What’s in references against judges Faez Isa, KK Agha

ISLAMABAD: The federal government has leveled serious allegations against senior judges of the superior judiciary -- Supreme Court (SC) Justice Qazi Faez Isa, Sindh High Court Justice KK Agha – in the presidential references filed in the Supreme Judicial Council (SJC).

The government in reference against Justice Qazi Faez Isa believes that the honourable judge appears to have committed gross misconduct and is liable to be removed upon the recommendations of SJC.

The government in its reference has alleged that the source to acquire the foreign properties by Justice Qazi Faez Isa’s wife is not accounted for. Therefore, the SJC should probe into the matter to assess whether these properties were acquired through money laundering, reveals the presidential reference, a copy of which is available with The News.

The federal government has also alleged in the presidential reference that the Apex Court’s judge has violated the Section 116 (1) (b) and Section 116 (2) of the Income Tax Ordinance 2001 by concealing foreign properties of his wife. By doing so, the honorable judge has violated Article II and III of the Judge’s Code of conduct, it said.

According to the Presidential reference, “Justice Qazi Faez Isa appears to have committed gross misconduct and is liable to be removed upon the recommendation of the Supreme Judicial Council in term of Article 209 of the constitution”.

A perusal of the reference proves that apparently Prime Minister’s Office through its Asset Recovery Unit (ARU) has played the lead role in verifying the facts, collecting the evidence against members of the higher judiciary and filing the reference before the SJC.

As per the reference, one Abdul Waheed Dogar filed a complaint in Prime Minister’s Asset Recovery Unit (ARU) on April 10, 2019, providing information that Justice Qazi Faez Isa and two other judges possessed properties abroad. The ARU then carried out its investigation.

Within 28 days, the Prime Minister’s office not only completed its investigations but also verified the facts in United Kingdom and Pakistan. During this period, the PM’s Office obtained certified documents pertaining to judges offshore properties via Pakistan’s High Commission in London. It also verified from Federal Investigation Agency (FIA) and Federal Board of Revenue (FBR) that these properties have not been declared by the members of the apex court.

Special Assistant to Prime Minister Shehzad Akbar while talking to The News confirmed that the Asset Recovery Unit has verified all the facts after it received the complaint. He refused to comment on the content of the reference citing that the matter is sub judice.

The special assistant to PM said the verification process was sped up so that the information about judges should not be leaked to media.

Below is the content of the reference filed against Justice Qazi Faez Isa:

Earlier the Chairman Assets Recovery Unit, Prime Minister’s Office Islamabad had received a complaint from one Mr. Abdul Waheed Dogar on 10.04.2019 providing information that Justice Qazi Faez Isa and two other judges possessed properties abroad.

Accordingly, the ARU conducted an in-depth exercise and obtained certified true official copies of the land registry in respect of the above three properties. The said documents are duly notorized by a Notary Public in London and have been duly attested by the High Commission of Pakistan in London. Vide Report date May 8, 2019, the International Legal Expert of the Assets Recovery Unit has observed as follows,

The property known as 40, Oakdale Road, London E11 4DL has been located in the United Kingdom and it is owned by Zarina Montserrat Khoso Carrera and Arsalan Isa Khoso. This property was registered with HM Land Registry on 28th June 2013 and the price paid on 28th June 2013 was £270,000. The title Number of the property is NGL 98543. There is no loan, charge or mortgage on this property. The current market value of the said property is approximately £400,000.

The property known as 90 Adelaide Road, London E10 5NW has been located in the UK and it is owned by Zarina Montserrat Khoso Carrera and Sehr Isa Khoso. This property was registered with HM Land Registry on 3rd April 2013. The price paid on 27th March was £245,000. The property’s title number is EGL 322197. There is no mortgage, charge or loan on this property. The current market value of the said property is approximately £438,000.

The property known as 50 Coniston Court, Kendal Street, London W2 2AN has been located in the United Kingdom and it is owned by Zarina Montserrat Khoso Carrera and Sehr Isa Khoso. This property was registered with HM Land Registry on 20th October 2011. There is no mortgage charge or loan on this property.

The property’s Title Number is NGL921691. The current market value of the said property is approximately £600,000. This is a leasehold property and new lease was granted by the freeholder in October 2011. The property portals indicate that the property was last sold in March 2004 for 236,000.

Section 116 (2) of the Income Tax Ordinance, 2001 prior to the Finance Act 2013 and after the Finance Act 2004, mandated that any resident taxpayer whose last declared or assessed income or the declared income for the year was one million rupees or above shall submit a wealth statement and a wealth reconciliation statement along with his tax returns.

