Federal Tax Ombudsman (FTO) inquiry commission report submitted in the Supreme Court of Pakistan on December 6 had determined Rs 119.6203 billion as tax evasion against Malik Riaz, Dr Arslan Iftikhar and Ahmed Khalil. Adviser, TI-Pakistan, Syed Adil Gilani in his letter sent on December 29 to Secretary (IR-Operations), FBR, Syed Jaffer Raza Kazmi has drawn his attention to TI-Pakistan letter sent to Chairman, FBR on December 8 requesting him to take "immediate measures in accordance with the rules and regulations to recover the amount from Malik Riaz, Dr Arslan Iftikhar and Ahmed Khalil on account of tax evasion determined by FTO."
TI-Pakistan has disputed the following reply received from the FBR saying: "this is not what the TI-Pakistan had requested the Chairman." The FBR reply reads as under: "I am directed to refer to your letter dated December 11 on the above subject (provision of information in case of Riaz-Arslan-Khalil), and to state that providing the desired record/information is barred by section 216 of the Income Tax Ordinance 2001."
Disagreeing with the reply, Gilani replied that "this is an attempt to avoid action against the tax defaulters, M/s Riaz-Arslan-Khalil, as TI-Pakistan had not requested for any tax record of Riaz-Arslan-Khalil, but had requested FBR to take immediate measures in accordance with the rules and regulations to recover from them the Government of Pakistan's revenue of Rs 119.6203 billion".
He also requested the FBR that besides recovering the amount, "to take action against the three tax evaders/defaulters for concealment of income determined by the Federal Tax Ombudsman, under section 192 A of the Income Tax Ordinance 2001 which reads as under:
Section 192A. Prosecution for concealment of income. (1) Where, in the course of any proceedings under this Ordinance, any person has either in the said proceedings or in any earlier proceedings concealed income or furnished inaccurate particulars of such income and revenue impact of such concealment or furnishing of inaccurate particulars of such income is five hundred thousand rupees or more shall commit an offence punishable on conviction with imprisonment up-to two years or with fine or both.
(2) For the purposes of sub-section (1), concealment of income or the furnishing of inaccurate particulars of income shall include;
(a) The suppression of any income or amount chargeable to tax;
(b) The claiming of any deduction for any expenditure not actually incurred; or
(c) any act referred to in sub-section (1) of section 111.]
The Secretary FBR should know, Gilani said that any action to provide benefit by any government servant (who is a public office holder under NAB Ordinance 1999), which could have been prevented by exercising his authority is a corrupt act under Section 9 quoted below:
(vi) ) [if he misuses his authority so as to gain any benefit or favour for himself or any other person, or [renders or attempts to render] [or wilfully fails to exercise his authority to prevent the grant, or rendition of any undue benefit or favour, which he could have prevented by exercising his authority];(vii) if he has issued any directive, policy, or any SRO (Statutory Regulatory Order) or any other order which grants or [attempts to grant] any [undue] concession or benefit in any taxation matter or law or otherwise so as to benefit himself or any relative or associate or a benamidar [or any other person]"
Adil Gilani further requested that action may be taken against the officers under NAO 1999 who did not act against the tax defaulters M/s Riaz-Arslan-Khalil under Section 192 A of the Income Tax Ordinance 2001, and caused loss to the exchequer by not recovering the amount even after TI-Pakistan had at the right time informed FBR in September 2010 about this major tax evasion by Malik Riaz Hussian.
Transparency International Pakistan is striving to have transparency in procedures and Rule of Law in Pakistan, which is the only way to eliminate corruption and have good governance in the country, he said.
Copies of the letter have been forwarded for action under the rules and regulations to Chairman, Public Accounts Committee, Islamabad, Federal Tax Ombudsman, Islamabad, Dr Abdul Hafeez Shaikh, Federal Minister of Finance, Islamabad, Chairman, FBR, , Islamabad, and Registrar, Supreme Court of Pakistan, Islamabad.