Latest news with #InlandRevenue
Business Recorder
3 hours ago
- Politics
- Business Recorder
Section 122 (5A) ITO: Power granted to IR commissioners is not without boundaries: ATIR
ISLAMABAD: Appellate Tribunal Inland Revenue (ATIR) has held that the powers granted to Commissioners Inland Revenue to amend assessment orders under Section 122(5A) of the Income Tax Ordinance, 2001 are not without boundaries. The ATIR emphasised that the scope of investigation and inquiry under this provision is not open-ended, and must operate within clearly defined restrictions and limitations. In a strongly worded observation, the ATIR remarked that 'justice is a concept of moral rightness based on ethics and rationality,' asserting that unchecked investigative authority undermines both the legal process and individual freedoms. ATIR further stated that the investigative proceedings under the cited provision 'suffer not only from the vice of excessive delegation of legislative authority but also amount to a patent violation of fundamental rights and constitutional guarantees.' The ruling criticised the absence of adequate safeguards and procedural clarity, arguing that this lack opens the door to arbitrary use of power. Tax lawyer Waheed Shahzad Butt says this judgment could set a precedent for future challenges to administrative overreach and highlight the growing need for a balance between state authority and individual constitutional protections. The decision is being welcomed as a reaffirmation of the principles of due process and rule of law. ATIR order stated: 'under Section 122(5A) the scope of investigation and inquiry is not open ended without any restrictions and limitations. Matter of enquiries and fishing and roving inquiries is to be seen in the context of two mandatory prescribed conditions referred in the provision of law. Enquiries cannot be conducted without the presence of twin criteria of 'erroneous & prejudicial to interest of revenue' otherwise there would be no difference between (Regular Audit) Section 177 & (Amendment of assessment) Section 122(5A). Verification of any factual controversy is obviously out of purview of section 122(5A) and requires conduct of audit (if any) under section 177. Creation of tax demand under the umbrella of Section 122(5A) is a blunt violation. There is no concept of 'unfettered discretion' in the fiscal laws and arbitrary exercise of discretionary powers has to be struck down. Justice is a concept of moral rightness based on ethics and rationality, impugned order merits, cancellation, ATIR order added. Copyright Business Recorder, 2025
RNZ News
19 hours ago
- Business
- RNZ News
Christchurch fraudster Diane Baumann used stranger's driver's licence to claim $30,000 in payments
By Al Williams , Open Justice reporter Diane Baumann used the driver's licence details of a stranger in a different city to create a fictious carer and receive payments while collecting ACC benefits. Photo: RNZ / Kate Newton A mother of five used a stranger's driver's licence details to create a fictitious carer for herself so she could get nearly $30,000 in payments, while also collecting Accident Compensation Corporation benefits. Diane Marie Baumann's deception only started to catch up with her when the real owner of the driver's licence, who lived in a different city, received correspondence from Inland Revenue. Soon after, the woman also discovered she had a poor credit rating score because of the multiple debts Baumann had run up in her name. Now Baumann, 39, also known as Diane Cox, has appeared for sentencing in the Christchurch District Court on multiple charges of using documents for pecuniary advantage. Between November 2020 and April 2021, Baumann received an Accident Compensation Corporation (ACC) benefit while receiving regular payments from Custom Care Nursing Limited. She used her Rolleston address and her sibling's phone number as part of her client details. Baumann used another phone number as the contact for the fictitious carer she had created for herself, using the victim's driver's licence details. Over the next several months, Custom Care Nursing Limited deposited $26,957 into a bank account number allocated to Baumann under her alias, Diane Cox. At the same time, Baumann opened accounts with Spark New Zealand, One New Zealand and Zip Co, using the victim's driver's licence details. She received $3680 in services and products, which were never repaid. The deception continued when she spoke to police and Oranga Tamariki on multiple occasions in 2024 with concerns about a family member she said was in a relationship with an older teen, known as Male A. Baumann completed an unsupported child's benefit application form for Male A, requesting that benefit payments be made to an account named D. Cox. On the application, she said Male A had come into her care and that she was "fully supporting" him and denied having had any contact with a social worker from Oranga Tamariki or other authorised agencies. She then texted Male A's mother, saying she needed to meet her to get his medication. His mother replied, telling Baumann she would be getting the cops at her door and that it was not funny that she had not informed her that Male A was at her residence. Again, she completed an unsupported child's benefit interview form, recording that the arrangement for Male A to live with her had become permanent. The pair then attended a face-to-face interview with an assessor from Barnardos regarding the application, with Baumann claiming Male A would be staying in her spare bedroom, which had just been left vacant by her son. She said she had tried to get Male A's birth certificate and clothing from his mother but was unsuccessful. Baumann's son had not been living with her prior to the interview. At