Turning a blind eye: No action against Arsalan despite Rs51.3m penalty

Authorities reluctant to act due to influential backers, sources say.

LAHORE:

The Federal Board of Revenue (FBR) has failed to initiate any legal action under Section 114 (4) of the Income Tax Ordinance against Dr Arsalan Iftikhar, son of former chief justice Iftikhar Muhammad Chaudhry, for reneging on taxes and penalties totalling Rs51.3 million.

The FBR, NAB and FIA are reluctant to take action against Arsalan reportedly due to the backing he receives from those within the government, despite records of corruption or nepotism, sources familiar with the matter claimed.

Extracts of a report by a commission led by Shoaib Suddle and submitted to the Supreme Court in 2012 stated that Arsalan owns two companies - FAE (Pvt) Ltd and F&A Enterprises – and did not file tax returns in 2010 and 2011, respectively. Legal action under Section 114 (4) was proposed against Arsalan.

The authorities did not take any action against Arsalan, who was absent from duty from March 9, 2007, even as disciplinary action was taken and a case forwarded to the Federal Investigation Agency (FIA).

In 2011, Arsalan applied for and received a passport, which shows his birth date as 1979. According to the rules, the following can receive free passports: “Wafaqi mohtasib, judges of the Supreme Court, high courts, Federal Shariat Court, chief election commissioner, auditor general of Pakistan, FST chairman, election commission members, their spouses and their dependent unmarried children up to 28 years of age”. Therefore, Arsalan was not eligible to receive a gratis passport.

On December 6, 2012, Arsalan admitted to the Shoaib Suddle Commission that he had accepted ‘favours’ from real estate tycoon Malik Riaz, but did not say why.

Arsalan said he visited Monte Carlo from London in July 2010, accompanied by Ahmed Khalil, a friend of Riaz’s son-in-law Salman Ahmed Khan, and Khalil’s wife Sara Hanif. Riaz claimed that he had spent Rs342 million on Arsalan, but only provided evidence of Rs5.58 million to the commission.

According to Riaz, Rs8.86 million was spent on the trip to Monte Carlo. The commission’s report stated that Rs1.86 million had been made through cheque, credit card and electronic transfer by Riaz’s son-in-law. No evidence was received about the remaining Rs6.98 million.

According to the report, Arsalan provided income tax returns of two firms - F&A Enterprises and FAE. He declared income of Rs2.8 million as a salaried person only for 2010 and 2011.

“Prima facie, investigation into the bank accounts shows deposits of Rs58.9m which means that deposits of Rs56.1 million were disproportionate to his declared income,” the report said.

Riaz alleged that the assets included expenditure of more than Rs337 million that Arsalan had extorted through Salman during 2010 and 2011.

Arsalan Iftikhar said the claim was false and misconceived. He said he had entered into telecommunication contracts worth Rs900 million and profit was yet to be determined on these contracts. He also claimed to have paid Rs2.1 million in tax for 2010 and Rs3.5 million for 2011 on account of his business.

Published in The Express Tribune, July 18^th, 2014.