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A resident of Alberta, Canada, has posed a question through email that deserves a detailed and satisfactory reply. The statement quoted in this mail, though based on misunderstanding, reflects sadly on the conduct of rulers and elected members who, after openly defying the laws ask the concerned officials and whistle-blowers "how was information leaked and obtained?" The apex watchdog in tax matters, the Federal Tax Ombudsman (FTO) on the contrary, has asked Federal Board of Revenue (FBR) to publish tax declarations of all public office holders as law places no bar on it.

The real test now will be that of Chairman FBR - whether he complies with the recommendation of FTO or chooses to ignore it. Unfortunately, many people who claim to be authority on the Constitution of Pakistan reaffirm the wisdom contained in an age-old Urdu idiom neem hakeem khatra-e-jaan (a quack poses threat to human life). On the basis of their half-cooked knowledge, we will have to substitute the word hakeem with alim (scholar) - one having inadequate knowledge of the supreme law of the land posing disastrous results for the democratic setup and rule of law in a country that has always been vulnerable to dictatorial and authoritarian dispensations.

The text of the query posed by Pakistan-origin-Canadian citizen is: "Yesterday [31 December 2012] I was listening to [a leading anchor] while he was interviewing Dr Tahir. He said that there is nothing specific in constitution or law to punish those who do not submit tax returns. I am surprised to hear this. How can this be correct? Can you please confirm that there is nothing in law to take them to court for non-compliance? Note: I am not related to law studies; professionally I am an engineer here in Alberta, Canada. I am just interested in day to day affairs of Pakistan..."

In reality, TV anchor did not say that there was nothing in the law to deal with tax delinquents. He was just saying that this country had a prime minister without National Tax number (NTN) and nothing happened. That anchor further argued that even the known corrupt against whom the apex court ordered proceedings under the law survived and rewarded, what to talk of punishing non-filers of income tax returns. Responding to this, Dr Tahir-ul-Qadri quoted Article 62(f) of Constitution that debars such elements from contesting elections.

In the Income Tax Ordinance, 2001, the following specific punitive provisions exist that deal with tax delinquents who fail to file their tax returns:

Section 182(1) - offences and penalties

"Any person who commits any offence specified in column (2) of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under this Ordinance or any other law, be liable to the penalty mentioned against that offence in column (3) thereof:

"Explanation.- For the purposes of this entry, it is declared that the expression "tax payable" means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under sections 120, 121, 122 or 122C".

Section 182(2) reads as under:

"The penalties specified under sub-section (1) shall be applied in a consistent manner and no penalty shall be payable unless an order in writing is passed by the Commissioner, Commissioner (Appeals) or the Appellate Tribunal after providing an opportunity of being heard to the person concerned: Provided that where the taxpayer admits his default he may voluntarily pay the amount of penalty due under this section".

As we mentioned in our column of 21 December 2012, on discovering lapse on the part of legislators, it was the duty of FBR to promptly issue notices under the law to all those who failed to file their tax returns with wealth statements. If it is true that 70% of Pakistani legislators - members of Senate and National Assembly - violated section 114 and 116 of the Income Tax Ordinance, 2001 then FBR is equally guilty - what has prevented the concerned Commissioner(s) to issue notices under section 114(3) and 116(1) of the Income Tax Ordinance, 2001 to these defaulters? The act of non-filing of return and wealth statement attracts prosecution proceedings as well which are contained in section 191(1)(a) of the Income Tax Ordinance, 2001. It reads as under:

191. Prosecution for non-compliance with certain statutory obligations

Any person who, without reasonable excuse, fails to:

(a) comply with a notice under sub-section (3) of section 114 or sub-section (1) of section 116;

(b) .....................

shall commit an offence punishable on conviction with a fine or imprisonment for a term not exceeding one year, or both.

In case the default of non-filing of return and wealth statement continues even after punishment under section 191(1)(a), sub-section (2) of section 191 provides further action as under:

(2) If a person convicted of an offence under clause (a) of sub-section (1) fails, without reasonable excuse, to furnish the return of income or wealth statement to which the offence relates within the period specified by the Court, the person shall commit a further offence punishable on conviction with a fine not exceeding fifty thousand rupees or imprisonment for a term not exceeding two years, or both".

The above provisions of the Income Tax Ordinance, 2001 are unambiguous and more than adequate to deal with tax delinquents. These have, unfortunately, not been invoked in the case of holders of public office as they represent the mighty section of society who have made things worse by calling leakage of information as "breach of privilege". Further worsening the situation, some self-assumed scholars claiming to be authority on everything - from religion to law, from morality to constitution - are telling us that since laws are not being implemented "they are justified to take things directly in their hands". This is the worst one can expect from legislators, FBR and champions of reforms! Many supporters of "reformation movement" (sic) of Dr Tahir-ul-Qadri are sitting in the Senate and Parliament and have allegedly not filed income tax returns and wealth statements. How can they justify joining the cause of purging elected houses? They are not even eligible to sit either in the Senate or Parliament.

In all the leading democracies of the world, laws exist which ensure that people seeking votes are representatives of the masses and should be men of character. Discharging of tax obligations is a requirement of law of the land (reproduced above) and its violation by any individual attracts provisions of Article 62(f) of the Constitution of Pakistan which says: "A person shall not be qualified to be elected or chosen as a member of Majlis-e-Shoora (Parliament) unless he is sagacious, righteous and non-profligate, honest and ameen, there being no declaration to the contrary by a court of law". Can a violator of income tax law escape the operation of this provision even when no action is taken by FBR against him and it is incontrovertible that he did not file income tax return and wealth statement required under the law?

