Benami transactions, misuse of taxpayers’ CNICs: FTO directs FBR to investigate cases

ISLAMABAD: Federal Tax Ombudsman (FTO) has directed the Director General Anti-Benami Initiative, Federal Board of Revenue (FBR) to investigate the cases involving Benami transactions wherein the fraudsters have fraudulently misused CNICs of innocent taxpayers.

In this connection, the FTO has issued instructions to the FBR here on Tuesday.

According to the FTO’s order, all these twenty vehicles were not purchased by the complainant but the CNIC of the complainant was misused by various car dealers and individuals mostly residing in Karachi by using CNIC of the Complainant of Distt Kashmore. On the contrary unfortunately, the Deptt did not bother to investigate the details of investment from the car company - the manufacturer of these vehicles.

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Not a single letter was issued to the manufacturer to confirm the nature, type & source of payment against purchase of these vehicles. The AR of the complainant neither argued the merit of the case before DCIR nor before the Commissioner Appeal. As a result, the complainant was imposed tax liability of Rs4,008,450 and Rs5,415,100 for tax years 2020 and 2021 respectively against concealment of income (unexplained source of investment on purchase of twenty vehicles).

Failure to investigate the original source of investment against purchase of vehicles from the manufacturer of vehicles on misuse of CNIC of the complainant causing administrative excesses tantamount to maladministration, FTO order stated.

The complaint was filed against the Commissioner (Appeal) Sukkur in terms of Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance) for alleged illegal appellate order confirming the assessment orders of the deputy commissioner Inland Revenue imposing tax liability of Rs4,008,450 and Rs5,415,100 for tax years 2020 and 2021 respectively against purchase of 20 vehicles misusing the CNIC of the complainant.

The Complainant, an individual running the business of Oil Expeller and Grain Merchant filed return of income tax for tax years 2020 and 2021 declaring income of Rs456,000 and Rs400,000 respectively. The RTO Sukkur received information in respect of tax evasion by car dealers from FBR House. As per information, the complainant purchased vehicles worth Rs13,519,000 in his name during tax year 2020 and Rs17,586,000 during tax year 2021.

On merit it was contended that on the basis of information received from Board, the Unit Officer initiated proceedings and passed the assessment orders u/s 122(1)(5) read with section 11 1(1)(b)!(d)(i) of the Ordinance imposing tax liability of Rs4,008,450 and Rs5,415,100 for tax years 2020 and 2021 respectively.

The Commissioner (Appeals) Sukkur also confirmed the assessment orders of DCIR vide order dated 13.02.2023. Since the complainant had already availed the remedy available under the law, therefore the instant complaint was unlawful; hence liable to be rejected. The FBR should direct the Commissioner (Appeals) Sukkur to rectify the impugned order dated 13.02.2023 on his own or on an application from the complainant on its merit in accordance with the law, DFTO order added.

Copyright Business Recorder, 2023