AMLA 2010: Any amount not considered as taxable not necessarily laundered money: SHC

ISLAMABAD: A division bench of the Sindh High Court (SHC) has held that any amount which is not accounted for or not considered as taxable amount is not necessarily be laundered money, under the Anti-Money Laundering Act, 2010.

The division bench has disposed of a number of constitutional petitions filed against combined notices issued by the deputy director Intelligence and Investigation under the provisions of Section 176 of the Income Tax Ordinance, 2001 as well as under the Anti-Money Laundering Act, 2010.

Taimoor Ahmad Qureshi, advocate, who was the counsel in three writ petitions, when contacted, explained that the deputy director Intelligence and Investigation Directorate, Karachi, issued summons under Section 176(1)(b) of the Income Tax Ordinance, 2001 read with Section 9(1) of the Anti-Money Laundering Act, 2010, wherein, it was confronted that the taxpayer is maintaining various bank accounts in which huge amounts have been credited during the last three years, which does not commensurate with taxpayer’s tax profile.

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It was further confronted that apparently there is tax evasion and money laundering for which the taxpayer can be prosecuted under both the Acts and in case of unsatisfactory reply, FIR will be lodged.

Taimoor observed that since the notice was without jurisdiction; therefore, a writ petition was filed before the SHC and initially, proceedings were stayed and now the petitions have been disposed of with the observations:“The moot question, however, remains that the department by taking the advantage of the provision went on to travel beyond the aforesaid provision primarily required for evidence and explanation by conceiving the undisclosed amount as laundered moony. No one could deny powers and jurisdiction of the concerned officer requiring explanation of an amount which is not taken into consideration for taxation purpose. However, it is a preconceived idea that such amount is considered as laundered money. Some of the proceeds/amounts which may at a given time formed part of the account, as it came in and gone out of the account and was not taken into account for taxation purpose and the assessee may have reasons to explain, however, it may require an explanation from an assessee first. We are clear in our minds, that unless and until such explanation is forwarded and an opportunity is given to the Petitioners to explain the unaccounted amounts, not made part of a taxable income, it would be premature to consider the amount as laundered money. Non-declaration of an asset by an assessee under the Ordinance is not a scheduled offence, unless proved otherwise as required under the relevant law which in this case is Anti-Money Laundering Act, 2010 which requires an independent exercise.”

Copyright Business Recorder, 2021