Attachment of bank account: LHC takes notice of ‘illegal’ recovery by FBR

ISLAMABAD: The Lahore High Court (LHC) has taken notice of illegal recovery by the Federal Board of Revenue (FBR) through the attachment of the personal bank account of a director of a company without fulfillment of legal formalities.

The LHC has issued notice to the FBR and the concerned tax officials of Inland Revenue to submit their response in the writ petition (71690 of 2023).

The banks have released the disputed tax amount of the company from the personal bank accounts of the director of the company.

According to the order of the LHC, the petitioner taxpayer is aggrieved of an action under section 140 of the Income Tax Ordinance 2001. An amount has been withdrawn from the personal bank account of the petitioner.

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The counsel of the petitioner submitted that no notice or assessment order has been served against the petitioner and impugned notice under section 140 of the Ordinance of 2001 to the bank is without any details of the outstanding amount against the petitioner.

The Inland Revenue officer, who has issued an impugned notice, shall appear in person before the court on the next date of hearing, the LHC’s order added.

The petitioner has informed the LHC that the deputy commissioner Inland Revenue has issued recovery notices to the banks and withdrawn the amount from the personal bank account of the taxpayer, being director of the Modern Building Maintenance (Pvt) Limited, which is illegal and unlawful.

The deputy commissioner Inland Revenue has unlawfully withdrawn amount without any prior intimation under section 133(1) of the Income Tax Ordinance, 2001.

The notices were issued without passing or confronting any order or prior recovery notice as per law and rules. The illegal recovery from each two banks has been made without fulfilling the statutory requirement and without proving any opportunity.

The recoveries were made from the banks of the petitioner on the basis of the impugned notices, the petitioner added.

The LHC should declare that the action taken by the respondent FBR authorities for recovery of the disputed tax demand was unlawful on malicious and mala fide intention.

The LHC should declare that the FBR has overstepped jurisdiction and excessive exercise and abuse of power and authority. Bankers are personally responsible and liable to return the money to the petitioner which has been so released to the FBR, the petitioner added.

Copyright Business Recorder, 2023