Directorate General of Intelligence and Investigation Inland Revenue (IR) Karachi as part of a campaign to bracket high net-worth individuals into tax net and plug revenue leakage raided a modern medical centre of Karachi and impounded partial accounts and record, detecting income tax evasion of over Rs 548 million.
Sources said that the raid party comprising officers of Karachi Directorate faced severe resistance from the hospital management and staff and only part of the records could be obtained. The record has been impounded under section 175 of Income Tax Ordinance, 2001. This is one of the major enforcement actions taken by the agency in Karachi since assumption of charge by Director General I&I Khawaja Tanveer Ahmed as new head of the agency. The co-ordinated efforts of field formations and Directorate General I&I IR has resulted into major enforcement actions against the high net-worth individuals, involved in tax evasion.
The Intelligence & Investigation (Inland Revenue) team, through the initial perusal of records, has detected concealment of bank accounts where concealed receipts have been parked to the tune of Rs 643 million with the income tax evasion of over Rs 548 million. The medical centre management has understated their revenues and profits to evade income tax. It was further found that the hospital management has been mis-declaring the fee money received from patients to be much less than the actual receipts and has been evading legitimate government revenue Directorate of Intelligence & Investigation (IRS) concerned has finalised and a reference under section 203 of the ordinance against this Medical Centre Karachi. The Federal Board of Revenue is tightening the noose around the necks of high net-worth individuals, who have been maintaining parallel books of accounts and evading government's legitimate revenue.
On the directives of Director General I&I Khawaja Tanveer Ahmed, Directorate General is investigating the assets of individuals in order to assess the incomes concealed by them and to bring their hidden wealth under the tax net eventually. The said medical centre is fully equipped 200 bed facility with the latest technology to make it a benchmark hospital in healthcare standards.
Details of the case revealed that it is brought into the agency's notice that during scrutiny of tax profile of the said medical centre it revealed that the taxpayer is continuously declaring huge business losses by showing meager receipts and claiming huge expenses. On the basis of above, raid under section (U/S) 175 of the Income Tax Ordinance, 2001 was conducted on 11.3.2016 at 1500 hours, on the Hospital/ Business premises of the taxpayer company.
The management of medical center instead of co-operating and facilitating the team members, as envisaged in sub-section (3) of section 175 of the Income Tax Ordinance, 2001, resisted the action, used abusive language against the FBR and threatened the team members of dire consequences, civil suit and FIR. After repeated requests the management allowed very limited access to the team members that was confined to accounts branch only, where billing record was being maintained in respect of current tax year. The management completely refused to grant access to the central IT Server, Hospital Management Information System (HMIS), room of Director Finance, or the record room.
Resultantly, the team members thoroughly scrutinised the available partial record and found some bank accounts that had not been declared/ disclosed by the taxpayer company in their documentation. The team members completed operation and reported back to the office.
On the next working day, information was sought from the respective banks, and the apprehension of the department that the taxpayer company is involved in evasion of tax by way of suppression/ concealment of its receipts, proved to be correct. Examination of above referred bank information has revealed picture of the income/ tax affairs of the taxpayer company, sources further said.
It is worth mentioning that the directorate of intelligence IR was suspecting an action from the taxpayer company and hence the requisite record vis bank statements were procured by hand on the very next working day. This prompt and accurate action has put the directorate in a comfortable position. However, it is apprehended that the taxpayer company would try to linger on the case for indefinite period of time.
In view of ongoing facts and considering the amount of revenue involved in the instant case, the directorate is in the process of hiring services of an eminent lawyer to define the case in the court, so that evaded tax may be recovered along-with penalty and default surcharge, directorate added.
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