Taxation

Complaints to the Federal Tax Ombudsman: what the FTO can and cannot do about FBR maladministration

Many tax grievances are not really about how much tax is due. They are about a refund that has sat undecided for months, a bank account attached before the demand was final, or an application that nobody will process. Those are the cases the Federal Tax Ombudsman (FTO) was created for. Businesses looking for the best tax lawyer in Pakistan to deal with an FBR delay often assume the only options are an appeal or a writ petition, but where the problem is maladministration rather than the merits, a complaint to the FTO can be quicker and more targeted. This guide explains the FTO's jurisdiction, the procedure and the limits the High Court of Sindh has placed on the office.

The legal framework

The office was created by the Establishment of the Office of Federal Tax Ombudsman Ordinance, 2000 (Ordinance No. XXXV of 2000, the FTO Ordinance), published in the Gazette on 11 August 2000. Its procedure was later supplemented by the Federal Ombudsmen Institutional Reforms Act, 2013 (the 2013 Act), which applies to all federal ombudsmen and, under its section 24, prevails over the FTO Ordinance to the extent of any inconsistency, as the High Court of Sindh noted in East West Insurance Co. Ltd. v. President of Pakistan, C.P. No. D-5884 of 2017, decided on 22 August 2019.

Under section 9(1) of the FTO Ordinance, the FTO may investigate any allegation of maladministration on the part of the Revenue Division or any tax employee. The investigation may start on a complaint by an aggrieved person, on a reference by the President, the Senate or the National Assembly, on a motion of the Supreme Court or a High Court, or on the FTO's own motion. The jurisdiction covers the federal taxes administered by the FBR: income tax, sales tax, federal excise and customs.

Provincial taxes are a different matter. Sindh sales tax on services is administered by the Sindh Revenue Board, a provincial body, so complaints about the SRB fall outside a jurisdiction defined by reference to the federal Revenue Division. The SRB regime is covered in our guide to Sindh sales tax on services.

What counts as maladministration

Section 2(3) of the FTO Ordinance gives a wide definition. It covers a decision, process, recommendation, act of omission or commission which is contrary to law, rules or regulations or departs from established practice or procedure; is perverse, arbitrary, unreasonable, unjust, biased, oppressive or discriminatory; is based on irrelevant grounds; or involves the exercise of powers, or the failure or refusal to exercise them, for corrupt or improper motives. It also includes, among other things:

• neglect, inattention, delay, incompetence, inefficiency and ineptitude in administering tax laws;
• repeated notices, unnecessary attendance or prolonged hearings in assessment, classification or valuation cases, refund claims and claims to concessions or exemptions;
• wilful errors in determining refunds, rebates or duty drawbacks, and deliberate withholding or non-payment of refunds, rebates or drawbacks already determined;
• coercive methods of tax recovery where default in payment is not apparent from the record; and
• avoidance of disciplinary action against an officer whose order of assessment or valuation has been held by a competent appellate authority to be vindictive, capricious, biased or patently illegal.

The definition is about how the department has behaved, not whether its view of the law is correct. That distinction runs through every FTO case.

What the FTO cannot decide

Section 9(2) of the FTO Ordinance removes two categories from the FTO's jurisdiction:

• Sub judice matters: matters pending before a court of competent jurisdiction, tribunal, board or authority on the date the complaint, reference or motion is received.
• Appealable merits: matters relating to assessment of income or wealth, determination of liability to tax or duty, classification or valuation of goods, or interpretation of the law on those subjects, where legal remedies of appeal, review or revision are available under the relevant tax law.

Section 9(3) also bars complaints by tax employees about their own service matters, and section 10(2) bars anonymous or pseudonymous complaints.

The practical consequence is that the FTO is not an alternative appeal forum. If the grievance is that an assessment is wrong, the remedy is an appeal, explained in our guide to the income tax appeal route. If the grievance is that an appeal effect order has not been issued, that a refund has not been processed, or that recovery has been enforced in breach of the department's own procedure, the FTO is the natural forum. Complaints that mix the two need careful drafting so that the maladministration element is clearly identified and the complaint does not ask the FTO to rule on the merits.

Because of the sub judice bar, timing matters. Filing a writ petition or an appeal on the same issue before the FTO receives the complaint can take the matter out of the FTO's hands.

Making a complaint: form, time limit and procedure

The essentials come from section 10 of the FTO Ordinance:

• The complaint must be in writing on solemn affirmation or oath and addressed to the FTO by the aggrieved person or, if he has died, his legal representative.
• It must be made within six months from the day the aggrieved person first had notice of the matter. The FTO may entertain a later complaint in special circumstances that make it proper in the interest of justice.
• Notice is issued to the Secretary, Revenue Division and to the person against whom the complaint is made. The Ordinance allows thirty days for a response, which may be extended for sufficient cause; secondary summaries of the 2013 Act describe a shorter period for the agency's written comments.
• Investigations are conducted in private, and a party may appear in person or be represented.

