The ongoing drive to act against individuals and businesses involved in money laundering, Regional Directorate of Intelligence and Investigation, Inland Revenue Peshawar has attached/frozen undeclared bank account of a businessman/owner of a trading company in Bajaur Agency, for involvement in money laundering and tax evasion.
Sources told Business Recorder here on Wednesday that the taxpayer is not only involved in tax evasion but also is a potential suspect for money laundering that is evident from thorough investigations conducted by the regional directorate I&I IR. The suspected individual was involved in Rs 1.5 billion credit transactions during tax years 2014 to 2016. The owner of businesses in Bajaur Agency was maintaining bank accounts in Rawalpindi. This is another major case of money laundering detected by the Regional Directorate of Intelligence and Investigation Inland Revenue. More cases involving huge amounts of money laundering are under investigation by the agency.
The details of the case investigation reveal that an application for attachment of bank account of the involved individual was filed under section 8 of the Anti-Money Laundering Act, 2010, before Special Judge Customs, Taxation and Anti-Smuggling Peshawar. Under the first proviso to Section 20 of the Anti-Money Laundering Act, 2010, the court of Special Judge Customs, Taxation and Anti-Smuggling is competent to try cases under the said Act.
The Special Judge Customs, Taxation and Anti-Smuggling Peshawar, has approved the application. The regional directorate has, therefore, provisionally attached/frozen the undeclared bank account of the subject taxpayer maintained with a bank in Rawalpindi for a period of ninety days as provided in section 8 of the Anti-Money Laundering Act, 2010 for further inquiry/investigation.
Further investigation has revealed that the subject individual is maintaining five other accounts with different banks in Rawalpindi. These accounts have more than Rs 1.5 billion credit transactions in tax years 2014 to 2016. The investigations of the bank account maintained by Habibullah (taxpayer), proprietor of M/s Rai Trading Company, shop number 11, Kochi Market, Monda Road, Khar, Bajaur, in Rawalpindi has revealed suspicious transactions which do not commensurate with the declarations of the tax payer to the department.
Based on the suspicious transactions in the aforementioned undeclared bank account maintained by the taxpayer, an application u/s 8 of the Anti-Money Laundering Act, 2010 was filed before the said court for provisional attachment of the said account. The court was pleased to order provisional attachment of the aforesaid bank account u/s 8 of the Anti-Money Laundering Act, 2010 vide order dated 23.11.2016.
The further investigation in the case has revealed that the taxpayer is maintaining five undeclared bank accounts. The declared business head office and bank account of the taxpayer is in Tehsil Khar of Bajaur Agency whereas the accounts are maintained in Rawalpindi which is against the logical commercial practice.
Based on the facts, it is thus evident that the tax payer is not only involved in tax evasion but also is a potential suspect of money laundering in terms of 192 and 192A of Section XIIA of the Anti-Money Laundering Act, 2010. The known sources of income of the taxpayer as per his income tax returns do not commensurate with huge credits in his bank accounts. For tax year 2014, the taxpayer has declared agriculture income (unverified) at Rs 1,520,100 and for tax year 2015 he has declared loss from business of Rs 1,950,472 and imports of Rs 6,429,235.
It is thus evident that the declared sources of income of the taxpayer do not justify the credits (deposits) of millions of rupees in the above mentioned bank accounts and will most likely involve tax demand under the Income Tax Ordinance, 2001 of over Rs 10 million; thus making it an offence under section XIIA of the Anti-Money Laundering Act,2010. Therefore, the undeclared bank accounts are required to be attached under section 8 of the Anti-Money Laundering Act, 2010 for a period of ninety days so that investigations may be completed without causing further loss of revenue and money laundering activities may be checked in time. The section 8 of the Anti-Money Laundering Act, 2010 is reproduced as under for reference:
"Attachment of property involved in money laundering.-(1) An investigating officer may, on the basis of the report in his possession received from the concerned investigating or prosecuting agency, by order in writing, with prior permission of the Court, provisionally attach a property, which he reasonably believes to be the property involved in money laundering for a period not exceeding ninety days from the date of the order."
The instant case not only involves tax evasion but also carries a reasonable and probable suspicion of money laundering; therefore, this honourable court is not only competent under section 203 of the Income Tax Ordinance, 2001 but also under section 20 of the Anti-Money Laundering Act, 2010 to try offences under the said Act and also matters connected or incidental to these offences. Section 20 of the Anti-Money Laundering Act, 2010 is reproduced for reference:
Jurisdiction.-(1) The Court of Sessions established under the Code of Criminal Procedure, 1898 (V of 1898) shall, within its territorial jurisdiction, exercise jurisdiction to try and adjudicate the offences punishable under this Act and all matters provided in, related to or arising from this Act:
Provided. (a) Where the predicate offence is triable by any court other than the Court of Session, the offence of money laundering and all matters connected therewith or incidental thereto shall be tried by the court trying the predicate offence; and
(b) Where the predicate offence is triable by any court inferior to the Court of Session, such predicate offence, the offence of money laundering and all matters connected therewith or incidental thereto shall be tried by the Court of Session, it added.
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