LAHORE: The Federal Board of Revenue (FBR) officials are systematically misusing the powers available under Section 175C of the Income Tax Ordinance, 2001 to harass taxpayers and extort money under the guise of monitoring proceedings,” said Waheed Shahzad Butt, Chairman of the Lahore Tax Bar Association (LTBA) Public Interest Litigation Committee, while commenting on the landmark FTO order recently issued by FTO Zafar Hijazi.
Details of the case revealed that the case involved the owner of a Surgical Hospital, Haripur. RTO Abbottabad officials visited his business premises armed with a notice signed by the Chief Commissioner invoking Section 175C. The taxpayer, under evident pressure, deposited Rs. 1500000.00 into the government treasury on 26 December 2025, whereupon the department abruptly discontinued all monitoring proceedings without issuing any speaking order or determining any actual tax liability.
Waheed further added that Section 175C is investigative in character and does not independently authorize coercive recovery or collection of tax without prior statutory determination of liability. The order categorically states that no departmental record explains how the figure of tax was computed and that the department’s conduct, taking money and walking away without any adjudicatory conclusion, constitutes gross administrative impropriety and maladministration under Section 2(3)(i)(b) and (ii) of the Federal Tax Ombudsman Ordinance, 2000.
Waheed Butt further observed that the case is far from an isolated incident.
“Tax collection is a sovereign function regulated strictly by law. What is happening under the pretext of Section 175C across the country is not tax collection, it is sponsored tax robbery. Officers descend on business premises, create an atmosphere of intimidation and pocket whatever amount the terrified taxpayer agrees to pay.
There is no assessment, no order, and no accountability. The FTO’s ruling must serve as a wake-up call for FBR’s leadership to put an immediate end to this racket,” Waheed added.