the end of the 2021 financial year, the woman who owned the driver's licence received correspondence from Inland Revenue regarding her employment at Customer Care Nursing Limited. She had never worked for them. In 2022, the victim's bank manager printed off her credit score, which showed debts accumulated in her name that she was not responsible for. The woman then conducted her own investigation using three debt collection agencies. Through them, she discovered that the addresses and phone numbers used in the accounts under her name were unknown to her. It turned out Baumann had managed to set up employee contracts, opt out of KiwiSaver and fill in tax code documents, all signed in the victim's name. She also used an email address with the victim's name which had no association to the victim. It remains unclear how Baumann got the woman's driver's licence and personal details as she declined to comment on any of the offending. She also refused to provide the Pin number to her cellphone. Judge Gerard Lynch said Baumann's offending had caused significant financial implications for the victim. "She was upset to find out she had a bad credit rating," Lynch said. "The victim says, 'I wish she would put this amount of effort into getting a real job'." The judge said Baumann had two previous convictions for theft and deception in 2017. She had used methamphetamine as a daily coping mechanism with regards to access to her children and there had been relationship issues. Judge Lynch said there was an ongoing need for rehabilitation and that he would impose home detention to promote her rehabilitation. "Given the personal background and drug misuse, I will adopt rehabilitation over a punitive approach. "When we deal with government departments, we can't expect them to drill down and check every application, if they did, things would ... grind to a stop." Judge Lynch said there were remorse, addiction and personal factors. "The reality here is there was no defence to these charges. "Nothing is going to be gained by sending you to prison, you are on notice now, if you offend again, you won't be bailed." The judge said there was no realistic prospect of reparation and partial reparation had been offered. He ordered that $7500 reparation be paid and sentenced Baumann to six months' home detention. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Express Tribune
a day ago
- Business
- Express Tribune
Tarar for avoiding conflict of interests
Listen to article Law Minister Azam Nazir Tarar has advised the newly appointed members of appellate tribunals dealing with billions of rupees worth of tax matters to recuse themselves from hearing cases where the conflict of interests arises because of their past professional affiliations. The minister spoke to The Express Tribune after questions were posed about the conflict of interests in the case of some of the appellate tribunal members. "When the question of conflict of interests arises, the newly appointed members will choose the option of 'not before me'," Tarar said. Instead of appointing new members of the Inland Revenue appellate tribunal through the Federal Public Service Commission (FPSC), the government in January this year constituted a three-member selection committee. Among the committee members were Justice (Retired) Mushir Alam, Major General (Retired) Naveed Ahmad, who is a member of the FPSC, and Asim Zulfiqar, a senior partner of AF Ferguson chartered accountancy firm. On the recommendation of the committee, the federal cabinet has so far appointed 15 members from March to May this year. The newly appointed members have been given salaries equal to judges but they are not independent like the judges, said Dr Ikramul Haq, a senior lawyer at the Supreme Court of Pakistan. He also questioned the selection process, saying there were questions about some of the members' competency and conflict of interests. The members should either work under high courts or the Supreme Court instead of working under the executive branch, he suggested. To a question about bypassing the FPSC, the law minister said the selection process had been outsourced to management consulting firm AT Kearney "for ensuring independence" in the process. To another question how to ensure transparency and objectivity in deciding the cases if some of the tribunal members have worked with tax advisory firms, Tarar replied "we believe that these are mature people and will take care of the conflict of interests". The minister said that whenever such a situation arises, the members should exercise the "not before me" right to avoid hearing cases being pleaded by tax firms where they have worked in the past. The Ministry of Law has made these appointments under Section 130 of the Income Tax Ordinance, 2001. The law states that a person shall be eligible to be appointed as a member of the Appellate Tribunal, if he is an advocate of a High Court for not less than 15 years and possesses such other qualifications as may be prescribed by rules under this section; has for a period not less than 10 years practiced professionally as a chartered accountant and has for a period not less than 10 years practiced professionally as a cost and management accountant. An officer of the Inland Revenue in BS-21 or above; or an officer of the Inland Revenue in BS-20, having served in such a grade for three years or more, is also eligible for these appointments. The prime minister decided to appoint all these members from the private sector to address the issue of conflict of interests. There had also been incidents in the past where the Federal Board of Revenue (FBR) used to influence the outcome of cases, although the members were working under the administrative control of the law ministry. About Rs4 trillion in