The FTO has the powers of a civil court for summoning witnesses and requiring documents (section 14(1)) and may require any person to provide information (section 14(2)). Under section 11(1), findings and recommendations are to be communicated to the Revenue Division within sixty days, and the 2013 Act separately requires an ombudsman to dispose of a complaint within sixty days. The High Court of Sindh has, in the context of another federal ombudsman, directed a complaint pending beyond that period to be decided within a month (C.P. No. D-211 of 2021, order of 21 April 2021).

The FTO's website provides a complaint form and online filing, and secondary sources list a regional office in Karachi. A good complaint is short and documentary: a chronology, copies of the applications or orders, proof of the dates on which they were filed or served, the specific provision of law or FBR instruction that was not followed, and the relief sought.

Typical complaints in practice

Published FTO decisions and press reports in 2026 show the kind of grievance the office regularly deals with. We describe them without names; they illustrate the type of complaint, not the outcome of any future case.

• Refunds not decided in time. In a decision reported in August 2026, an income tax refund application had remained pending beyond the sixty-day statutory period. The FTO found maladministration, directed the claim to be decided and recommended that the FBR operationalise a faceless refund system under section 170A of the Income Tax Ordinance, 2001. Our guide to income tax refunds under sections 170 and 171 explains the underlying time limits.
• Refunds not adjusted against demands. In March 2026 the FTO dealt with a refund application filed in August 2025 that was left undecided while the department sought cash payment of a super tax demand for the same year. It treated the refusal to adjust as arbitrary and recommended that super tax be recovered only after pending refunds were adjusted. A similar decision reported in April 2026 recommended that coercive recovery begin only after pending refund claims and adjustment requests are disposed of.
• Coercive recovery while appeals are pending. Press reports describe an FTO investigation into bank attachments made while appeals were pending, in which the President upheld the FTO's findings and recommended disciplinary action against the officers concerned, subject to their being heard. The legal limits on attachment are discussed in our guide to tax recovery, bank attachment and stay of demand.

Sales tax refunds, duty drawback and customs delays fall within the same definition where the problem is delay or disregard of procedure rather than the amount due.

Limits on the FTO: the High Court's approach

The office is powerful, and the High Court of Sindh has been careful to keep it within its statute. Two decisions are particularly useful for both taxpayers and officers.

In Shakeel Ahmed Kasana v. Federal Tax Ombudsman, C.P. Nos. D-4079, D-4212, D-4341, D-4353 and D-4377 of 2021, judgment dated 28 March 2023, the Court set aside letters constituting inspection teams under section 17. It described the office as a complaint redressal mechanism for individual taxpayers, held that the FTO “is not a corruption watchdog or maximizer of the tax revenue”, and held that own-motion action still requires something in the form of an allegation and cannot be a fishing and roving inquiry.

In Imran Qadeer v. Federation of Pakistan, C.P. No. D-7176 of 2022, order dated 12 October 2023, the Court set aside FTO findings against an Additional Commissioner because no notice had been issued to him under section 10(4). It held that a recommendation against a tax employee cannot be made without prior notice to that person, and that the FTO must not become the supervisory authority of all FBR employees.

Section 29 of the FTO Ordinance bars courts from questioning acts done under it, but these decisions show that the High Court will intervene under Article 199 of the Constitution where the FTO acts without jurisdiction or in breach of natural justice. Petitions of that kind are discussed in our page on litigation in the High Court of Sindh.

After the decision: implementation, review and representation to the President

Under section 11(2) of the FTO Ordinance the Revenue Division must inform the FTO of the action taken on a recommendation or the reasons for not complying. Unjustified non-compliance is treated as defiance of recommendations, which the FTO may refer to the President under section 12. Under section 22 the FTO may also award reasonable costs or compensation for loss caused by maladministration, after calling on the department or employee to show cause. Conversely, section 14(4) allows compensation to be awarded against a complainant whose complaint is false, frivolous or vexatious.

Either side may challenge the outcome:

• Review by the FTO: section 14(8) gives the FTO power to review its own findings and recommendations.
• Representation to the President: section 32 of the FTO Ordinance and section 14 of the 2013 Act allow the Revenue Division or any aggrieved person to make a representation to the President within thirty days. Under the 2013 Act, the order remains suspended for sixty days while the representation is pending, and the representation is to be decided within ninety days.

The thirty days must be counted carefully. In a decision communicated by the President's Secretariat in 2022, a representation filed against an FTO order that merely dismissed a review petition was rejected as incompetent and time-barred, relying on the Supreme Court's decision reported as PLD 2017 SC 139: time ran from the original recommendation, not from the dismissal of the review. Where the President's decision is itself challenged, the High Court reviews it on constitutional grounds rather than rehearing the complaint.

Common questions

This article is general information about Pakistani law and procedure, not legal advice for any specific matter. If this touches on something you're currently facing, get in touch and we'll advise on your facts directly.