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Customs I&I will arrest tax defaulters involved in concealment of income tax after third-party audit

Customs I&I will arrest tax defaulters involved in concealment of income tax after third-party audit

MULTAN: Directorate of Customs Intelligence and Investigation-FBR will arrest tax defaulters involved in concealment of income tax after third-party audit by chartered accountant companies.

It was informed by Additional Commissioner Inland Revenue Muhammad Akram while talking to Customs Today on other day in his office. He told that when an officer of Inland Revenue authorized to arrests a person, he shall immediately intimate the fact of the arrest of that person to the Special Judge who may direct such officer to produce that person at such time and place and on such date as the Special Judge considers expedient and such officer shall act accordingly.

He said that not a single tax defaulter was arrested in the past on the income tax side. However, there were cases of arrest of sales tax defaulters in the past. The FBR cannot arrest anyone merely on the basis of cases framed by tax officials. It has to be done through the Chartered Accountant firms. However, so far, the FBR has not issued any rules for arrest or assigned any case of investigation to private chartered accountant firms for investigation, he added. He stated that the detailed legal provisions have been incorporated with respect to arrest and prosecution of taxpayer committing an offence under Part XI of Chapter X of the Income Tax Ordinance 2001 and in particular with respect to concealment of income.

The offence of concealment of income which has resulted into non-payment of tax of Rs100,000,000 (in the gazette of Finance Act, 2021 in proviso added to section 203(2) it is mentioned as Rs100, which apparently appears to be a mistake when read with other provisions) by filer or Rs25,000,000 in case of a non-filer has been excluded from the purview of Trial by Special Judge under the existing section 203 and instead has been brought under purview of newly inserted sections 203B to 203I, he stated.

Where on the basis of material evidence brought on record, as a result of audit conducted by the auditors in terms of sub-section (8) of section 177 read with section 214C of this Ordinance, an assessment is made or amended under section 121 or 122 of this Ordinance, as the case may be, and the assessing officer records a finding that the taxpayer has committed the offence of concealment of income which has resulted in non-payment of tax of Rs 100 million and above in case of a filer and Rs25 million or above in case of non-filer, the taxpayer may 0be arrested after obtaining written approval of the committee specified under sub-section (2).

The committee under sub-section (1) shall comprise the Minister for Finance and Revenue, the Chairman of the Board and the senior most member of the Board.He stated that the provision of the Code of Criminal procedure, 1898, so far as they are not inconsistent with the provisions of this Ordinance, shall apply to the proceedings of the court of a Special Judge and such court shall be deemed to be a court of Sessions for the purpose of the said Code and the provisions of Chapter XXIIA of the foresaid Code, so far as applicable and with the necessary modifications, shall apply to the trial of cases by the Special Judge under this Ordinance.

For the purposes of sub-section (1), the Code of Criminal Procedure, 1898 (Act V of 1898), shall have effect as if an offence punishable under this Ordinance were one of the offences referred to in sub-section (1) of section 337 of the said Code. Where the person suspected of offence of concealment of income or any offence warranting prosecution under this Ordinance is a company, every director or officer of that company whom the authorised officer has reason to believe is personally responsible for actions of the company contributing to offence of concealment of income or any offence warranting prosecution under this Ordinance shall be liable to arrest.