2019 PLP 1996 (PTD)

3. The complaint was sent for comments to the Secretary, Revenue Division, in terms of Section 10(4) of the FTO Ordinance read with Section 9(1) of the Federal Ombudsman Institutional Reforms Act, 2013. In response thereto, the Chief Commissioner-IR vide letter dated 2612.2018 forwarded parawise comments of Deputy Commissioner-IR, Local Registration Office (LRO) RTO-II dated 24.12.2018. It was contended that after launching of IRIS in 2014, online facility was introduced for registration/obtaining NTN on the FBR's e-portal. Now there was no need to visit any office of the FBR, the aspirant on his own could apply for online registration at FBR's web portal. The system requires his/her CNIC along with mobile number and e-mail address. The verification was simultaneously sent to both, on the cell number and local e-mail address provided by the person. Finally after providing the verification codes the person was registered for income tax and his/her CNIC treated as NTN for all practical purposes. Subsequently, when the registered person filed his/her return through online mode or submitted manually to respective RTO his/her name was included in the ATL. Thus, the role of IRIS/FBR is totally denied in procuring NTN of the Complainant and filing of return and wealth statement. On the other hand, a person if intended to make his NTN through office, then he must appear in person with original CNIC. The Registration Cell of RTO-ll, Lahore, is mandated to issue NTN to AOP on its specific request and after detailed scrutiny of record whereby he had to adopt biometric system as well. Following was the procedure for acquiring the NTN, in case a person approaches the office. a) Taxpayer appears in person or through AR. b) All original documents are presented. c) A check list is given to the taxpayer to fill and enumerate the documents required. d) Documents of such persons are scrutinized at the NTN counter and token is issued to him after entering the CNIC number of the person or AR intending to have NTN.

4. It was averred that the staff of FBR/IRIS carefully performed its duty and issue NTN only on the request of a person intending to become taxpayer after detailed scrutiny of documents and CNIC. It was further averred that in the instant case, nobody approached the Deptt for issuance of NTN. It was either the Complainant or the one whom he had confided to get his vehicle registered must have availed direct facility of obtaining NTN. It was averred that no one could create NTN without consent of the person and besides tax return for Tax Year 2017 and wealth statement also could not be filed without having password and pin code. Thus, the Complainant who purchased vehicle had paid tax as filer despite of being non filer had misused the ATL facility. It was prayed that the Complainant may be directed to make due payment as he, according to his own admission, was a non filer.

5. The AR filed rejoinder dated 03.01.2019 contesting the filing of application for NTN, and thereafter, submitting return for Tax Year 2017, along with wealth statement. He contended that as FBR's own figures showed huge number of taxpayers who purchased motor vehicles, immovable properties and banking transactions filed 'Nil' returns paying no tax but no one in the FBR appears to be interested in the rule of law; as they simply seemed habitual in protecting each other. The stance of Deptt that access to CNIC, issuance of NTN, procuring Password and Pin Code for e-enrollment and then filing of return for Tax Year 2017 at Nil income was with the consent of the Complainant was totally wrong, and rather an act of misleading this office, solely to save the skin of real culprits. It was contended that the Complainant was an innocent citizen of Pakistan and had never submitted application for NTN and neither filed return for Tax Year 2017, along with wealth statement.

6. In response to the AR's rejoinder, the CIR, Zone-V, RTO-II, Lahore again filed counter comments, vide letters dated 11.01.2019 and 28.01.2018. It was contended that the Complainant was involved in the business of IT services. It was reiterated that NTN and subsequent Pin Code and Password could not be issued without consent of the party concerned. The return for Tax Year 2017 was e-filed through IRIS on 18.04.2018 and now in response to notice under Section 177 of the Ordinance, the Complainant could himself apply for revision of return for Tax Year 2017, under Section 122(3) of the Ordinance. As a consequence, the revised return for Tax Year 2017 was deemed to be amended assessment in terms of Section 122(3)(b) of the Ordinance. It was averred that the Complainant had, on his own volition, approached some unconcerned and unauthorized agent, whose identity, he chose not to disclose for the reasons best known to him. The Complainant was the beneficiary and not a victim in this case, as he had paid taxes as a filer knowingly that he was non-filer. It was further averred that the CIR Zone-V, RTO-II, Lahore conducted detailed enquiry and examined the Complainant as well as, his friend namely Mr. Nauman Nazir through whom he had contacted the agent and Ahmed Ali whose Cell Phone number was used. From the report submitted vide letter dated 20.02.2019, following facts were emerged: i. That the Complainant approached one Arif aka Bhola, a vehicle dealer, through a friend namely Nauman Nazir and gave him Rs.100,000/- along with copy of his CNIC for registration of vehicle, as a non filer. ii. That Arif aka Bhola is not tracable on the address provided by the Complainant. Nauman Nazir, however, produced Whatsapp audio recording of Arif aka Bhola wherein he admitted having received the above amount and copy of the Complainant's CNIC but deposited Rs.48,764 in the treasury for vehicle registration, the Complaint being as a filer. iii. That Cell Number 00923097755393 used in NTN application pertained to Ahmed Ali, a matriculate engaged in courier delivery service of a company. He denied of having e-mail address mohisintex982@gmail.com and any link with the Complainant or Arif aka Bhola.

