Federal Tax Ombudsman (FTO) has unearthed massive irregularities in the taxpayer registration system of Federal Board of Revenue (FBR). It observed a serious loophole in the 'IRIS' module being exploited by the unauthorised and unscrupulous persons for their ulterior interests at the cost of innocent taxpayers and national exchequer.
It is learnt that it was cited in a landmark order issued by the FTO on the complaint by Zeeshan Shahid referred through tax lawyer Waheed Shahzad Butt. The FTO in its order has stated that by not pressing the condition of cell number of the CNIC holder, the department has opened floodgate for the unlawful and unauthorised persons to exploit the user free IRIS system for their nefarious designs.
The FBR has been recommended to ensure that at the time of registration, the taxpayer should provide his own cell phone number duly registered in his name at least thirty (30) days prior to the registration also his/her email that also required in the original user free "IRIS" module.
The complainant stated that quite surprisingly it was categorically stated by Rehmatullah Khan Wazir, the then member (Taxpayers Audit) in a report submitted on automatic selection for audit under section 214D that 428,830 returns belonging to taxpayers with nil tax paid/nil turnover but no one in FBR is willing to consider the aspects of potential planned tax robbery/evasion seriously. Earlier, FTO has issued notice to chairman FBR, secretary Revenue Division and member (IT) FBR for initiating disciplinary proceedings against PRAL/IRIS/FBR/IT-Wing employees.
The FTO order stated: "The complaint was filed against (i) Unauthorised access to the Complainant's CNIC; (ii) unilateral issuance of NTN and unlawful filing of return and wealth statement. The complainant, a non-filer individual, purchased a motor vehicle during April 2018. According to the AR, after paying all dues/taxes applicable, the complainant sought services of an agent operating in the vicinity of the RTO, Nabha Road, Lahore, for registration of the vehicle. He alleged that the above agent in connivance with officials of the FBR, Lahore, got unilaterally issued NTN in the complainant's name in spite of the fact that he had never submitted such application. Subsequently, on the same day again, without knowledge and permission, the rogue elements working in the FBR/IRIS filed online income tax return together with wealth statement showing 'nil' income/wealth. He alleged that these rogue elements also supplied a fake cell phone number and a fake email ID to the department.
He contended that as FBR's own figures showed huge number of taxpayers who purchased motor vehicles, immovable properties and banking transactions filed 'nil' returns paying no tax but no one in the FBR appears to be interested in the rule of law as they simply seemed habitual in protecting each other. Admittedly, the complainant, originally a non-filer, sought services of an agent on his own volition for registration of vehicle. And only after handing over the CNIC to the above person, the complainant was found himself registered with the department followed by filing of the return. It has been observed that after launching IRIS, the FBR, vide letter dated 29.03.2016, also allowed the prospective taxpayers, the option to file online application for NTN and attach requisite documents, procure pin code and password and file return while sitting at their homes.
The CNIC was admittedly handed over with the complainant's consent to the agent for the purpose of registration of vehicle and payment of taxes etc, as non-filer. The fact, however, remains that fake cell number and e-mail address had been used while obtaining NTN. Although initially, the new taxpayers were required to disclose their cell numbers with SIM registered against their own CNIC, as per SOP issued regarding new user's free IRIS registration module. Later, by withdrawing this important check, the department had created a serious loophole in the IRIS module, which is being exploited by the unauthorised and unscrupulous persons for their ulterior interests at the cost of innocent taxpayers and the government exchequer. Notwithstanding position discussed supra, by not pressing the condition of cell number of the CNIC holder, the department has opened floodgate for the unlawful and unauthorised persons to exploit the user free IRIS system for their nefarious designs, according to FTO order.