Transcript
APPEALS AND REFERENCES FEDERAL TAX OMBUDSMAN
Appeals
Appeal to the Commissioner (Appeals) (Sec.127)
Provided:
Amount of tax due under section 137 has been paid and
Appeal shall be filed:
In prescribed form
Verification
Grounds of appeal
Prescribed fee
Within 30 days of the date of service of the order against which appeal is filed
Prescribed Fee--In case of appeal against assessment order / notice
•Lesser of $.1000 or
•10% of tax assessed
In any other case:
•Companies to pay rupees one thousand
•Others rupees two hundred only
Procedure in appeal (Sec.128)
CIT shall give notice of hearing to the appellant and to the commissioner. CIT, if satisfied may allow an appellant to file any new ground of appeal.
CIT (Appeal) shall not admit any documentary material or evidence which was not produced before he commissioner unless the commissioner (Appeal) is satisfied that appellant was prevented by sufficient cause from producing such material or evidence before the commissioner.
Decision in Appeal (Sec.129)
Commissioner of appeal may:
Confirm, modify or annul assessment order.
Order to be passed within three month of date of filing appeal, otherwise the relief sought by the appellant in the appeal shall be treated as having been given.
Appointment of the Appellate Tribunal (Sec. 130)
Appellant tribunal shall consist of a chair person, judicial members and accountant members as are appointed by the Federal Government.
Qualification of a judicial member:
The person who has exercised the powers of a District Judge and is qualified to be a Judge of a High Court; or
Is or has been an advocate of a High Court and is qualified to be a Judge of a High Court.
Qualification of an accountant member:
The person who is an officer of an income tax group equivalent in rank to that of a regional commissioner
Appeal to Appellate Tribunal (Sec. 131)
Appeal shall be:
In the prescribed form; Verified in the prescribed manner Accompanied by prescribed fee
The prescribed fee shall be in case of appeal in relation to an assessment order lesser of:
Two thousand five hundred rupees or 10% of the tax accessed or In any other case-
•If appellant is an company, two thousand rupees; or
•Where appellant is not a company, five hundred rupees
Appeal to be filed within sixty days of the order of the commissioner (Appeals) Maximum period for staying recovery of tax not beyond six months
The appellate tribunal shall decide appeal within 6 months of its filing.
The appellate tribunal shall communicate its order to the tax payer and the commissioner.
Reference to the High Court (Sec. 133) on a Question of Law
Reference to High Court may be filed within 90 days of the communication of the order of appellate tribunal.
The aggrieved person or the commissioner may prefer an application, in the prescribed form along with a statement of the case, to the high court, stating any question of law arising out of such order.
Division Bench of High Court to hear reference application.
High court to deliver the judgment and copy is sent to Tribunal for giving effect to its judgment.
Fee of rupees one hundred shall be paid by a person other than the commissioner.
Burden of proof in appeals (sec. 136) on Tax Payers:
In case of assessment order on the tax Payer, to the extent to which order does not correctly reflect tax payer’s liability for the tax year; or
In the case of any other decision that the decision is erroneous
Alternate Dispute Resolution
An aggrieved person may apply to CBR for the appointment of a committee for the resolution of any hardship or dispute in connection with any matter pending before an appellate authority
CBR shall appoint a committee for resolution of a dispute consisting of the following: o An officer of an income tax
o Two persons from a panel comprising of Chartered accountants or cost accountants, Advocates, income tax practitioners, or reputable tax payers.
The committee after conducting inquiry and
Seeking expert opinion shall make recommendations in respect of the dispute, as it may deem fit.
CBR may on recommendations of the committee, pass such order as it may deem appropriate.
The order passed by CBR in the light of recommendation of the committee shall be submitted before that authority, tribunal or the court where the matter is subjudic for consideration and orders as deemed appropriate.
If tax payer is not satisfied with the said order he may continue to pursue his remedy before the relevant Authority, Tribunal, or Court.
Federal Tax Ombudsman
This office was established by the “Establishment of the Office of the Federal Tax Ombudsman,Ordinance, 2000”, promulgated by the president on 11/08/2000.
