KARACHI: The Federal Tax Ombudsman, Abdur Rauf Chaudhry, has advised Federal Board of Revenue (FBR) Chairman Nisar Muhammad to reconsider the unbridled powers given to the Directorate General Intelligence and Investigations.
“Over the last one year, there have been a number of complaints filed in this office against excesses committed by Intelligence and Investigations Directorate General while conducting inquiries on some information about tax fraud/evasion”, according to FTO who issued a detailed judgement disposing of the complaint filed by M/s Master Tiles & Ceramic Industries Limited.
According to details of the judgement, M/s Master Tiles and Ceramic Industries filed a Complaint No 53/ISD/IT(39)648/2015 with FTO Secretariat against the DG Intelligence and Investigations FBR.
The complainant, a private limited company dealing in manufacturing of tiles/ceramics, is aggrieved at alleged maladministration committed by the respondent officials by resorting to defamation/vilification campaign of the complainant and initiating proceedings which were allegedly out of jurisdiction. The complaint was sent for comments to Secretary, Revenue Division, in terms of Section 10(4) of the FTO Ordinance 2000. In response, the FBR submitted its comments vide letter dated 8-6-2015.
Additional Director Intelligence and Investigation Intelligence and Invesigations Inland Revenue Lahore received information about a 100 kanals farm house in Bahria Town Lahore owned by the three directors of the complainant company, purchased for Rs 250 million. It was found that three residential houses were built on this farm by these directors of the company at a cost of approx Rs 423.60 million. The inquiry conducted by the concerned officers revealed that these concerned officers revealed that these properties were not declared in the wealth/reconciliation statements of the three directors.
During the inquiry proceedings, wealth statements were revised twice-first on 7.1.15 and then on 1.3.15 for tax years 2009 to 2015. The departmental offices claimed to have discovered substantial difference/discrepencies in the declared and revised wealth/reconciliation statements.
While explaining the discrepencies it was claimed by the Directors that an amount of Rs 230.3 million was gifted to three Directors by two persons namely Muhammad Khurram Taj and Muhammad Humayun Khan. They were not related to them and were alleged by the respondents to be benami bank account holders of the company.
It has also been alleged by the Directorate Intelligence and Investigations that these two donors were actually employees of the company who had no independent financial means to run separate business of billions of rupees. The departmental officers issued notices to the complainant company stating that sale transaction appearing in the alleged benami bank accounts of these two persons amounting to over 10 billion were actually undeclared/concealed sales of M/s Master Tiles and Ceramic Industries Ltd.
The complainant has alleged that Additional Director Intelligence and Investigations was not legally authorized to conduct such an inquiry and therefore his actions were unlawful and arbitary. It has also been alleged that some information about tax matters of the complainant was intentially leaked to the press and electronic media portraying the company and its Directors as tax evaders and such act amounted to defamation and vilification of the complainant and its directors which required cognizance under the provisions of Section 2(3) of the FTO Ordinance 2000.
This was done to damage the complainant’s reputation and business who was real local manufacturer/competitor of vested interests (importers of tiles).
The DRs contended that their returns for tax years 2009 to 2013 were managed to have been filed in RTO Lahore with back entries. The investigation about filing of their returns in RTO Lahore revealed that a DCIR, an inspector and an UDC were found guilty of entering of entering the back-dated returns of these donors in RTO Lahore just to prove that they were regular taxpayers.
These officials were found guilty of tampering the record and committing fraud and they were suspended and now all the three officials have been dismissed. The DR averred that the inquiry report of three officials was sent by DG I&I to the Chairman FBR for taking disciplinary action against them as they misused their authority.
The DG Intelligence and Investigations filed an affidavit with solemn affirmation that he never released/leaked or caused to be released/leaked in any manner to the press or media any information or material relating to the complainant or its Directors.