revenues are stuck at various levels – most of which before the commissioners appeal of the FBR and the appellate tribunals. The FBR and the office of the Attorney General of Pakistan had assured the PM to at least recover about Rs400 billion before June. Similar assurances had also been given to the IMF. However, so far no major breakthrough has been achieved, except in the case of windfall tax. A recent IMF report stated that the Pakistani authorities were actively pursuing the resolution of outstanding cases. It said efforts were being made to recover Rs367 billion out of a total of Rs770 billion under dispute. These included cases pending before the Supreme Court involving Rs43 billion, high courts in Islamabad, Sindh and Lahore involving Rs217 billion and the Appellate Tribunal Inland Revenue Rs104 billion. The report disclosed that the IMF had been assured that the Supreme Court had completed its initial hearing, with a final decision expected by mid-April. A favourable ruling could effectively resolve related cases worth an estimated Rs120 billion, according to the report. The IMF's view was that resolving the cases would help clarify the legality of the disputed claims, thereby supporting future revenue by reducing uncertainty and discouraging future litigation. The appointments of the new members have already been challenged in courts for the lack of transparency. According to media reports, the Islamabad High Court (IHC) has issued an interim order on the appointment of members in the Appellate Tribunal Inland Revenue, stating that all appointments would be subject to the final outcome of a writ petition. Earlier, the IHC issued notices to the Ministry of Law secretary, FPSC chairman and Attorney General of Pakistan following a constitutional petition challenging the appointment process of tribunal members. The petition challenges the unadvertised process of "head hunting" and the lack of transparency. It alleges that the appointment process did not follow the established rules and procedures.
Business Recorder
a day ago
- Business
- Business Recorder
FBR document submission process highlighted
LAHORE: In a recent awareness lecture on withholding tax at the Lahore Tax Bar, Member Inland Revenue Muhammad Mohsin Virk shed light on the process of filing and pursuing cases before the Appellate Tribunal. Virk emphasized the importance of following proper procedures when submitting documents to the Federal Board of Revenue (FBR). According to Virk, when documents go missing and cases are decided against taxpayers, they often argue for case restoration, claiming that the documents were submitted to the FBR. However, they fail to provide proof of submission in the form of a receipt. He clarified that the only way to ensure proof of document submission is by getting the documents recorded in the FBR's record. He stated, 'If documents are submitted without proper recording, it becomes the taxpayer's responsibility to prove submission.' He stressed that once documents are properly recorded, it becomes the department's responsibility to safely keep them. Copyright Business Recorder, 2025
Business Recorder
a day ago
- Business
- Business Recorder
There can be no criminal proceedings against taxpayer for recovery of arrears: LHC
LAHORE: The Lahore High Court has held that no criminal proceedings can be initiated against a tax payer for recovery of tax arrears until the final determination of liability against him by a competent authority. The court also observed that in the absence of assessment of tax or determination of tax involved, the special judge could not pass the sentence of fine which is the amount of tax involved and part of the penalty provided under the law. The court said the mechanism for recovery of arrears of tax provided in Section 48 of the Sale Tax Act would come into play only once the tax was finally assessed and penalties imposed continued to be unpaid. The court passed this order in a petition of a tobacco company and others who approached against the revenue officials for registration of criminal reports against the petitioner for their involvement in tax evasion. The court said no one is denying the competence of the complainant of carrying out criminal investigation in cases involving tax fraud, however, the dispute is the modus operandi in launching such investigation. The court said a taxpayer can prefer a departmental appeal against the decision of revenue official and then knock the door of appellate tribunal of Inland Revenue by way of filing appeal and that of the high court in the shape of tax reference. The court said civil and criminal proceedings can run side by side but it is a principle of law that where the criminal liability is dependent upon or connected with the result of civil adjudication, criminal proceedings can be stopped till the outcome of civil matter for safer administration of justice. The court, however, said the provisions of the Act gave a privilege to the tax payer to compound the offence subject to payment of amount of tax due against him. The court said if the amount of tax due against a tax payer was not assessed prior to launching of criminal proceedings, then it would amount to shut the window of compound ability for a tax payer, as without determination of amount of tax due, the commissioner would not be able to compound the offence. The court said the petitioners have been regularly filing sales tax returns and prior to launching of impugned complaint neither any audit report, show-cause notice nor any assessment order was in the field against them. The court, therefore, quashed the impugned complaint registered being unconstitutional, ultra vires of the Act and against the fundamental right of the petitioner. Copyright Business Recorder, 2025