Dr Tahir-ul-Qadri in his first address on arrival from Canada told us that heaven would not fall if elections were not held in time as Article 254 of the Constitution condones any delay. In his second address in Karachi on the first day of 2013, he threatened the government of turning Islamabad into the world's largest Tahrir Square on 14 January 2013. Is it permissible under the supreme law of land to enforce compliance of Article 62(f) through such means? The law gives every citizen of Pakistan the right to file a petition before Election Commission for any violation by any elected member. Why did Dr Tahir-ul-Qadri and his supporters never bother to file petitions against tax cheats sitting in houses? How can they pick provisions of constitution in isolation? It is a well settled principle of constitutional interpretation that the Constitution must be read as an organic whole and all its provisions must be harmoniously reconciled instead of picking out inconsistencies between different provisions - Full Court decision of Supreme Court in Muhammad Nawaz Sharif v. President of Pakistan PLD 1993 SC 473.

Instead of adopting the constitutional and legal procedures, option for millions' march towards Islamabad and paralysing the elected government, is nothing but creating 'fas'ad-fil-Ardh' in the name of "reforms" and "revolution".

Undoubtedly, the government during its tenure has failed to protect the life and property of people. It has created a mess of everything; especially its criminal act of making the lives of the poor miserable is simply unpardonable but sadly, the self-acclaimed reformers intend to create further disorder in the name of morality and reforms. They should adopt legal course and contest elections. If they really want to make Pakistan an egalitarian state - they also want to add the term Islamic with it - the best way is to mobilise the people on a concrete agenda. They have no blueprint for change and empowerment of the poor, mere rhetoric of revolution and nothing else. By thriving on money provided by the poor, they are indulging in extreme hypocrisy, failing to realise how the incongruity between their words and deeds expose their true designs.

In Quran, the emphasis is on taqwa (piety) in all spheres of life. Leaders have to be role model for all others - they should be able to set standards for the rest of the citizens. Pakistan, presently a ballooning state, requires a bold and clean leadership. Dr Tahir-ul-Qadri first of all should declare his own and his team's as well as his institution's account (both local and global), public. As we have been highlighted time and again in these columns, the starting point of transparency and accountability in Pakistan should be making public, tax and asset declarations of all holders of public office, judges, generals and high-ranking civil bureaucrats. This would pave the way for a clean system of governance that entails accountability and transparency.

It is not out of place to mention that two important nominees of Barack Obama in his first term - Tom Daschle and Nancy Killefer - withdrew their names after it emerged that they failed to keep their taxes in proper order. Let the government tell us if it knows how many, working with the President and Prime Minister, have no problems with taxes. We, being practising tax lawyers and having long experience as tax administrators, can say without any fear of contradiction that majority of them will be disqualified if we implement the democratic tradition followed by Barack Obama after landslide and historic victory in 2008 by admitting that he "screwed up" by nominating tax delinquents.

Our rulers, on the contrary, take pride in rewarding known corrupt and offenders by giving them important public offices. This is why our history is that of 'Barren Years'-phrase aptly adopted as title of book containing editorials and columns by a great Pakistani journalist late Mazhar Ali Khan, written as editor of Viewpoint. All interested in making Pakistan a just society, including Dr Tahir-ul-Qadri and his supporters, must read Barren Years.

The agenda of change, even from a pure moralistic point of view, must start from one's self and own house. Those who are accusing others of tax avoidance are required to first prove that they have discharged their own liabilities diligently. There cannot be selective accountability and escape from law by using the attractive slogan of "change" or "reform" nor in their garb can anyone be allowed to rise above law by claiming himself to be a custodian (self-acclaimed) of morality and religion.

If in the name of 'people's parliament', any individual can override the constitution and parliament, the logical next step would be establishing "people's court" overruling the existing judiciary. In the name of 'rule of law' nobody should be allowed to create 'a rule against law'. Populism, manoeuvred through money and ideological fantasies of superiority of any kind, leads to fascism. Constitutional democracy may not be perfect, system of governance may be deficient, but the only option for meaningful change is through vote, the real expression of people's will and not by 'show of strength' on streets when the regime, though highly incompetent and corrupt, is ready to go for fair and independent polls. The illegal throw of government at this stage will give yet another gift of false martyrdom to Zardari et al which they do not deserve at all. They will blame "establishment" once again, using Dr Tahir-ul-Qadri as proxy. For their poor performances, the present governments in the Centre and provinces are liable to be kicked out by the power of vote - a real democratic revenge!

(The writers, lawyers and partners of HUZAIMA & IKRAM (member Taxand) are Adjunct Faculty Members at Lahore University of Management Sciences (LUMS)


Section of The

Ordinance to

S. Offences. Penalties. which offence

No has reference


(1) (2) (3) (4)


1. Where any person fails to Such person shall pay a 114, 115, 116

furnish a return of income penalty equal to 0.1% of the and 165

or a statement as required tax payable for each day of

under section 115 or default subject to a minimum

wealth statement or penalty of five thousand

wealth reconciliation rupees and a maximum

statement or statement penalty of 25% of the tax

under section 165 within payable in respect of that tax

the due date. year.


Copyright Business Recorder, 2013

the author