No immunity to close relatives under Benami Act

ISLAMABAD: The Benami Act will not grant immunity to unexplained assets and banking transactions of close relatives but their legitimate assets will be protected.

“The unexplained or illegitimate assets will not get immunity from Benami Act. This Act will become applicable from Feb 2017 when this law was passed by the parliament,” FBR’s Member Inland Revenue Service (Policy) Hamid Ateeq Sarwar along with other members told journalists in press briefing here on Thursday.

He said that the benami transactions took place from Feb 2017 onwards could be investigated and prosecuted under this law. It would not be applicable retrospectively i.e. before February 2017, he added. The FBR, he said, approved three Commissioners Inland Revenue at Karachi, Lahore and Islamabad to deal with the benami cases. When asked about foreign assets held by Pakistanis abroad, he said there were conditions on jurisdiction under international laws.

The scope of the law has been extended to properties within the jurisdiction of Pakistan. The scope of the law within Pakistan is very clear. However, if the Benamidar and beneficial owner are out of the country and asset is also located outside Pakistan, the FBR cannot frame cases under benami law. In such cases, it would be out of the territorial jurisdiction of Pakistan.

The newly established Directorate General of International Operations would become operational from next Monday (March 18) for the imposition and recovery of taxes from undisclosed offshore assets and income held by Pakistanis abroad and to interact directly with foreign tax jurisdictions for exchange of information.

To a question, FBR Member Inland Revenue Policy said that first case of provisional assessment of an offshore asset has been completed where recovery has also been made. Without disclosing further details, he said that it is a case relating to Karachi.

He said that we will try to test cases where a resident Pakistani has purchased benami property aboard and banking transactions has also taken place from Pakistan.

He said that if a bank account has been closed after carrying out benami transaction, the owner of the account should not think that he would not be covered under the benami law. The case would also be framed in cases where the account has been closed after benami transaction, he said.

To another query whether the FBR will take action against Asif Ali Zardari where allegedly a joint investigation team (JIT) discovered benami accounts in connection to laundering of billions, FBR official said that he did not know about specific of his case but generally speaking concerned tax official has to prove the nexus for making a case against any person. Tax official has to establish complete nexus of benami account holder and beneficial ownership with the benami property in question, he added.

Explaining the law, Dr Hamid Ateeq Sarwar said that the FBR is not the sole government department which is dealing with this law. The FBR will act as a prosecution agency, he said. The second part of the law would be dealt by Adjudicating Authority being established for adjudication of the benami properties.

The Chairman FBR shall forward to the Federal Government a panel of suitable officers who are qualified as per criteria provided and the Federal Government shall appoint from amongst the panel a Chairperson and as many Members. Thirdly, the third potation of the law would be dealt by the Federal Appellate Tribunal. Any aggrieved person or officer including the initiating officer aggrieved by an order of the adjudication authorities may file an appeal with the Federal Appellate Tribunal (FAT) against the order of the adjudication authorities pertaining to the benami accounts and assets.