This meant that the filing of a wealth statement where the last declared or assessed income or the current declared income was rupees one million or more was mandatory requirement. After the Finance Act 2013, every resident taxpayer, irrespective of his income while filing a tax return has to mandatorily file a wealth statement along with a wealth reconciliation statement. Section 116 (1)(b) of 2001 Ordinance, inter alia, provides that the wealth statement shall comprise the details of the total assets and liabilities of the taxpayer’s spouse, minor children and other dependents.

For the purpose of ease of reference section 116 of the 2001 Ordinance is 116. Wealth statement.— (1) [The]Commissioner may, by notice in writing, require any person 6 [being an individual] to furnish, on the date specified in the notice, a statement (hereinafter referred to as the "wealth statement") in the prescribed form and verified in the prescribed manner giving particulars of —

(a) the person‘s total assets and liabilities as on the date or dates specified in such notice;

(b) the total assets and liabilities of the person‘s spouse, minor children, and other dependents as on the date or dates specified in such notice;

(c) any assets transferred by the person to any other person during the period or periods specified in such notice and the consideration for the transfer;

(d) the total expenditures incurred by the person, and the person‘s spouse, minor children, and other dependents during the period or periods specified in the notice and the details of such expenditures; and

(e) the reconciliation statement of wealth.

(2) Every resident taxpayer3 [being an individual] filing a return of income for any tax year 4 shall furnish a wealth statement 5 [and wealth reconciliation statement] for that year along with such return Provided that every member of an association of persons shall also furnish wealth statement and wealth reconciliation statement for the year along with return of income of the association.

(3) Where a person, who has furnished a wealth statement, discovers any omission or wrong statement therein, he may, without prejudice to any liability incurred by him under any provision of this Ordinance, furnish a revised wealth statement along with the revised wealth reconciliation and the reasons for filing revised wealth statement, at any time before the receipt of notice under sub-section (9) of section 122, for the tax year to which it relates.

(4) Every person (other than a company3 [or an association of persons])persons])filing statement under sub-section (4) of section 115, falling under final tax regime (FTR) shall file a wealth statement along with reconciliation of wealth statement.

According to the Directorate General, International Taxes of the Federal Board of Revenue, Inland Revenue, contained in its letter bearing F.No.2(99) Int.Taxes/EOI/2019 dated 10th May 2019, Justice Qazi Faez Isa is a regular filer of wealth statement and tax returns but never has he declared the afore-stated foreign assets of his spouse. His spouse i.e. Zarina Motserrat Khoso Carrera filed a declaration on the FBR Portal for the tax year 2014 but she also has not disclosed the afore-stated assets.

The precise observations recorded by the learned Assistant Commissioner (IR) in his letter bearing No. 112 dated 10th May, 2019 addressed to the Commissioner (IR), AEOI/International Taxes Zone, Large Taxpayers’ unit Islamabad are as follows:-

Findings:

That Mr. Justice Qazi Faez Isa did not declare the above offshore properties owned by his wife (and children)

That Ms Zarina M Isa is wife of Mr Justice Qazi Faez Isa as per CNIC 42301-9722154-2, who also file her tax return for the tax year 2014.

That Mr Justice Qazi Faez Isa was liable to declare the above offshore properties as per provisions of Section 116 (1)(b) which mandate every taxpayer to file the wealth statement in the prescribed format declaring therein the total assets and liabilities of the persons and his spouse, minor children and other dependents.

That Mrs Zarina M Isa (wife), Sehr Isa Khoso (daughter), and Arsalan Isa Khoso (son) also did not declare the above properties since they did not file their tax declarations for the Tax Year 2014-2018.

The Federal Investigation Agency has submitted a report dated 10.05.2019 to remove any doubt about identity of the lady.

Mr. Justice Qazi Faez Isawas elevated as Chief Justice of the Balochistan High Court on 5 August 2009. One of the aforesaid mentioned properties has been acquired in the year 2011, while two have been acquired in 2013. Since 2011 till date Justice Qazi Faez Isa has filed wealth statements along with his tax returns, intentionally and deliberately concealing the above three properties, notwithstanding that all along u/s 116(1)(b) of the ITO 2001, he was under direct legal and juridical obligation to have declared the said properties. His wife also filed a wealth statement for the tax year 2014, and failed to declare the said properties.

In the case reported as the President Vs Mr Justice Shaukat Ali PLD 1971 SC 585, which records the opinion of the Supreme Judicial Council, at p.622M, it was observed as follows:

“In our view a greater degree of propriety is demanded from a Judge. He should not only avoid any action which is improper, but should also avoid doing anything which might even give the appearance of impropriety”

Apart from the fact that the failure of Justice Qazi Faez Isa to declare the afore-mentioned foreign properties of his wife in his successive wealth statements violates section 116(1)(b) of the Income Tax Ordinance 2001, the same also gives rise to the following issues:

The source to acquire the afore-stated expensive properties is not accounted for;

Whether the properties as afore-stated were acquired through money laundering, is an aspect which cannot be ruled out.

