Money laundering: ‘Taxpayers prefer to challenge jurisdiction of income tax department’

LAHORE: Taxpayers involved in money laundering prefer to challenge the jurisdiction of the income tax department instead of proving their innocence, said sources.

According to the sources, the taxpayers take the plea that the accounts of the company are being regularly audited and the company and the directors are being assessed as a taxpayer since last many years with no complaint of any concealment of income. Therefore, the proceedings initiated against them under the Anti Money Laundering Act (AMLA) are illegal and without jurisdiction.

They said the taxpayers also argue that since no penal consequence of criminal nature has been provided in the Income Tax Ordinance in case of any money laundering or tax evasion of Rs10 million and above, therefore, the tax department has no jurisdiction to lodge a complaint of money laundering against them, as it is only the jurisdiction of AMLA.

Those involved in money laundering also take the plea that the department has initiated anti money laundering proceedings against them when no complaint of incorrect or inaccurate submission of the statutory requirements against the company or its directors is under consideration of the Securities and Exchange Commission of Pakistan (SECP).

According to the sources, the ultra rich taxpayers spend hefty pints to approach the highest appellate forums without realizing that criminal matters couldn’t be taken up in writ petitions since the same require detailed deliberation, lengthy arguments, recording of evidence and examination of witnesses etc.

They pointed out that the Income Tax Ordinance 2001 clearly reveals that in respect of matters which concerns evasion of taxes over Rs10 million or above, the same is referable to be dealt with under special law of AMLA, therefore, the plea that the department has no jurisdiction is always out of place and incorrect. They added that it is the directorate general office, which has been given jurisdiction to evaluate such type of matters.

Copyright Business Recorder, 2023