Daily Times

The President of Pakistan Arif Alvi has upheld the decision of Hon’ble Federal tax ombudsman regarding Federal Board of Revenue (FBR’s) officers and management for their unwarranted delay in a multimillion dollar tax evasion by companies case.

The Own Motion investigation was initiated in terms of Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), because FTO Secretariat has evidence-based information that some of the most meaningful and innovative initiatives of FBR’s own individual officers and field formations stands diluted and washed away due to follow up failure, frequent posting transfers of officers and massive changes of jurisdictions. Moreover through In-House Analysis FTO Secretariat has also identified that though FBR and its dozens of field formations maintain an organized web portal, rich data center, exhaustive Data Bases, elaborate and comprehensive operational soft wares and houses a full-fledged & home grown IT support system i.e. Pakistan Automation (PVT) LTD (PRAL), yet neither FBR HQs nor its any single field formation maintains; any IT based tracking system, archiving various valuable initiatives & ventures made by different FBR’s organizations, officers, teams or specially created cells from time to time, any exhaustive, fool proof and IT enabled handing over module (from predecessors to successors) for such initiatives, any institutionalized internal follow up system, or any internal evaluation mechanism to gauge whether the goals envisaged under FBR’s flagship ventures have been logically pursued & achieved.

Therefore it was reasonably assumed that in most of the cases the good job done is wasted, diluted or compromised with the transfer of individuals dissolution of units/ cells and take over b new managers. While conducting the aforesaid In-House Analysis FTO Secretariat has information on record that a list of potential cases of tax evasion, including M/S Acid Survivors’ Foundation, along with detailed investigation Report & Case Study was prepared & shared by Directorate General (DC), BTB FBR. This valuable information was duly shared in December, 2018, with the concerned field formations for taking action against said entities for not declaring true particulars of their receipts/income and not discharging their responsibilities as withholding agents. However, in 2019, FBR management suddenly shelved this whole BTB regime overnight: disbanding BTB Zones Islamabad, Lahore and Karachi. Office of DG BTB was relegated to a ceremonial entity assigned as additional charge. Thus in addition to losing an effective organization, the repository of the whole above data/information was suddenly rendered extinct. In view of above internal Notice under section 10(4) of the FTO Ordinance, 2000, read with Section 9(1) of The Federal Ombudsman Institutional Reforms Act, 2013 was issued calling upon FBR and its field formations to furnish Para-wise comments in the aforementioned case. In response to the said notice the Chief Commissioner-IR, CTO, Islamabad furnished an update regarding action taken vide his letter No. 174 dated 23.12.2021. It has been informed that consequent upon receipt of Notice from FTO office; audit proceedings have been initiated for determining discharge of obligation as withholding agents. Notice under Rule 44(4) of Income Tax Rule, 2002 for Tax Year 2014 and 2015 has been issued.Notice u/s 161/205 of Income Tax Ordinance, 2001 for Tax Years 2016, 2017 and 2018 was issued for compliance by 31.12.2021.

The aforementioned action report clearly establish that information passed by DG BTB in December, 2018 remained dormant unutilized and wasted. None of the field officers of FBR holding jurisdiction over the instant case during December, 2018 and November, 2021 was vigilant enough to initiate the action which has been initiated after 03 years and that too after the intervention of FTO Secretariat. It was found that negligence and inefficiency on the part of FBR officials in enforcing various provisions of law in major revenue potential cases is tantamount to maladministration in terms of Section 2(3)(ii) of the F TO Ordinance. FTO recommended FBR to to direct the Chief Commissioner-IR, CTO, Islamabad to ensure that action initiated in the instant case, after 03 years delay is expedited and finalized on priority basis;identify the officers who are responsible for unwarranted delay and FBR management may be informed accordingly.