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To comply with SC order: Tax probe of Justice Isa’s wife to be shifted from Karachi to Islamabad

June 21, 2020

ISLAMABAD: In order to comply with the orders of Supreme Court, the Federal Board of Revenue (FBR) has decided to relocate jurisdiction of wife of Justice Qazi Faez Isa from Karachi’s Regional Taxpayer Office (RTO-III) to Islamabad for inquiring about the source of funds for acquiring offshore properties.

In case of changing of jurisdiction from Karachi’s RTO-III to Islamabad, this case will be referred to Zulfiqar Ahmad CIR (AEOI Zone), Director, Directorate of International Tax Operations, Islamabad. Zulfiqar Ahmed is IRS officer of BS-20 who had served mostly in Karachi and he was transferred to Islamabad few years back.

The offshore assets related cases are dealt under Automatic Exchange of Information (AEOI) under OECD cooperation mechanism and the FBR has divided the whole country into three AEOI zones into Karachi, Lahore and Islamabad.

Top official sources confirmed to The News that Justice Qazi Faez Isa’s wife used to file her returns in Karachi because she earned income from salary. Few years back, the FBR changed her jurisdiction and brought that into Islamabad. She had taken up this issue and visited the FBR headquarters and inquired why her jurisdiction was changed without her consent, said the sources. So the FBR had to referred back to her jurisdiction to Karachi’s RTO-III. Now under the directives of the apex court, the FBR is going to once again change her jurisdiction of her case again to Islamabad. Now the question arises whether the FBR will be dealing this case by creating separate treatment for an individual under the tax law?

All top guns at the FBR are tight lipped by citing examples of sensitivity of this particular case, however, one top official when inquired replied: “Mrs Isa’s jurisdiction currently lies in Karachi. In compliance to Supreme Court’s latest judgment, it would have to be relocated to Islamabad.” The FBR high-ups will have to think under which sections of Income Tax Ordinance 2001 the notice would be served to Justice Qazi Faez Isa’s wife and children. One tax official said that the FBR could serve tax notice under Section 111 for concealment of assets as addition was made in year of discovery in 2018 in case of foreign assets and income.

There is another view that the FBR can issue simple notice by citing judgment of Supreme Court whereby she should explain source of funding for acquiring of offshore assets abroad. There could be an issue of time limitations as the FBR cannot open up cases beyond five years’ period. However, one tax official commented that there was a judgment of a higher judiciary that there would be no time limitation where the concealment was involved. The issue of agricultureincome might come on the surface during the course of inquiry to be conduct by the FBR.