ISLAMABAD, JULY13: The Federal Tax Ombudsman (FTO) has once more instructed the Federal Board of Revenue (FBR) Member Inland Revenue (Policy) to address the matter of exorbitant property valuation in various regions of the nation.
In addition, the FTO ordered Member Inland Revenue (Policy) to meet with the complaint and stakeholders to discuss their concerns about overvaluation of property and, if necessary, adjust the value table. This directive was given on Thursday.The FTO has instructed the Member-IR (Policy) to provide a legal chance for a hearing before disposing of the pending application dated July 10, 2023, and to report compliance within 60 days.
The complaint was made against the “unrealistic” high valuation for Agro Farms CDA Scheme-Ill, Sihala, Islamabad, as stated in FBR notification No. 1180(1)12022, dated July 27, 2022. The complainant additionally claimed to be the lessee of Plot No. 05, Sihala acres/80 Kanals, allocated by the Capital Development Authority (CDA) of Islamabad, under the Agro farm/poultry and vegetable (P & V) scheme-Ill.
Furthermore, in accordance with section 2(3)(i)(ii) of the FTO Ordinance, 2000, the Member (Policy)’s inability to address the complainant’s concerns and the delay in processing the complainant’s application dated 10.07.2023 amount to maladministration.
The FTO office found that neither the FBR nor the field formations had made any such attempts, nor had they devised any methodology that the valuation committees within their purview could use, when ruling on own motion No. 0033/OM/2023. Furthermore, no standing anomaly committee has been established at any level to address stakeholder complaints in the event that committees discover anomalies or render incorrect valuations. Furthermore, because the appropriate Directorate General was still non-functional, it was unable to provide any value.
It was discovered that these omissions contributed to a lack of an acceptable valuation process, which in turn caused inconsistent valuation, improper valuation, undervaluation or overvaluation, and the arbitrary use of authority. According to the FTO Ordinance, 2000’s section 2(3)(i)(b) and (ii), each of these errors amounts to maladministration. As a result, FBR in the current value table mandates remedial actions, for which the relevant suggestions were provided.
It was suggested that the Member (Policy Wing) create standard operating procedures (SOPs) with acceptable techniques for valuing real estate and form standing anomaly committees at the necessary levels to handle stakeholder complaints on valuation-related matters. Additionally, it was advised that the Member (Policy) create a program for the regular review of the valuation tables and engage qualified and seasoned valuers to accurately and transparently value properties.
It was discovered that the valuation committee had committed serious errors in determining the Agro Farms, Sihala Scheme-Ill valuation table. These errors prevented the committee from addressing the complainant’s legitimate grievances, which led to inconsistent, inappropriate, undervalued, overvalued, and arbitrary power exercises. According to the FTO Ordinance, 2000’s section 2(3)(i)(b) and (ii), each of these errors amounts to maladministration.
It has been noted that the aforementioned SRO significantly increased the valuation of property in Agro Farms, Scheme-Ill, from Rs 2 million per kanal to Rs 4 million per kanal. According to the government, the valuation committee determined the value after consulting with developers and real estate dealers/builders. The department did not, however, share the minutes or the makeup of the valuation committee.
Furthermore, the government was unable to disclose the property valuation methodology it used to establish the market value of the Agro Farms, Sihala Scheme-Ill property. Regarding the valuation approach used by the valuation committee which boosted the valuation of farms and land by 100% of the value determined by the deputy collector/CDA the DR was unable to respond.
It should be noted that on July 10, 2023, the complainant also filed a representation to the Member-IR (Policy), FBR, informing him of the high valuation. The agency hasn’t responded to the complaint, though, and hasn’t explained why the valuation was so high.
