The Federal Tax Ombudsman (FTO) has termed the conduct of an RTO Islamabad assessing officer as arbitrary, unfair and contrary to law after a tax refund claim was rejected without properly considering the taxpayer’s reply and supporting evidence. The matter involved a refund claim for Tax Year 2016, where the taxpayer had already responded to a notice under Section 170(4) of the Income Tax Ordinance, 2001.
The FTO observed that the department neither disputed receipt of the taxpayer’s reply nor demonstrated that the supporting documents had actually been examined before rejecting the refund. The absence of a proper hearing and failure to address the taxpayer’s submissions were considered inconsistent with the principles of natural justice and fair administration.
For taxpayers, the decision reinforces an important principle: a refund claim cannot simply be rejected without due consideration of the taxpayer’s response and evidence. The FTO has directed the department to revisit the order and pass a fresh decision after providing an adequate opportunity of hearing. This highlights the importance of maintaining a complete documentary trail and properly responding to refund-related notices.