ISLAMABAD: In a smart move, the government has secured retrospective immunity to its top functionaries from any adverse court orders against disclosure of personal information of “high-level public officials and public servants”, their spouses and children or benamidars.

A senior government official said the new insertion in Section 216 of the Income Tax Ordinance 2001 had been made to protect top elected functionaries and officials of the Federal Board of Revenue (FBR) from a possible adverse order of the Supreme Court in Justice Qazi Faez Isa case. The new clause also empowers the government functionaries and officials to take such decisions in future against any ‘high-level public officials’.

Through the Finance (Supplementary) Bill 2021 passed by the National Assembly on Thursday, a new section (t) has been introduced in the income tax law, which states that “after clause (s), amended as foresaid, the following new clause shall be added and shall always be deemed to have been so added”.

The new clause (t) says: “In respect of any high-level public officials and public servants in BPS-17 and above, their spouses, children or benamidars, or any person in relation to whom the aforementioned persons are beneficial owner: Provided that nothing in clause (t) shall apply to those who are expressly excepted under clause (iv) of sub-section (m) of section 5 of the National Accountability Bureau Ordinance, 1999.”

A further explanation in the new clause says: “High-level public officials mean politically exposed persons (PEPs) as defined by a rule, regulation, executive order or instrument; or under any law for the time being in force.”

The official said the government expected some of the top level sitting elected representatives, unelected members of the government and top FBR officials could be affected by the Supreme Court order. The apex court had in April last year dismissed petitions, including a reference against Justice Faez Isa, through a short order. A detailed judgement is expected anytime soon.

In the short order, the apex court had overturned an earlier order of June 19, 2020 and “recalled and set aside” and also declared as illegal FBR reports, orders and information on the basis of which a presidential reference had been instituted against Justice Isa in the Supreme Judicial Council (SJC).

Officials said that under the existing income tax law, the FBR did not have powers to disclose information provided by taxpayers in their tax returns, except with prescribed forums permissible in the law. They said a top FBR official had at the time provided these restricted information and reports and data to the Assets Recovery Unit of the Prime Minister Office on the basis of which a reference was filed in the SJC against Justice Isa.

“This intentional leak could have created serious consequences for the highest-level sitting elected and unelected functionaries and public servants, hence an NRO [deal] has been secured through the money bill,” the official said.

The law also allows disclosure of similar information in future.

FBR Chairman Dr Ashfaq Ahmad and spokesperson Asad Tahir Jappa did not respond to calls and text messages for comments.

Justice Faez Isa won a case early last year in his favour as the verdict set aside an earlier court directive for the FBR to conduct an inquiry into three UK-based properties. By a majority of six to four, the Supreme Court had overturned its June 19, 2020 majority order that required verification and subsequent findings by the tax authorities on three foreign properties in the name of the wife and children of Justice Faez Isa which, according to the quashed reference, were not disclosed.

Consequently, the entire exercise conducted by the FBR was rendered null and void since the fresh order that came on a set of review petitions “recalled and set aside” the June 19 verdict that though quashed the presidential reference against Justice Faez Isa, had authorised the FBR to evaluate and later impose tax liability on Mrs Isa for possessing three properties in the United Kingdom.

The short order had also declared that “all the subsequent proceedings, actions, orders, information and reports in pursuance of the directions contained in the short order dated 19.6.2020 and the detailed reasons thereof, are declared to be illegal and without any legal effect. Resultantly, any such proceedings, actions, orders or reports cannot be considered or acted upon and pursued any further by any forum or authority including the supreme judicial forum”.

Published in Dawn, January 14th, 2022