out that CBR Circular
instructions stipulated that at least 15 days be allowed for compliance whereas he was given only 12
days.
3. When confronted, the Deptt. Filed a reply raising a preliminary objection that the Hon'ble FTO did not
have jurisdiction to admit the complaint for investigation as the complainant had the remedy of filing an
appeal before the first appellate authority open to him. On merits, the Deptt. said that the complainant was
misconceived in his view that section 115(3)(b) of the Ordinance applied in his case and he was not required
to file a Return.

4. Both sides have been heard and the record examined.

5. The preliminary Departmental objection has been examined and found to be misconceived for the reason
that when maladministration was present the Hon'ble FTO exercised concurrent jurisdiction as held by the
LHC in judgment dated13-9-2012 (Writ Petition No.11545 of 2012). In the present case, Departmental
failure to allow reasonable time to the complainant to respond to statutory notices is tantamount to
maladministration). On merits, the amendment in section 114(1) (vi) of the statute requiring all owners of
motor vehicles of1000cc engine capacity and above to file a Return of Income was introduced through
Finance Act, 2009 and became effective from Tax Year 2010 whereas the complainant purchased the motor
vehicle in question in Tax Year 2009.Furthermore, the complainant being an orphan and less than 25 years
of age on the date the motor vehicle was purchased enjoyed exemption from filing the Return.
Findings:
6. The complainant was not required to file a Return for Tax Year 2009 as he enjoyed exemption under
section 115(3) (b) of the Ordinance. The amendment in section114 (1)(vi) of the Ordinance was brought on
the statute through Finance Act,2009 and became effective from Tax Year 2010. The complainant was thus
not required to file a Return in Tax Year 2009. Also, the complainant was not allowed reasonable time to
respond to statutory notices. Departmental invocation of section 121 of the Ordinance being against the
statute and contrary to law is tantamount to maladministration under section 2(3) of the FTO Ordinance.
Recommendations:
7. FBR to direct the Commissioner to -
(i) Invoke revisionary jurisdiction under section 122A of the Ordinance, and decide the matter afresh, as
per law, after hearing the complainant; and
(ii) Report compliance within 30 days.

CMA/194/FTO Order accordingly.