Islamabad, December 1, 2025 – The Federal Board of Revenue (FBR) has reversed a major disciplinary action against a senior auditor implicated in a Rs238.42 billion tax fraud case, downgrading the penalty from dismissal to a minor sanction of withholding promotion for three years.
The case originated after the Prime Minister’s Office shared an intelligence report identifying a massive tax fraud. As a result, disciplinary proceedings were launched under the Civil Servants (Efficiency and Discipline) Rules, 2020 against Altaf Hussain Khurho, then Senior Auditor (Time Scale 17) at Regional Tax Office-I (RTO-I) Karachi.
An inquiry was conducted by Aftab Alam (IRS/BS-20), Director General (OPS), Directorate of International Taxes Operation, who submitted his report on July 17, 2025. The inquiry initially recommended a minor penalty of withholding promotion for one year.
However, the Authority Member (Administration/HR) later imposed the major penalty of removal from service, arguing that the recommended punishment did not match the severity of the lapses committed by the auditor. A notification to this effect was issued on October 17, 2025.
Khurho subsequently filed a departmental appeal, requesting the suspension of the dismissal order and an opportunity for a personal hearing. During the appeal proceedings, the Appellate Authority observed that while charges of inefficiency were clearly established—such as failure to pursue arrest of accused individuals, lack of follow-up on bail cancellation, and failure to submit a detailed challan—there were also significant mitigating factors.
The records showed that Khurho, acting as investigation officer, successfully blocked fake input tax worth Rs237.137 billion, representing 99.46% of the total fraudulent output tax. Additionally, he facilitated the recovery of Rs117.413 million, nearly 59% of the fake output tax injected into the system.
Taking both the misconduct and the mitigating contributions into account, the Secretary Revenue Division / Chairman FBR, serving as the Appellate Authority, concluded that neither the initial minor penalty nor the subsequent dismissal was proportionate. The Appellate Authority therefore converted the major penalty of removal into a minor penalty of withholding promotion for three years, under Rule 4(2)(d) of the Civil Servants (Efficiency and Discipline) Rules, 2020.
Following the decision, Altaf Hussain Khurho has been reinstated, and the period between his removal on October 17, 2025, and reinstatement will be treated as leave of the type due.