7. It was averred that no one could get NTN without obtaining consent of the party and the tax return and wealth statement also could not be filed without having password/pin code. It was further averred that Complainant on one hand alleged regarding unauthorized access to CNIC and subsequent unilateral issuance of NTN and filing of the return for Tax Year 2017 and wealth statement, on the other hand had admitted that copy of CNIC was provided by him to his friend Nauman Nazir, who handed over the same along with a sum of Rs.100,000/- to the agent for registration of motor vehicle and payment of tax at the rate applicable to a non-flier.

8. Arguments of both the parties have been given due consideration and record perused.

9. Admittedly, the Complainant, originally a non-filer sought for services of an agent on his own volition for registration of vehicle. It was only after handing over CNIC to the above person that the Complainant was found himself registered with the Deptt on 18.04.2018 followed by filing of return for Tax Year 2017 on the same date. It is observed that after launching IRIS, the FBR vide letter No. 34/GST/ CRO/perf-Apprs1/ REGSYS(IRIS)/ 2014 dated 29.03.2016, also allowed the prospective taxpayers, the option to file online application for NTN and attach requisite documents, procure Pin Code and Password and file return while sitting at their homes. Initially, prospective taxpayer was required to provide the Cell Phone No. which was registered in his name at least 30 days before. However, that condition was subsequently removed by the FBR and now the person applying for NTN could provide any Cell Phone No. and get himself registered with the Deptt by getting Pin Code and Password for filing of the tax return. In the instant case, it is evident the Complainant on his own gave access to his CNIC by providing its copy to an unconcerned person. The above agent got the fake NTN by providing fake Cell Phone No. and e-mail and after obtaining Pin Code and Password filed return for Tax Year 2017, along with wealth statement. Obviously, the NTN was not issued through facilitation centre of FBR but was obtained by using online facility available to the individual new taxpayer through the IRIS. The CNIC was admittedly handed over with the Complainant's consent to the agent for the purpose of registration of vehicle and payment of taxes etc as non filer. The fact ,however, remains that while obtaining NTN, fake cell number and e-mail address had been used. Although initially as per SOP issued regarding new user free IRIS registration module, the new taxpayers were required to disclose their cell numbers with SIM registered against their own CNIC. The Deptt by withdrawing this important check had thus created a serious loophole in the IRIS module, which is being exploited by the unauthorized and unscrupulous persons for their ulterior interests at the cost of innocent taxpayers and the government exchequer.

10. In view of the foregoing discussion, as it was the Complainant who gave access to his CNIC to an agent who in turn taking advantage of the systemic flaw got him registered and filed return for Tax Year 2017, hence maladministration cannot be attributed to the Deptt. However, the illegal use of CNIC by an unauthorized person, is a criminal offence, for which the Complainant may approach the relevant agency, if he so desires.

11. However, notwithstanding position discussed supra, by not pressing the condition of Cell No. of the CNIC holder, the Deptt has opened floodgate for the unlawful and unauthorized persons to exploit the user free IRIS system for their nefarious designs. Recommendations:

12. FBR to-- (i) ensure that at the time of registration, the taxpayer should provide his own Cell Phone Number duly registered in his name at least thirty days earlier and his E-mail as was required in the original user free IRIS module; (ii) report compliance within 45 days. KMZ/75/FTO Order accordingly.