Tax experts divided on FBR's powers in Justice Isa's case.

Byline: Rizwan Shehzad

ISLAMABAD -- Leading tax experts appeared divided on Saturday on the Federal Board of Revenue (FBR)'s powers in connection with probing and seeking the record older than six years from the wife and children of Justice Qazi Faez Isa regarding their London properties.

Though the top court has given the FBR two months' time to finalise a report By: initiating tax proceedings against Justice Isa's family, the debate has already started whether the tax authorities can seek the record after a certain period of time because, for some, it is a time-bound thing. The experts also say that there are other laws that give 'blanket exemption' to the money transferred through a foreign currency account.

To a question whether the FBR could seek record from Justice Isa's wife under the Income Tax Ordinance, 2001, renowned tax expert Ashfaq Yousuf Tola said that the law prohibits the authorities from opening five-year-old records. He expressed these views in the talk show, The Review.

He said that Section 177 of the Income Tax Ordinance, 2001, states, 'Provided further that the commissioner shall not call for record or documents of the taxpayer after expiry of six years from the end of the tax year to which they relate.'

If you read the Supreme Court's short order, Tola said, you will see that the court has ruled that the FBR would work only within the limits of the ordinance and the respondents have the right to appeal under the ordinance because the proceedings under 2001 Ordinance and before the Supreme Judicial Council (SJC) are 'distinct and separate from each other'.

'The order has made is clear that one can't travel beyond the set jurisdiction,' Tola said. 'It is very clear that the FBR can't go beyond the six-year limit.'

He further explained that the FBR will examine if the judge's wife was a resident or not, adding that the FBR has the power under Section 116(1) of the 2001 Ordinance to call the record if she was a resident and did not file wealth statement.

In addition, Tola said, the income tax commissioner has the power to ask anyone to present record under Section 116(1). However, he added, no penalty could be imposed because that would be the use of discretionary powers of the commissioner to show the record of the previous years. For penalty under discretionary powers, he said, she must be a resident during the period.

Referring...