By not declaring the afore-stated properties accounting for them, the respective wealth reconciliation statement filed by Justice Qazi Faez Isa are also totally incorrect and tainted with concealment. Hence, a clear violation of Section 116(2) and other penal provision of Income Tax Ordinance 2001 are also made out.

One may look into Article II of the code of conduct for judges of the Supreme Court and the High Court contained in notification bearing No. F.SECRETARY01/20A09/SJC, which inter alia, provides that “A judge should be …. blameless….”. Furthermore, article III of the code of conduct states that a judge is “…. To keep his conduct in all things official and private, free from impropriety…”

The oath of a judge of superior court is contained in the third schedule to the Constitution which provides that a judge shall abide by the code of conduct issued by the Supreme Judicial Council. The said oath also states that a judge of the superior court shall preserve, protect and defend the constitution. And the constitution, its Article 5(2), inter alia, states that obedience to the constitution and law is an inviolable obligation of every citizen.

Furthermore, in the revised national judicial policy, 2009 reported in PLD 2010 journal 7 at page 17, it is, inter alia, stated as follows:

B. Misconduct

The judges of the superior courts should follow the code of conduct prescribed for judges…. The prime duty of a judge is to present before the public a clean image of judiciary. The oath of a judge implies complete submission to the constitution and under the constitution to the law.

A judge of the Supreme Court who omits to intentionally declare thee expensive London properties jointly owned by his spouse and children, violates section 116 of Income Tax Ordinance. The tax records of the learned judge and his spouse are absolutely silent about the source through which the said properties had been acquired and how and from where the funds were made available to purchase the said properties without violating the money laundering regime and the foreign exchange regulation act 1947.

The said mis-declaration seems glaring. Thus the said judge i.e. Justice Qazi Faez Isa appears to have committed gross misconduct and is liable to be removed upon the recommendation of the Supreme Judicial Council in term of Article 209 of the constitution.

Hence the law division submitted a summary for the prime minister after concurrence of the learned Attorney General of Pakistan. Upon the said summary the Prime Minister of Pakistan has advised the President of Pakistan to act in terms of Article 209 (5) read with Article 48 of the Constitution.

As per the advice of the Prime Minister I have formed an opinion that Mr. Justice Qazi Faez Isa may have been guilty of misconduct; hence I hereby direct the Supreme Judicial Council to inquire into the matter as envisaged under the law and the constitution and if the allegations are found to be true, submit a report in terms of Article 209 (6) of the Constitution of the Islamic Republic of Pakistan.

Monitoring Desk adds: In its reference filed with the Supreme Judicial Council (SJC) against Sindh High Court’s (SHC) Justice KK Agha, the government has alleged that although the judge had declared his foreign properties in 2018, he did not disclose their ‘value’. In its complaint, the federal government has attached an FBR report which reads that Justice Agha jointly purchased a property, ‘No 17 Calvert Close Belvedere Kent’, on November 24, 2005 but did not declare it in his wealth statement until the tax year 2018. Even then, the property was declared at zero value.

The report further stated that the SHC judge had not filed his tax declarations between 2005 and 2014. He filed his declarations for the tax years 2015, 2016 and 2017, but did not disclose his property in Kent.

The FBR report stated that Justice Agha also owned an offshore property, ‘No 40 Kerwin Close Dartford UK’, which was declared in his wealth statement for the tax year 2018 at zero value. The judge declared an offshore bank account at Lloyds Bank UK in his wealth statement filed for 2018 for the first time but with zero balance.

The Federal Investigation Agency’s (FIA) report has also been attached with the reference wherein it is stated that the SHC judge is a dual national and used both Pakistani and British passports for his 64 international trips since 2004.

“It is apparent that he [Justice Agha] maintains two different names, one in the CNIC and other in his passport which has independent consequences,” read the government complaint. “But a judge of a superior court maintaining different names or entities in CNIC and the passport is much more objectionable than an ordinary person doing the same. As per the code of conduct, the conduct of a judge has to be blameless and free from any impropriety.”

It is also alleged that SHC judge deliberately concealed his assets in UK in the tax years of 2015, 2016 and 2017. He acquired his first property in 2005. He declared his UK properties and bank account at zero value which was incorrect.

“These properties are not accounted for in his wealth reconciliation statement for the tax year 2018 and before,” read the reference.

“The sole purpose of showing these properties at zero value for the year 2018 appears to be to evade the duty to reconcile his wealth, which the learned judge could not do so if he had assigned values to the cost or the present market prices of such properties. There is thus clear-cut concealment and violation of section 116 of the 2001 Ordinance, begging the application of penal provisions of law,” according to the reference.