Islamabad High Court rules that FBR can initiate investigations without pending assessment or audit proceedings, directing officials to proceed in accordance with the law.

ISLAMABAD: The Islamabad High Court (IHC) has dismissed petitions filed by WATIM Dental College and WATIM Medical College, upholding the Federal Board of Revenue’s (FBR) investigation and enforcement powers under Section 175 of the Income Tax Ordinance, 2001.

A division bench comprising Justice Raja Inaam Ameen Minhas and Justice Shahrukh Arjumand announced the verdict on petitions challenging investigation and visit authorisations issued on December 11, 2024, and subsequent proceedings.

The court ruled that investigations under Section 175 do not require any prior assessment or audit proceedings to be pending.

Referring to a judgment of the Federal Constitutional Court, the bench observed that the initiation of proceedings under the provision was not conditional upon any earlier proceedings.

It further held that the powers granted to the FBR under Section 175 were legally valid. The absence of assessment powers with the Directorate did not affect its authority to conduct investigations.

According to the judgment, WATIM Dental College received Rs1,053,540,081 in its bank accounts during tax years 2020 to 2023 despite filing nil income tax returns.

The court also noted that the Pakistan Medical and Dental Council had approved the college for 50 BDS students, while the WATIM School of Paramedics was an undisclosed activity.

The IHC directed FBR officials to continue proceedings in accordance with the law.

Advocate Hafiz Ehsan Khokhar represented the FBR in the case.