The Federal Tax Ombudsman (FTO) has raised significant concerns over the excessive valuation of immovable properties and has instructed the Federal Board of Revenue (FBR) Member Inland Revenue (Policy) to address and rectify these errors as a top priority.
According to an order issued by the FTO on Thursday, the FTO has also mandated the Member Inland Revenue (Policy) to hold meetings with stakeholders and the complainant to address grievances regarding the excessive property valuation. The FTO has suggested revising the valuation table if necessary.
The FTO further directed the Member-IR (Policy) to resolve the pending application dated July 10, 2023, on its merits after providing a proper hearing, and to report compliance within 60 days.
The complaint involved an “unrealistic” high valuation stated in FBR notification No. 1180(1)12022 dated 27.07.2022 for Agro Farms CDA Scheme-Ill, Sihala, Islamabad. The complainant, the lessee of Plot No. 05, Agro farm/poultry, and vegetable (P & V) scheme-Ill, Sihala, expressed concerns about the valuation of the 80 Kanals plot allotted by the Capital Development Authority (CDA) Islamabad.
The FTO noted that the delay in addressing the complainant’s application from July 10, 2023, by the Member (Policy), and the failure to respond to the concerns amounted to maladministration as per section 2(3)(i)(ii) of the FTO Ordinance, 2000.
In its findings, while disposing of its own motion No. 0033/OM/2023, the FTO pointed out that neither the FBR nor its field formations had developed any consistent method for valuation that could be followed by valuation committees. Moreover, no anomaly committee was established to address stakeholders’ concerns in case of inconsistencies or incorrect valuations. The relevant Directorate General was also found non-functional, failing to add value to the process.
These shortcomings led to inconsistencies, inappropriate valuations, undervaluation/overvaluation, and arbitrary exercise of powers, all of which constitute maladministration under section 2(3)(i)(b) and (ii) of the FTO Ordinance, 2000. The FTO recommended corrective measures, including developing SOPs for property valuation, forming anomaly committees, hiring competent evaluators, and scheduling periodic revisions of valuation tables.
The investigation revealed serious errors by the valuation committee in determining the valuation table for Agro Farms, Sihala Scheme-Ill, which failed to address the complainant’s genuine grievances, resulting in inconsistent and inappropriate valuations. The valuation of properties in Agro Farms, Scheme-Ill, was significantly increased from Rs. 2 million per kanal to Rs. 4 million per kanal. Despite claims of consultation with property dealers, the department did not provide details of the valuation committee’s composition or its methods.
The complainant’s representation to the Member-IR (Policy) on July 10, 2023, regarding the excessive valuation went unaddressed, with no reasons provided for the high valuation. The FTO’s directives aim to correct these procedural and administrative flaws to ensure fair property valuation practices.
