FBR files two cases of massive tax evasion

ISLAMABAD: After unearthing multimillion rupees tax evasion, the FBR has filed two cases against the owner of Islamabad’s leading school and investor for alleged concealment of income and assets.
Special Ju0dge Customs, Taxation and Anti-Smuggling Rana Aftab on Thursday admitted two cases filed by FBR’s Directorate General of Intelligence and Investigation Inland Revenue and summoned the accused for next hearing on September 17, 2015.
For the first time in the country’s taxation history, the Directorate of Intelligence (IR) was able to file two major cases of income tax concealment before the court.
In the first case, the FBR submitted that a proprietor of a school in Islamabad is an existing taxpayer. The accused has filed returns of income for tax years 2010, 2011, 2012 and 2013 u/s 114 of the Income Tax Ordinance, 2001 and declared net income of Rs463,739, Rs1,295,936, Rs1,755,634 and Rs3,731,278 respectively.
The accused has filed wealth statements u/s 116 of the Income Tax Ordinance, 2001 for the years ending on 30.06.2010, 30.06.2011, 30.06.2012 and 30.06.2013 declaring net wealth of Rs16,265,000, Rs18,572,888, Rs19,040,000 and Rs22,150,000 respectively.
During the course of investigation, an analysis of the taxpayer’s record available with the ITMS and information obtained through third party sources, including scrutiny of various bank accounts, it has been established that the taxpayer has furnished inaccurate particulars and also suppressed the material facts required to be disclosed under the law in her wealth statement u/s 116 of the Income Tax Ordinance, 2001 verified by her to be true. She has thus made misstatement and concealment of facts, which warrants prosecution proceedings as envisaged in sections 192 of the Income Tax Ordinance, 2001.
Undeclared and concealed bank accounts: The taxpayer has concealed crucial information and receipts in her returns of income to evade taxes. This office obtained complete bank statements in respect of the taxpayer’s bank accounts and found that many bank accounts have not been declared by the taxpayer. Credit entries in bank accounts are found to be extraordinary and do not commensurate with the declared business receipts of the taxpayer.
Mis-statement on account of property in Diplomatic Enclave: The taxpayer has declared the value of property Plot No.15, Diplomatic Enclave, Islamabad, in her wealth statements at Rs.90,000,000.
However, a copy of the actual sale deed of the said property has been obtained which reveals that the actual purchase price of the said property has been mis-declared by the taxpayer in as much as the sale deed executed between the sellers and the accused purchaser i.e the taxpayer. The actual price stood at Rs166,000,000 but the declared value stood at just Rs115,500,000.
In view of the above, the FBR’s complaint is submitted under Section 203(1) of the Income Tax Ordinance, 2001 for trial by this Hon’ble Court under Section 203 read with section 192 of the Income Tax Ordinance, 2001.
The second case is related to concealing assets owned by the offender and allegedly furnishing inaccurate particulars of assets in the statement filed u/s 116 of the Income Tax Ordinance, 2001 and making false declaration and verification on form prescribed for statement u/s 116 of the said ordinance.
Details of the case revealed that an accused is carrying on business of sale and purchase of immovable property in Rawalpindi. The accused filed returns of income for Tax Years 2010, 2011, 2012 and 2013 under section 114 of the Income Tax Ordinance, 2001 and declared taxable income of Rs500,878, Rs2,317,715, Rs4,110,000 and Rs6,995,100 respectively .
The accused also filed wealth statements u/s 116 of the Income Tax Ordinance, 2001 for the years ending on 30-6-2010, 30-06-2011, 30-6-2012 and 30-06-2013 declaring net wealth of Rs.Rs.16,265,000, Rs.18,572,888, Rs.19,040,000 and Rs22,150,000 respectively.
According to the FBR, inquiry by the complainant’s office revealed that the accused has furnished inaccurate particulars of his assets and willingly did not declare his bank accounts being maintained by the accused.
The accused has made huge investment of Rs61,256,500 in Zaraj Housing Scheme, Rawalpindi, during the tax years 2010 to 2014, however, the said investments have not been declared in his wealth statements for the said tax years.
The FBR stated that the accused thus knowingly and willfully furnished inaccurate particulars, fake declaration and verified fake document and has thus committed an offence u/s 192 of the Income Tax Ordinance, 2001.
Scrutiny of the declared as well as concealed bank accounts reveal that the taxpayer has also concealed huge cash amount for the period relating to tax years 2009 to 2014.
However, when it was compared with the declarations of the taxpayer in wealth statements, huge amount of undeclared cash in bank was detected.
An amount of Rs257,693,902 thus remains totally unexplained and surely is a deliberate attempt/act on part of the taxpayer to conceal this amount from levy of tax thus attracting the provisions of 192 of the Income Tax Ordinance, 2001.
Apart from huge unexplained credits as mentioned in paras-3 and 5 of the complaint, the taxpayer without any doubt has intentionally and dishonestly concealed the following amounts in his wealth statements as on 30-06-2010, 30-06-2011, 30-06-2012, 30-06-2013 & 30-06-2014.
a) Undisclosed balance in bank accounts Rs257,693,902
b) Investment in 96 undisclosed plots in Rs.61,256,500
Zaraj Housing Scheme, Rawalpindi
Total: Rs318,950,402
The investigation has thus established the involvement of the accused in concealing the true particulars of his income/assets and verification of false documents.