ISLAMABAD: The Federal Tax Ombudsman (FTO) has declared the search operation conducted by the Regional Tax Office (RTO) Sukkur against The Indus Hospital, Larkana, and related complainants as illegal, directing tax authorities to return all seized records, documents and computer hardware taken during the operation.
The decision was issued on a series of complaints filed by The Indus Hospital and several doctors/specialists against the Commissioner Inland Revenue, Zone-II Larkana, RTO Sukkur, regarding a search carried out under Section 175 of the Income Tax Ordinance, 2001.
The complainants had alleged that FBR officials entered the hospital premises on June 18, 2026, and took into custody laptops, books of accounts, documents and other business records.
They further claimed that no proper inventory, seizure memo, acknowledgement or detailed list of seized material was provided, except an informal receipt relating to two laptops. The FTO observed that the seized material included confidential and sensitive information related to hospital affairs and raised concerns regarding documentation, confidentiality and data security due to the manner in which the records were taken and retained.
In its findings, the Ombudsman examined the legal requirements for searches under Section 175 of the Income Tax Ordinance, including the need to specify the provision being enforced, identify pending legal action against the taxpayer, and provide reasons for the search authorization.
The FTO Zafar Hijazi held that the authorization issued by RTO Sukkur did not fulfil these requirements, stating that it did not specify the relevant provision of the law, did not mention any pending legal proceedings against the complainants, and did not contain reasons for conducting the search.
The order stated that the search authorizations and actions against the complainants’ premises were illegal in light of the cited judicial decisions and constituted maladministration under the Federal Tax Ombudsman Ordinance, 2000. The FTO Zafar Hijazi directed RTO Sukkur authorities to return all records, documents and computer hardware taken during the search and restrained the department from using the seized material as evidence for determining the complainants’ tax liability.
The Ombudsman also ordered that relevant court decisions be circulated among FBR field formations and training academies for compliance and guidance, with a report on implementation required within 30 days.
