Hindering tax recovery: RTO gets another FIR registered against banker

LAHORE: The Regional Tax office (RTO) Lahore has got second First Information Report (FIR) registered within 40 days against a banker for hindering tax recovery from one of its account holders through freezing of account, said reliable sources.

According to the sources, the first FIR was registered against a banker in the month of Ramazan for not cooperating with it on recovery of tax from one of its account holders. They said a show cause notice had also been issued to another banker for leaking the information to his account holder before freezing his account in the same month. The said account holder had transferred his deposits before freezing of the account.

The sources said the FIR has been lodged under Section 420 of Pakistan Penal Code (PPC) while issuing taxpayer in default notice to the bank management. They said the criminal proceedings against the banker led to a tax recovery of Rs8.1 million from one of the account holders of the said bank.

It may be noted that the RTO had issued taxpayer in default notice but the bank manager kept exercising dilly-dallying tactics unless the account holder succeeded in securing an injection order from the court of law. It was followed by criminal proceedings against the said manager on account of breach of trust, interference to the state function and fraud.

It may be noted that the Corporate Tax Office (CTO) Islamabad had also lodged an FIR for tax recovery in the federal capital about a month back, following the precedent set by the RTO Lahore.

The Federal Board of Revenue (FBR) had revoked in October 2021 the clause that made it mandatory for taxmen to warn defaulters 24 hours before freezing their bank accounts, which tax lawyers dubbed as harassment and a dent to ease of doing business. The field formations have been allowed to exercise the powers vested under SRO 274(1)/2020 dated April 2nd, 2020 and Section 48 of the Sales Tax Act, 1990 for recovery of outstanding demands.

Former FBR chairman Shabbar Zaidi had made it mandatory for the tax collectors to intimate defaulters before suspending their account, keeping the FBR chairperson in loop. It may be noted that Section 140 of the Income Tax Ordinance, 2001 deals with recovery of tax from persons holding money on behalf of a taxpayer.

Copyright Business Recorder, 2022