FBR raids Preston University, impounds income records

ISLAMABAD: The FBR has raided Preston University Islamabad and impounded records after witnessing nil income or showing below taxable income during last four years. The preliminary investigation of tax authorities revealed that the university maintained different accounts allegedly to split income for avoidance of multi-million rupees tax.

According to details, the FBR’s Intelligence & Investigation Inland Revenues (IR) raided Preston University Islamabad after getting information that the university is running its 11 campuses in main cities of the country and offers degree programs to thousands of students in different campuses. The perusal of Income Tax returns of Preston University reveals that it is submitting several income tax returns with different names which are registered in different RTOs.  

In a letter dated 21-5-2016 by Abdul Basit, Vice Chancellor of the university confirmed that income tax returns submitted under NTN 3981825 represent of four campuses including Islamabad, Lahore main campus, Lahore technology campus and Faisalabad campus of Preston University. Upon scrutiny of returns, the Preston University showed nil income in tax year 2012, nil income in tax year 2013, below taxable income in tax years 2014 and 2015. The FBR viewed that declared version of Preston University was misrepresented, given the fact that thousands of students are enrolled in different degree programmes and alone in Islamabad campus they degree 20,000 to 25,000 per semester per student.

With the aim to collect documentary evidence of the true business affairs search of the business premises was conducted by Directorate of l&l-IR, Islamabad under section 175 of income tax ordinance, 2001. Records and computers have been impounded.

During the preliminary analysis of the impounded records the following facts are revealed. (i) Preston University maintains its main collection account No 0042-7900023003 at HBL at State Life Building Karachi wherein all proceeds of revenue from Islamabad, Karachi, Lahore, Peshawar, Faisalabad and Kohat campuses are remitted to the main collection account from their local accounts being maintained in HBL.

(ii) Financial Statements pertaining to Kohat,Peshawar, Lahore and Faisalabad Campuses, have been found from the Finance Department of Head Of  ce being maintained at House No 85, Street No 3, H-8/I Islamabad, the Islamabad Campus of te University.

(iii)Evidences have also been found that salary expenses pertaining to different campuses of the university in Karachi are being incurred/charged from a single bank account No. 0005997900354903 being maintained at HBL Shaheed e Millat Road Shahrah e Faisal Karachi.

(iv) The scrutiny of   nancial statements revealed that Preston University is maintaining parallel        nancial accounts with different versions for tax authorities, HEC and Banks.

The above facts reveal that Preston University for all its purposes of tax is a single entity but they are managing different NTNs merely to spit income.

The initial analysis of the records shows that Preston University had been concealing its business receipts to the tune of millions. The investigation and analysis of the documents are underway.