RTO delayed lawful income tax refund: FTO

Business Recorder reported that the Federal Tax Ombudsman found the Regional Tax Office in Rawalpindi to have committed maladministration by holding back a valid income tax refund for more than 21 months. The refund arose from a Tax Year 2017 demand that the Lahore High Court, Rawalpindi Bench, had set aside, and the department had already recovered the money through a bank attachment.

The Ombudsman reasoned that the court judgment dated 13.11.2024 erased the demand from the outset, which made the recovered sum refundable at once. It also dismissed the department's argument that a fresh claim had to be filed first under Section 170, calling that position legally flawed.

Under the order, the department itself must carry out the appeal effect and issue the refund plus statutory compensation, so the taxpayer need not submit repeated applications. The FTO has directed the FBR to ensure the Commissioner releases the money with compensation under Section 171 and reports compliance within 30 days. The long wait was described as the product of delay, inaction and ineptitude.