The law of arrest on the basis of mere suspicion of concealment of income in Pakistan is going to be active if possibly bill passed. Is it good or bad for business whatever you think but everyone should be aware of new laws which are going to be legislate in parliament by any finance bills or amendments which directly hit to business owners or individuals.
Most probably this law will be passed by Federal Government soon and will be immediate effected from June-2021 to onwards. Finance Bill proposes to amend Income Tax Ordinance Section 203, arrests will be made under Criminal Procedure Act 1898. In case of doubt about the company, the director or the competent officer will be responsible. The accused must be produced before a special judge or magistrate within 24 hours. The federal government has directed the Federal Board of Revenue to use the Finance Bill in the federal budget for the next financial year to arrest any person, including politicians, bureaucrats, journalists, industrialists and businessmen, without giving them a chance to clean up – has decided to give rights.
Tax experts in Pakistan say the law could be misused to harass industrialists, traders and other taxpayers for political purposes. This will cause panic among the taxpayers while the FBR says that this law is not for any particular class. It will be applicable on every citizen of Pakistan. The Inland Revenue Officer will be able to arrest the person concerned. According to officials, an amendment to Section 203A of the Income Tax Ordinance has been proposed by the Finance Bill and an arrest procedure has been proposed under Section 203B. After approval of the proposed rules through parliament president signed the bill it will be applied. The final decision will be made with the approval of Parliament.
The amendment proposed in Section 203A states that the FBR should appoint an Inland Revenue Officer equal to the rank of Assistant Commissioner of Inland Revenue on the basis of material relating to evidence of concealment of income against any person. There will be arrest rights in accordance with that. All arrests under this Ordinance shall be made in accordance with the relevant provisions of the Code of Criminal Procedure Act, 1898 and if a company is suspected of being involved in concealment of income or is found to be involved in concealment of income, then If the competent director and officer are responsible, he can be arrested.
The concerned Inland Revenue Officer will have to immediately inform the concerned Special Judge about the crime of concealment of income and the person arrested on this suspicion and the Special Judge may issue directions to the relevant Inland Revenue Officer to produce the arrested person, which the Inland Revenue Officer must comply with.
If there is no special judge in a place or it is not possible to produce the arrested person in an hour due to the distance of the special judge’s court, then the accused has to be produced before the nearest judicial magistrate. While appearing before the special judge, the special judge will have the power to record the case at the request of the arrested person and grant bail to the accused or reject the bail. During the hearing, the Special Judge may cancel the bail at any stage. In addition, the accused must be kept in custody for the inquiry of the case. In this case, the Inland Revenue Officer may apply to the Special Judge or Judicial Magistrate for remand of the accused. The Special Judge or Judicial Magistrate may, after looking at the record of the accused, remand the accused for 14 days.
Right now Barristor Farogh Naseem said, government likely to pull out that amendment soon and Finance Minister Shaukat Tareen said through this amendment only selected and pointed persons will be chosen to implement the law. It’s an ongoing news till the matters is finalize by authorizes. we would like to request you to be ensure your latest updates from your legal advisors, legal team or lawyers to be updated about new policies about income to save yourself from any trouble being a business man.