The Federal Tax Ombudsman (FTO) has ruled that obtaining tax deposits from taxpayers during proceedings under Section 175C of the Income Tax Ordinance, 2001, without subsequently determining liability through the prescribed legal process, constitutes maladministration.

The complaint was filed by the owner of Noor Surgical Hospital in Abbottabad, who alleged that Inland Revenue officials recovered a substantial amount under coercive circumstances without any lawful assessment or determination of tax liability, according to a statement issued on Tuesday. During proceedings before the FTO, the department produced no speaking order, assessment order or other legal determination establishing the alleged default or tax liability.