Govt opposes two sections of Income Tax Ordinance

The federal government has challenged two clauses of the Income Tax Ordinance, which guarantee confidentiality of tax record of any individual, saying that in this day and age, confidentiality and privacy cannot be sought in respect of income/financial or property matters.

In 108-page written arguments submitted in the apex court on Monday, government’s lawyer, Dr Farogh Naseem said that sections 198 and 216 of the 2001 Ordinance “ex facie violate the fundamental right of information guaranteed under Article 19-A of the Constitution and the fundamental right of due process guaranteed under Article 10-A of the Constitution.”

Earlier, Justice Qazi Faez Isa had contended before a 10-judge full court that his tax records and that of his wife were unauthorisedly scrutinised by the functionaries other than the Federal Board of Revenue (FBR) in violation of sections 198 and 216 of the 2001 ordinance.

Under Section 198, if a person discloses information, he can face up to one year jail term and fine of up to Rs500,000. The Section 216 also bars disclosure of information by a public servant. The government however, contended that in this day and age, any confidentiality and privacy could not be sought in respect of income, financial or property matters.

“It was because of this that in India an analogous to our Section 216 provision ie Section 137 of the Income Tax Act, 1961, was repealed as far back as 1964,” the government’s arguments said.

Naseem said that it was a fundamental right of a citizen of Pakistan to know the details of income and assets of public servants, holders of public office and those who were in the Service of Pakistan. “Therefore, the court is invited to read down sections 198 and 216 of the 2001 Ordinance, so as to hold that they are not mandatory in nature.”

“This argument is without prejudice to the parent argument that in view of Section 216(3)(p) of the 2001 Ordinance, the petitioner cannot seek any refuge in respect of his tax records, in the context of the matter,” the lawyer said.

The arguments said that Justice Isa as a public servant, was subject to “investigation”. “Section 216(3)(p) provides that nothing in Section 216(1) shall preclude the disclosure of any particulars which may be required by any officer or department of the federal government or of a provincial government for the purposes of investigation into the conduct and affairs of any public servant.”

However, Dr Farogh Naseem added that the term “investigation” was not used in the sense in which it had been used in the Criminal procedure Code (CrPC).

He also referred a recent letter written by Justice Isa’s wife on July 9 in which she has attached her tax and other banking documentation. “The said letter was addressed to the FBR and copied to M/s Imran Khan, Waheed Dogar, Shahzad Akbar, Farogh Naseem and Dr Ishfaq of the FBR. It appears that the lady also shared the said letter and documents with the media.”

The written arguments further said that if the petitioner and his wife were openly bringing their tax records into the public, they stood estopped from raising any objection on the touchstone of sections 198 and 216 of the 2001 Ordinance.

The government contends that “prima facie (as only a prima facie legality of the contents of the Presidential Reference is required to be established by the Answering Respondents) the use of the expression ‘money laundering regime’ in the Presidential Reference was in order.”

It added: “Without prejudice to the above, and without conceding that the reference to the ‘money laundering regime’ in the Presidential Reference was improper, it would not be fatal to the Presidential Reference on the whole because if the Presidential Reference could be sustained on other grounds, the mentioning of the ground in respect of the ‘money laundering regime’ will be of no consequence.”

In the second part of the written arguments, the federal government informed the Supreme Court that the Assets Recovery Unit (ARU) received complaints of corruption and assets beyond means against 233 public office holders.

“As of 9th June 2020, the total complaints received against public office holders are 233 and 70 against private persons, out of which 22 have been referred to the appropriate departments,” said the written arguments.

The arguments stated that Mirza Shahzad Akbar, being the Special Assistant to Prime Minister on Accountability, received numerous complaints of corruption and assets beyond means against public office holders in Pakistan and abroad.

“The overseas assets are traced through ARU members and the legal expert using information and sources which are in public domain.” Third part of written arguments is still awaited.