Daily Times

The Own Motion (0M) investigation was initiated through exercise of jurisdiction under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) to look into the registration of two fake companies in Sales Tax since 2008 individual, wherein original CNIC of the complainant was snatched along with mobile phone on 17.07.2007 and subsequently following two fake companies were registered with FBR at Karachi

Later on, another entity M/S M.K. Enterprises was registered in sales tax vide ST RN: 1700312887919 on 07.03.2012 against the same CNIC, having registered address Plot No. 1723/376-C, Baldia Town, Karachi FIR was timely lodged and concerned field formations of FBR were duly informed yet neither any corrective measure was taken nor were the external fraudsters and their internal cohorts identified and pursued. The snatched CNIC was used for establishing fake business entities, registration in income tax through IRIS, sales tax registration, opening bank accounts, filing & claiming income tax / sales tax refunds. Even the latest ‘Taxpayer’s Profile Inquiry’ in IRIS was showing jurisdiction of RTO-I Karachi and reflecting status as:The current status reflected that the fraudsters had been using CNIC of the complainant and conducting business since 2008 with the connivance of department. The above state of affairs paints a very pathetic picture of FBR’s internal controls and vigilance. Following areas are noteworthy;The complainant’s repeated intimations flagging the snatching of CNIC didn’t raise any alert for years and years and only after the intervention of this office the fake units were suspended/de-registered. Deep slumber is evident.The whole burden has been shifted to one Inspector, who is already out of service. If departmental version is to be believed, no one else in the hierarchy appears to be party to this blatant case of tax fraud. It means the remaining statutory and supervisory tiers are just cosmetic, allowing an Inspector to hijack the whole regime. Thus far, neither any effort has been made to identify the real beneficiaries of this fraud, nor officials/officers dealing with the fraudulent units were named or questioned. In short it is a perfect case of maladministration in terms of section 2(3)(i)(d) & (ii) of FTO Ordinance. 2000. FBR is directed to;assign the instant case to Directorate General I&I-IR for a professional inquiry in the light of discussions above; and report compliance within 60 days.