ISLAMABAD: The Federal Tax Ombudsman (FTO) has flagged a possible “benami” tax payment arrangement after income tax deductions on commercial electricity consumption were recorded against the CNIC of an unrelated salaried taxpayer.
The FTO raised the issue while disposing of a complaint filed by Uzair Hanif Awan, a WAPDA employee serving in IESCO, who discovered through the Federal Board of Revenue (FBR) portal that tax had been deducted and deposited against his CNIC under Section 235 of the Income Tax Ordinance, 2001.
According to the complaint, tax payments totalling more than Rs1.55 million were recorded against his CNIC between September 2025 and June 2026, despite the complainant having no ownership, connection or association with any commercial electricity meter or business.
The disputed tax deductions were recorded through several CPRs, including Rs10,421 in September 2025, Rs64,973 in October, Rs38,223 in November, Rs39,867 in December, Rs56,025 in January 2026, Rs601,437 in March, Rs369,527 in April and Rs371,334 in June.
The complainant told the FTO that he had no commercial or industrial electricity connection and requested that the actual consumer responsible for the tax payments be identified, the incorrect entries against his CNIC removed and the tax credits transferred to the correct taxpayer.
FBR finds CNIC was used incorrectly
The Regional Tax Office (RTO) Rawalpindi told the FTO that the complainant was a salaried employee of WAPDA/IESCO and that tax on his salary was regularly deducted under the relevant provisions of the Income Tax Ordinance.
The RTO said its verification found that the tax deducted under Section 235 did not relate to any commercial electricity connection owned or operated by the complainant.
According to the RTO, the available information indicated that the complainant’s CNIC had apparently been used inadvertently when PSIDs and CPRs were generated for tax payments relating to an actual commercial electricity consumer.
It further stated that it had neither generated the disputed PSIDs nor processed the CPRs and therefore lacked the administrative or technical authority to alter or delete the CNIC recorded in already generated CPRs.
FTO raises ‘benami’ tax payment concern
The FTO, however, expressed serious concern over the matter, describing it as an “eye opener” and highlighting what it termed an altogether new phenomenon in which electricity was consumed by one person or unit while the corresponding tax deduction under Section 235 was channelled through another person.
The FTO observed that the arrangement “appears to be a benami tax payment”, which might be aimed at concealing the production of the actual consumer.
The Ombudsman further noted that the issue could extend beyond the incorrect use of a taxpayer’s identity. It said production corresponding to the electricity units consumed by the actual consumer may also have remained outside the declared record.
The FTO criticised the response of RTO Rawalpindi as evasive and said the concerns raised in the complaint remained unresolved.
FTO identifies actual commercial consumer
The complainant identified M/s Rawal Poultry Feeds (Pvt) Ltd, a taxpayer registered with LTO Islamabad, as the actual commercial electricity consumer.
According to the complaint, the company operates a major poultry feed manufacturing plant at Rikhari Kalan on the Balkasar-Talagang Road in District Chakwal.
The complainant also stated that he had previously reported similar activity to IESCO and the FBR, but no corrective action had been taken.
The FTO held that the failure to address the matter amounted to maladministration under the Federal Tax Ombudsman Ordinance, 2000.
FTO directs FBR and IESCO to investigate
The FTO directed the FBR to take several measures to resolve the matter and determine whether the electricity consumption was properly reflected in the tax records of the actual consumer.
The LTO Islamabad has been directed to examine the record of M/s Rawal Poultry Feeds (Pvt) Ltd and determine whether production corresponding to the electricity bills paid by the unit, but incorrectly tagged to the complainant, had been declared for income tax and sales tax purposes.
The CIR (Withholding), LTO Islamabad has also been directed to examine IESCO’s billing system governing tax deductions under Section 235 to determine whether the case was an isolated incident or part of a wider pattern.
Furthermore, IESCO has been directed to correct its internal records by recording the Section 235 tax payments against the actual consumer and delinking the complainant from transactions made by that consumer.
The FTO directed the relevant authorities to submit a compliance report within 45 days.
The case was disposed of on the basis of the available record following a hearing held on July 28, 2026.
