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ISLAMABAD: The Large Tax Office (LTO), Karachi of the Federal Board of Revenue (FBR) cannot unduly probe the offshore bank accounts declared under the Tax Amnesty Scheme-2018, according to an order of the Federal Tax Ombudsman (FTO).

The complainant is an old lady holding an offshore bank account which is declared under the TAS-2018 through the Foreign Assets (Declaration and Repatriation) Ordinance, 2018.

The department received information of the same account through the “CRS” in the name of her son.

The proceedings were initiated and an order was passed.

According to an order (complaint no2682/KH/IT/ 2022) of the FTO against LTO Karachi, the fair market value of any asset is to be taken as on the date of declaration. Whereas, the balance in any bank account is not static. It was therefore clearly provided to declare the balance on the date of declaration to prevent the department from asking the source of all deposits in the bank account.

“As amnesty is granted in respect of the bank account declared under the TAS, law has sealed the fate of any harassment with respect to deposits/withdrawals in that bank account prior to declaration date, by clearly providing the value as on the date of declaration”, the order said.

The bank account is an asset in terms of the provisions of the Act and there remains no purpose of the declaration if the department is allowed to investigate it on the two grounds specified in the FTO order.

The repeated notices calling for the same information requiring the attendance of the complainant and unduly investigating the bank account already declared under the Foreign Assets (Declaration and Repatriation Act and Assets Declaration Rules 2020-2021 strictly in accordance with the law, the FTO order added.

The FBR’s objection regarding the bar on jurisdiction is misconceived.

Repeated notices are being issued without unduly long intervals and requiring the same information which is already available with the department. This act is tantamount to maladministration. The objections of the FBR are overruled. The moot point in the proceedings in hand is the difference in the value of the asset as per the amnesty declaration and as per the information received from offshore jurisdiction.

The interpretation of the department is not supported by the rules, the FTO’s order concluded.

Copyright Business Recorder, 2022

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