ISLAMABAD: The Federal Board of Revenue (FBR) on Friday filed 20 appeals against the order of an Appellate Tribunal of Inland Revenue (ATIR) in a matter pertaining to the imposition of Rs5bn additional tax on the undeclared offshore properties owned by the Saifullah family.

FBR’s inland revenue commissioner challenged before the Islamabad High Court (IHC) the tribunal decision to set aside the additional tax amount against the business family. The counsel for the revenue board, Ashfaq Hussain Naqvi, filed the appeals.

In the appeals, the FBR stated the ATIR decided the matter on technicalities without discussing the merits of the case, misinterpreted the provisions of the law, and ignored the settled principles of the interpretation of the fiscal statute.

The FBR said the tribunal misconceived that the companies, which are separate legal entities, were being taxed rather the individuals who had admitted their investment in the companies of which they have provided no details. It was the first such case with the ATIR after the offshore properties of the Saifullah family were revealed in Panama Papers.

FBR files 20 appeals against order of appellate tribunal of inland revenue

Before the ATIR, the business family argued 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 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 the FBR, the family of politicians from Khyber Pakhtunkhwa declared those assets in 2018 tax amnesty scheme that had been mentioned in Panama Papers. While the family in their wealth return for 2012 declared local income, assets and expenses only, the International Consortium of Investigative Journalists (ICIJ) on April 3, 2016 released 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 heads of states, their relatives and associates, politicians and public officials, who formed offshore companies in various tax haven jurisdictions for obtaining secrecy and tax immunity of private property and wealth.

The list included the names of Anwar Saifullah, Iqbal Saifullah, Javed Saifullah, Saleem Saifullah and Humayun Saifullah, with the allegation that they held shares in 34 to 38 offshore companies. After Panamagate, they came up with a revised return and wealth statements incorporating 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 part of the appellant lent credence to the fact that the family acquired offshore assets/companies through unexplained sources, the FBR said.

The regulator said one of the co-owners of the offshore assets, Javed Saifullah, later declared some offshore assets under the 2018 Tax Amnesty Scheme, lending strength to the assertion. It said the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) had already started proceedings against the Saifullah family before the revision of return and wealth statement for 2012 tax year and initiation of proceedings under Income Tax Ordinance, 2001.

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

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.

Published in Dawn, November 27th, 2022