On December 20, 2020, at this space, a photograph of a property in the United Kingdom was published with the comment that such photograph represented: "The farmhouse owned by Saifullahs is located in the leafy Bramshill Park of Hampshire." Dawn erred in attributing the ownership of the property to Saifullahs and apologises for the error. 

ISLAMABAD: An Appellate Tribunal of Inland Revenue (ATIR) has reserved a decision on five identical appeals filed by the Saifullahs, a family of politicians from Khyber Pakhtunkhwa, challenging the imposition of Rs5 billion additional tax by the Federal Board of Revenue (FBR) against the undeclared offshore properties, which were exposed by Panama Papers, it emerged on Saturday.

It would be the first such case in which the ATIR is supposed to announce an order as earlier on the basis of Panama Papers then prime minister Nawaz Sharif had been disqualified. In subsequent proceedings, Mr Sharif and his daughter were sent to jail and his two sons were declared proclaimed offender for absconding from the trial proceedings.

However, the ATIR proceedings are different in nature as they are the outcome of the routine business of FBR’s Inland Revenue Service that had imposed Rs5bn additional tax in October 2018. After two years of correspondence, the Saifullah family challenged the additional tax imposition that according to the regulator was due against the concealed properties.

Read: Saifullah family biggest Pakistani offshore property owner in UK

Challenging the FBR move, the Saifullahs filed appeals in October 2020 before the ATIR. During the two months of proceedings before the tribunal, the appellants argued that the inland revenue service order was based on conjectures, surmises and presumptions while the FBR said the family in response to several notices filed various documents but did not produce even a single piece of paper with regard to the offshore assets, expenses and liabilities as declared in their revised return and wealth statements.

According to FBR, family of politicians from KP declared those assets in 2018 tax amnesty scheme that had been mentioned in Panama Papers

According to the FBR, the family in their wealth return for 2012 declared local income, assets and expenses only. However, the International Consortium of Investigation Journalists (ICIJ) on April 3, 2016 released certain information acquired from the database of a Panama-based law firm. The big data published worldwide as Panama Papers revealed the names of many persons, including head of states, their relatives and associates, politicians and public officials, who formed offshore companies in various tax haven jurisdiction for obtaining secrecy and tax immunity of private property and wealth.

The list included the names of the members of Saifullah family alleging that they held shares in 34 to 38 companies incorporated abroad. They are: Anwar Saifullah, Iqbal Saifullah, Javed Saifullah, Saleem Saifullah and Humayun Saifullah. After Panamagate, they came up with a revised return and wealth statements incorporating therein their beneficial ownership in various companies/trusts and claiming offshore assets, expenses and liabilities.

The FBR complained that the family did not produce any document with regard to the offshore assets, expenses and liabilities as declared in revised return and wealth statements. Such “willful and deliberate act of withholding evidence” on the part of appellant lent credence to the fact that the family acquired offshore assets/companies through unexplained sources, the FBR said. The regulator said the assertion got further strength when one of the co-owners of the offshore assets, Javed Saifullah, declared some offshore assets under the 2018 Tax Amnesty Scheme.

The FBR said the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) had already started proceedings against the Saifullah family prior to revision of Return and Wealth Statement for Tax Year 2012 and initiation of proceedings under Income Tax Ordinance, 2001.

After the Panama Papers, the regulator said the NAB and the FIA also took up the matter of acquisition of offshore assets concealed by a number of Pakistanis through ‘ill-gotten’ money.

Incorrect assessment

While terming the order for imposition of additional tax illegal, the Saifullah family claimed that the assessment was incorrect as the order of Inland Revenue Officer was based on conjectures, surmises and presumption.

The family said it was not justified in holding that the original assessment was amended on the basis of considerable material evidence, came in the possession through external sources. Since the conclusion was incorrectly drawn on presumption, surmises and conjectures, without any plausible justification or cogent reason, the same was not tenable in law, according to the appellant.

The FBR in its arguments before the tribunal rebutted these grounds explaining that income tax affairs of the taxpayer, in pursuance to the certain dubious declarations made in revised declarations i.e., return and wealth statement for tax year 2012 after revelation of his name and ownership of assets in Panama Papers, was selected for audit. The outcome of the audit proceedings was confronted to the taxpayer through various notices but the family did not produce any document to corroborate its assertion about the off-shore properties, the FBR said.

Published in Dawn, December 20th, 2020