ISLAMABAD: The Federal Tax Ombudsman (FTO) has raised serious questions over the handling of a six-year-old tax refund case involving a public sector organisation attached to the Pakistan Air Force, observing what an ordinary taxpayer could expect if such an organisation was treated in this manner.
The observation was made in findings on a complaint filed by the Directorate of Estate Projects, Nur Khan Base, Chaklala Cantt, Rawalpindi, against the Revenue Division.
The FTO found that the assessing officer at the Regional Tax Office (RTO) Islamabad had passed a refund rejection order without properly considering an earlier reply and supporting documents already available on the record. The Ombudsman termed the conduct arbitrary, unfair and contrary to law, and held that the omission amounted to maladministration under the Federal Tax Ombudsman Ordinance.
According to the case record, the dispute related to a refund application for tax year 2016. The complainant had earlier approached the FTO over the department’s failure to decide the pending application. That complaint was decided in February 2026 with directions to the tax department to dispose of the matter strictly in accordance with law.
The record showed that RTO Islamabad had issued a notice under Section 170(4) of the Income Tax Ordinance in August 2020. The complainant submitted a detailed reply along with supporting documents the following month.
However, the FTO observed that the department did not deny receiving the reply and did not produce material to show that the reply and supporting evidence had been examined before the refund claim was rejected in June 2026.
The Ombudsman noted that the rejection order did not discuss the complainant’s reply or record findings on the documentary evidence submitted. According to the FTO, the order appeared to have been passed without hearing the complainant and without properly addressing material already available on the record.
The Ombudsman described the matter as a classic case of departmental disregard for law and fairness. It also noted that despite the passage of six years, no fresh notice under the relevant provision was issued before the new decision.
The complainant had sought a recommendation for issuance of the refund with compensation and also requested disciplinary action against the assessing officer.
In its written comments, RTO Islamabad maintained that a refund order had already been passed under Section 170(4). The FTO, however, confined its findings to whether the material and earlier reply had been properly considered before the order was issued.
The Ombudsman did not itself order payment of the refund. Instead, it recommended that the Federal Board of Revenue direct the Commissioner Inland Revenue, Refund Zone, RTO Islamabad, to revisit the disputed order and pass a fresh decision after giving the complainant an adequate opportunity of hearing.
The Chief Commissioner Inland Revenue, RTO Islamabad, was also directed to obtain an explanation from the officer who authored the June 2026 order and share it with the FTO.
The department was directed to report compliance within 30 days.
The findings relate to the handling of this specific refund case and do not by themselves establish misconduct beyond what the FTO formally recorded in its order.
