FBR Imposes Major Penalty on IRO for Causing Huge Loss

FBR Imposes Major Penalty on IRO for Causing Huge Loss

(PkRevenue.com) – The Federal Board of Revenue (FBR) has imposed a major penalty of compulsory retirement on Arif Javed, an Inland Revenue Officer (IRO) at the Regional Tax Office (RTO) in Multan, for deliberately causing a substantial loss to the national exchequer.

The disciplinary proceedings against Arif Javed were initiated on charges of inefficiency and misconduct, leading to a significant revenue loss. The FBR detailed the charges as follows:

1. Failure to Safeguard Government Revenue: Arif Javed, while serving as Unit Officer of Withholding Unit-02 in Multan, was accused of failing to efficiently discharge his duties, resulting in substantial financial loss.

2. Causing Revenue Loss: He caused a revenue loss of Rs. 232,502,227 and Rs. 27,215,360 by failing to address the observations made by the Directorate of Revenue and Risk Analysis (DRRA) in the case of M/s Saad & Co for the tax years 2020 and 2021.

3. Negligence in Factual Determination: Arif Javed was found to have passed orders without ascertaining the true facts, failing to recover the advance income tax due, without any substantial evidence to justify his decisions.

4. Confirmation of Misconduct: The Additional Commissioner-IR, Withholding Tax Range, Multan, subsequently amended the original order, confirming that M/s Saad & Co failed to deduct the due amounts of advance income tax, thereby validating the DRRA’s observations.

The FBR said Zulfiqar Ali, Additional Director of the Directorate of Intelligence & Investigation (IR) in Multan, was appointed as the Inquiry Officer on January 4, 2024. He conducted a thorough investigation and submitted his report on March 4, 2024, concluding that the charges against Arif Javed were substantiated. The Inquiry Officer recommended the imposition of a major penalty of compulsory retirement.

Following the inquiry report, a show cause notice was issued to Arif Javed. In response, he requested a personal hearing, which was granted via video link. During the hearing, Javed admitted to overlooking the chargeability of withholding tax due to a heavy workload and health issues. He argued that no revenue loss occurred as the orders were revised, creating a tax demand that is currently under appeal.

However, the FBR added, after reviewing all aspects of the case, including the inquiry report and Javed’s defense, Member (Admn/HR) found that the oversight was neither accidental nor justified. The orders were passed intentionally despite clear indications from the DRRA that M/s Saad & Co had failed to meet their withholding tax obligations, requiring action under Section 161 of the Income Tax Ordinance, 2001.

The Member (Admn/HR) concluded that Arif Javed was guilty of inefficiency under Rule 3(a) of the Civil Servants (Efficiency & Discipline) Rules, 2020. Consequently, the major penalty of compulsory retirement was imposed on Javed under Rule 4(3)(c) of the same rules.

This decision of the FBR underscores organization’s commitment to maintaining strict disciplinary standards and ensuring accountability within its ranks, particularly in cases involving significant financial implications for the national exchequer.