Object:
“To diagnose, investigate, redress and rectify any injustice done to a person through mal-administration by functionaries administering tax laws”.
The term “mal-administration” includes:
A decision, process, recommendation, act of omission or commission which-
Is contrary to law, rules or regulations or is a departure from established practice or procedure, unless it is bona fide and for valid reasons;
Is perverse, arbitrary or unreasonable, unjust, biased, oppressive, or discriminatory;
Is based on irrelevant grounds; or Involves the exercise of powers, or the failure or refusal to do so, for corrupt or improper motives, such as bribery, jobbery, favoritism, nepotism and administrative excesses;
neglect, inattention, delay, incompetence, inefficiency and ineptitude, in the administration or discharge of duties and responsibilities;
Repeated notices, unnecessary attendance or prolonged hearings while deciding cases involving-
Assessment of income or wealth;
Determination of liability of tax or duty;
Classification or valuation of goods;
Settlement of claims or refund, rebate or duty drawback; or
Determination of fiscal and tax concessions or exemptions
Wilful errors in the determination of refunds, rebates or duty drawbacks;
Deliberate withholding or non-payment or refunds, rebates or drawbacks already determined by the competent authority;
Coercive methods of tax recovery in cases where default payment of tax or duty is not apparent from record; and
Avoidance of disciplinary action against an officer or official whose order of assessment or valuation is held by a competent appellate authority to be vindictive, capricious, biased or patently illegal
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Characteristics:
Independent from executive
All executive authorities throughout Kenya shall act in aid of the Federal Tax Ombudsman.
Easy accessibility to the complainant
Impartiality and fairness
Credibility of review process
Quick disposal
Implementation of recommendation, decision or order of Federal Tax Ombudsman mandatory duty of Central Board of Revenue
Jurisdiction
The jurisdiction of the Federal Tax Ombudsman (FTO) extends to all Federal Taxes and the Revenue Division being the administrative unit responsible for the conduct of the business of the Federal Government, its Offices and agencies.
Exercise of jurisdiction
The jurisdiction can be exercised by the FTO:
On a complaint by an aggrieved party
On a reference by the President
On a reference by the Senate
On reference by the National Assembly
On a motion of the Supreme Court in a proceeding pending before it
On a motion of the High Court in a proceeding before it
(vii)On his own motion
The jurisdiction cannot be exercised into matters, which are:
Sub juristic or
relate to assessment of income, wealth, duty, tax liability, classification or valuation of goods, interpretation of law rules and regulation in respect of which remedies of appeal reviews or revision are available under the law and
Service matter of the employees or Revenue Division
Procedure for approach:
• Any aggrieved person can send his application/letter duly attested on solemn affirmation, written on a plain paper. Anonymous complaints are not entertained.
Complaint should be filed not later than six months from the date complainant had notice of the matter. In special circumstances time can be extended by FTO.
After scrutiny of complaint notice is issued to Central Board of Revenue (CBR) for reply. On receipt of reply hearing is fixed and mostly cases are disposed on in 60 days except those, which require recording of evidence or involve deeper investigation. Federal Tax Ombudsman makes Recommendation/Finding.
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Implementation of Recommendation/Finding:
Unlike similar statutes, this Ordinance provides:
“It shall be the duty of the Revenue Division and Tax Employees to implement the findings made under Sections 11 and 12 within thirty days of such decision being communicated to the concerned Tax Employees”.
If the CBR fails to comply with the Recommendation/Findings within the specified time or does not give reason to the satisfaction of the Federal Tax Ombudsman it is treated as Defiance of Recommendation.
If there is a defiance of Recommendation by a Tax Employee;
The Federal Tax Ombudsman may refer the matter to the President who may in his discretion direct the Revenue Division to implement.
A report by the Federal Tax ombudsman shall become part of personal file or character roll of the Tax Employee, primarily responsible for defiance.
Such Tax Employee shall be liable for contempt.
The Federal Tax Ombudsman has the same powers as the Supreme Court has to punish any person for its contempt.
Reference
Any person aggrieved by the finding/Recommendation of the Federal Tax Ombudsman can file representation to the President.
