Fraudulent tax refunds: ATIR imposes penalty on Chinese company, dismisses its pleas

LAHORE: The Appellate Tribunal Inland Revenue (ATIR) full bench has imposed costs and dismissed applications for rectification, filed by a Chinese company, allegedly involved in fraudulent tax refunds, issued with active connivance of some Federal Board of Revenue (FBR) officials.

The ATIR bench dismissed applications for rectification unanimously, while a penalty/ cost was also imposed on the Chinese company, which was deposited with the Lahore High Court depository.

When contacted, Lahore-based tax lawyer Waheed Shahzad Butt told The News that earlier a Division Bench of the ATIR, by using own motion powers, declared that the Appellate Tribunal could not entertain an appeal under Section 131 of the Ordinance, 2001 without any written order, issued by the Commissioner (Appeals) under Section 129, and ordered for delisting of appeals, filed by a China-based taxpayer at the Lahore bench. Thereafter, Chinese company approached the ATIR in rectification jurisdiction, which had been dismissed by a full bench of the ATIR.

The ATIR order states: “Scope of rectification is limited to the extent of rectification of an ‘error’ or a ‘mistake’ apparent from record.

“The provisions cannot be invoked as an alternative or substitute of an appeal, revision or a review as a statutory right. The AR for the Appellant has not been able to point out any mistake that is apparent, obvious and floating on the face of order dated 5-8-2022; therefore, these applications have no force and are hereby dismissed.”

The ATIR earlier order stated, “This bench vide order dated 17-6-2022 passed in the case of Chinese company Vs. CIR, RTO, Lahore, committed some grave mistakes of law, which is prima facie based on some omitted law, specifically on the part of learned AR, who had stated at the bar that learned CIR-Appeals has refused to entertain appeals manually, which is factually incorrect and a patent wrong.”

Waheed Shahzad Butt, a ‘pro bono publico lawyer’ was called in person for assistance of the court as amicus curie. On court’s question, he briefly elaborated the scheme of ordinance with specific reference of filing of appeal before ATIR, jurisdictional domain and limitations/ conditions provided u/Section 129(1)(a), 129(1)(b), 129(4), 131(1) and 221.

Counsel for the applicant was directed to assist this Tribunal and file corroborative documentary evidence, in shape of Board Resolution and Power of Attorney, duly routed through Foreign Offices of Pakistan and Peoples Republic of China, through which the applicant/ appellant has been authorised to file the instant miscellaneous applications and, due to lack of these basic documents, instant applications are not maintainable.

The counsel, in response to above mentioned queries, candidly gave his reply ‘in silence’, because he was handicapped to meet the query as there exists no Board Resolution for filing of appeals/ applications. Admittedly the applicant had approached this tribunal for rectification of order against which reference applications were not filed and limitation for this purpose had expired, the ATIR order said.