ISLAMABAD: In a major embarrassment for the tax authorities, the Federal Tax Ombudsman (FTO) has strongly censured the Federal Board of Revenue (FBR) for issuing a tax concealment notice to a woman over a car purchase she never made, exposing alarming gaps in verification and enforcement mechanisms.
In a detailed ruling, the FTO declared the assessment order issued by the FBR as maladministration, stating that the department failed to properly investigate the actual source of funds used to purchase the vehicle, resulting in harassment of an innocent taxpayer.
CNIC misused for car purchase
The case revolves around Mrs. Marium Atif, a salaried individual, who was served a tax notice in June 2025 for allegedly concealing the purchase of a Toyota Corolla 2018 model worth Rs2.049 million during tax year 2019. The FBR imposed a tax liability of Rs67,350, despite her written denial and repeated claims that she neither booked nor paid for the vehicle.
The FTO inquiry revealed that her CNIC was fraudulently used to purchase the car, while all payments were made from a bank account belonging to Mr. Farrukh Saleem, a resident of DHA Karachi and a registered taxpayer.
Bank & manufacturer records expose fraud
Investigations conducted by the FTO uncovered that two pay orders totaling Rs2.094 million were issued from Sindh Bank’s Muhammad Ali Society branch from an account maintained by Mr. Farrukh Saleem. Further verification from Indus Motor Company Limited confirmed that the booking and payment details did not match the complainant’s financial profile.
Despite being summoned by the FTO, the accused individual failed to appear or submit any explanation, strengthening the case of deliberate identity misuse and financial fraud.
FBR accused of negligence & ineptitude
The FTO sharply criticized the FBR for failing to perform basic due diligence, stating that not a single verification letter was sent to the car manufacturer or the bank before finalizing the tax assessment.
The ruling noted that simple verification could have prevented unnecessary litigation, mental stress, and reputational harm to the complainant.
“The department exercised its powers in a careless, unjust, and unreasonable manner, penalizing an innocent citizen for the fraudulent acts of others,” the order stated.
Criminal action recommended against accused
The FTO has directed the FBR to:
• Revisit and withdraw the illegal tax assessment order.
• Initiate criminal proceedings against Mr. Farrukh Saleem for CNIC misuse and financial fraud.
• Examine the tax profile of subsequent vehicle owners, including individuals currently unregistered with FBR.
• Counsel and discipline the concerned tax officials for negligent handling of third-party data.
• Submit a compliance report within 45 days.
Growing threat of CNIC misuse in Pakistan
The case highlights a growing trend of CNIC misuse in vehicle purchases, raising serious concerns over identity theft, tax evasion, and systemic weaknesses in regulatory oversight.
Tax experts warn that without robust digital verification systems, tighter coordination between banks, manufacturers, and regulators, and real-time data validation, innocent citizens will continue to face financial and legal harassment.
Call for urgent system reforms
The FTO’s ruling is being viewed as a landmark decision that could force sweeping reforms in FBR’s third-party data processing and verification protocols, ensuring greater transparency, accountability, and taxpayer protection.
As Pakistan pushes toward digital governance and financial inclusion, the case underscores the urgent need to secure citizens’ identity data and prevent systemic abuse, safeguarding public trust in national institutions.
