Islamabad: Federal Tax Defender Dr. Asif Mahmood Jah has discovered a unique type of scam involving tax officials who obtained information from bank account holders by issuing false/fake notices to these banks. This case reflects that some tax officials were practically involved in issuing fake notices to banks under section 176 of the Income Tax Ordinance 2001.
In a landmark investigation by Dr. Asif Jah of FTO, the FBR was instructed that manipulating communications issued under Section 176 of the Regulations to obtain information from banks amounted to mismanagement. Accordingly, the FBR should prepare specific operating procedures for regulatory approvals, particularly about requests for information from banks under section Article 176 of the Regulation through barcode messages used in field formation.
It is reliably learned that the taxpayer of a reimbursement claimant filed a complaint about tax attorney Waheed Shahzad Butt under Section 10 of the FTO 2000 Regulation abusing powers, violations of the law, fraud, and deception against claimed FBR officials sent to the Lahore Tax Office.
The FTO order states: The plaintiff, a private limited concern, has been registered with the department. According to AR, the Lahore Tax Office issued notices to several banks according to Article 176 of the Income Tax Regulations 2001 to provide information relating to the plaintiff covering different tax years.
As authorized by Zonal Commissioner IR, it stated that ACIR was concerned about collecting information for the fiscal year 2019 while requesting it for several fiscal years. Therefore, ACIR acted beyond its mandate by falsifying/mitigating a letter of approval from the CIR Zonal and seeking excessive information with malafide intent.
In addition, the above notifications were delivered to banks through an unauthorized subordinate employee, a UDC Audit-Il. As a result, the requested information was also secured, which threatened the management of the banks, but later, when the plaintiff protested, returned the data collected in this way to the banks. Based on the facts discussed, ACLR was held responsible for issuing unauthorized Section 176 notices. Furthermore, UDC found that UDC was involved in preparing a falsified approval letter from the zonal CIR.
However, it is found that neither internal correspondence between zone leaders is based on the system nor is correspondence with banks regulated by barcode messages. Manual post, particularly the regime governing legal leave under article 176 of the Ordinance, may be abused by unscrupulous subordinate officials.
In addition, the absence of inspection by the CIR/ADDL CIR and the absence of an SOP have left the ground open for criminal subordinates to commit such counterfeits for their gain. Therefore, negligence, inefficiency, and misuse of powers, as well as the unauthorized issuance of legal notices, are evident.
The manipulation of notifications issued according to Article 176 of the Regulation for the Collection of Information from the Bank (s) amounts to maladministration within the meaning of Section 2 (3) (i) and (ii) of the FTO Regulation.
The FTO has instructed the FBR to prepare a specific operating procedure for regulatory approvals, requesting information from banks under Section 176 through barcode communications for use by field training.
THE FTO ORDER ADDED, the FBR should direct Chief Commissioner Lahore to initiate disciplinary proceedings against officials, as recommended in the internal investigation report, for their deception to manipulate false statements and abuse official position.