A cliffhanger in the court.

The Supreme Court of Pakistan has quashed the Presidential Reference filed against Justice Qazi Faiz Isa, a SC Judge, over his alleged failure to disclose three expensive properties in London acquired by his family members some years ago. On Friday, a 10-member SC bench announced a majority verdict in this much-hyped case while disposing of a number of Constitutional Petitions challenging the said Reference on various grounds. This SC bench has referred this matter to the Federal Board of Revenue (FBR) directing the concerned tax officials to conclude relevant legal proceedings within 75 days after seeking explanation from the judge's family members on the nature and source of funds used to acquire the said London properties. According to the short order, the Supreme Judicial Council (SJC) may take 'appropriate' action under Article 209 of the Constitution once the FBR submits its report to the country's premier judicial accountability and regulatory body.

Many believe that the apex court has thwarted what has largely been viewed as an ill-motivated move by the executive against a SC judge. Nevertheless, the honourable judge is still not out of the woods. Besides the petitioner judge, three judges of the SC bench have opposed the idea of sending this matter to the FBR. I also believe this verdict is unlikely to put an end to multiple controversies surrounding this sensitive matter. In fact, there is only a narrow scope of legal proceedings conducted by the FBR authorities against individuals who do not duly declare their assets in terms of Section 116 of Income Tax Ordinance, 2001.

The Inland Revenue Service (IRS) of FBR primarily seeks information from taxpayers regarding assets owned by them to reconcile their income with such assets So, it thereby tries to ascertain whether or not individuals had concealed their income while acquiring such assets. If individuals fail to offer plausible explanation for their undeclared assets, the tax authorities may treat undeclared assets as 'unexplained income' of individuals in terms of Section 111 of ITO, 2001. In that case, the competent tax authorities may, at the most, make an order of audit of tax affairs of individuals. And finally, they may exonerate individuals after making an assessment order requiring them to pay due amount of tax and penalties for their undeclared assets. They can do nothing else at all.

Any assessment order passed by a competent IRS officer will remain inconclusive until...