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ISLAMABAD: The Lahore High Court (LHC) issued notices of contempt of the Federal Board of Revenue (FBR) for failure to enforce its orders relating to the minimum tax formula adopted by taxpayers in the services (lawyers / chartered accountants, etc.) pay the minimum tax under Section 153 (1) (b) of the Income Tax Ordinance, 2001.
The contempt of court was pronounced by a single chamber of Judge Shahid Jamil Khan during the hearing of the contempt petition, seeking contempt proceedings against the FBR chairman and two members for failing to implement the previous LHC order dated October 14, 2021.
The LHC objected to the non-fulfillment of its order and observed that “the commitment is not honored due to the letter: petition n ° 57220 of 2021 in the case of Shahid Latif Khilji against the Federation: I am invited to refer to your note dated 13.10.2021 mentioning the calculations made by the petitioner in the petition in question.
I am further invited to attach a copy of the e-mail dated October 18, 2021 from Waheed Shahzad Butt in which he made serious objections to the proposed changes, stating that the existing calculations in the system are correct according to law and confirmed in certain previous judgments (104 TAX 1 = 2011 PTD 1672) and decisions of the Federal Tax Ombudsman.
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He cautions that if the changes are made as currently proposed, it will result in a huge and undue loss of revenue. To avoid any errors, the same is brought to the attention of IR Policy Wing, with the request to reconsider the calculation in light of the claims of the complaint and the cited case law, â€LHC added.
Judge Shahid Jamil further noted that the Chief (IT) is faced with how he can write an official letter / correspondence on the objections of Waheed Shahzad Butt (lawyer) as a reason to forgo the engagement before the Court. The proposed explanation is not satisfactory; therefore, the two officers are made aware of the reasons why they should not be prosecuted under the contempt order, 2003. Let the IT member and member policy appear and explain the state of affairs of the FBR they run.
Documents revealed that Waheed Shahzad Butt sent emails to FBR stating that “the undersigned is a blower in 104 TAX 1 (unincorporated taxpayer) and C.No. 577/2011 in Waheed Shahzad Butt Vs Secretary Revenue Division (108) TAX 155 & Secretary Revenue Division Vs Waheed Shahzad Butt 2013 (108) TAX 164]both related to the corporate sector service provider taxpayer.
During a hearing at the LHC in a petition challenging the question of the enforceability of the minimum tax, IRS officials conceded a tax calculation that is not only blatantly illegal, but causes huge losses to the public treasury. The LHC requested a response from the FBR and adjourned the case for contempt until November 15, 2021.
Copyright Business Recorder, 2021
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