FBR tells PTI’s Tareen to pay Rs 199.1m tax on concealed income

LAHORE: The Federal Board of Revenue (FBR) this week detected a concealed income of Rs 648.258 million which Pakistan Tehrik-i-Insaf (PTI) Secretary General Jahangir Tareen had covered up from his tax returns in 2011 to evade a tax amounting to Rs. 199.1 million due to him and instead managed to pay only Rs 7.781 million. 

FBR authorities were led towards this tax evasion when they found a glaring discrepancy in the taxable agriculture income declared by Tareen in his returns for the year 2011 submitted along with his nomination papers before 2013 general elections and in the income tax returns he had filed in the FBR for the year 2011. This revelation led to a reassessment proceedings initiated by Assistant Commissioner Inland Revenue Unit-01 Zone III, RTO, Lahore, which lasted for three months during which Jahangir Tareen refrained from appearing before officers holding the proceedings to contest his case, and his lawyers continued requesting to adjourn the proceedings for later dates citing various reasons, revealed the judgment issued by the competent authorities which held the proceedings. 

According to the FBR order, after allowing adjournments for two months, the authorities denied further adjournment and the proceedings finally resulted in the conclusion that he had concealed Rs 648 million and evaded a tax of Rs 199.1 million. As a result, FBR authorities issued an order on August 8, 2016, ordering him to pay Rs 199,103,224 (199.1 million), the tax he allegedly evaded. Separate proceedings for imposition of penalty under relevant laws are also being initiated against him which, under the law, is the same amount which was evaded by the taxpayer. 

According to the FBR order, Jahangir Tareen had claimed that larger chunk of his agricultural income was exempted from tax because he drew it from the lands he had leased from local farmers in districts Rahimyar Khan and Rajanpur, while a smaller chunk was from self-owned land. But the investigation carried out by the FBR revealed that in majority of the 27 leased agreements, his lawyers had provided the leased area mentioned either much larger than the actual land ownership of the respective landlords or the person mentioned as landlord owned no land at all. 

The order said that some of the lease agreements were not recorded in the land records or relevant registration authorities. The claims of tax exemptions, because most of those lease agreements pertained to tehsil Rojhan which was declared calamity-hit by the authorities due to high flooding, were not found to be substantiated by the FBR authorities. Similarly, the order said that the claims of the taxpayer that he drew majority of his income from the sale of sugarcane in that tehsil was also unsubstantiated since the sugarcane crop is harvested after more than one year of sowing and harvesting time was not within the period for which the area was declared calamity-hit. 

Tareen, while talking to The News, said he had already appealed against the FBR order which would come up for hearing Monday. He called the FBR order ‘politically motivated, illegal and mala fide’. He said he and his lawyers were not given chance of hearing or reply and the judgment was made ex parte. 

Tareen recalled that the FBR authorities sent him a notice previous month questioning his returns filed for the year 2010. But his lawyers replied to the queries forcing the FBR to close the case. ‘This time they were forced to pass order without giving me an opportunity to reply,’ he said, adding he hoped that this illegal order would also be set aside on hearing of his appeal.