ISLAMABAD: The Federal Board of Revenue (FBR) has lost up to 90 per cent cases in the appellate tribunal due to poor legal representation.

According to figures presented by the audit office before the Public Accounts Committee (PAC) - of the 751 appeals only 80 were decided in favour of the board while 671 [90pc] were decided against it.

In 2008, of the 1,383 appeals 474 were decided in favour of the FBR while 909 [66pc] went against the board. Likewise, in 2007 of 6,521 only 993 were decided in favour of the FBR while 5,528 [85pc] were decided against it.

The audit observed that an “analytical review of cases decided by Income Tax Appellate Tribunal showed that the departmental representative could not defend cases properly”.

“It is envisaged from the above that cases decided against the department were more in number as decided in favour of department. FBR needs to probe the reasons for failure to defend the cases to save the loss of revenue,” said the audit report on the FBR’s accounts for the year 2010-2011.

Besides, FBR Chairman Tariq Bajwa conceded before the PAC that the success rate in the cases adjudicated by the superior judiciary was also not encouraging.

He told the PAC that a couple of years ago there were 1,900 lawyers on the FBR’s panel. The number of lawyers has now been reduced to 700 and the success ratio was improving, he said. He added that the lawyers on the panel were being paid on a case-to-case basis. According to him, the FBR paid a fee of around Rs30,000 per case to its lawyers.

“You cannot win the cases as major tax evaders and billions of rupees defaulters get services from expensive lawyers,” said Sheikh Rashid Ahmed, a PAC member.

Chairman of the committee Khursheed Shah remarked that big names in the legal fraternity did not take fees but made deals with tax evaders and defaulters instead. “They fix a certain percentage of the total amount in question for winning the case and get millions of rupees,” he claimed.

“You should engage the best lawyers and their fee should be commensurate to the size of recovery,” he suggested.

Mr Bajwa suggested that if the FBR was empowered to decide the cases through alternate dispute resolution (ADR) mechanism and its decision was treated as final it would not only reduce litigation but would also improve recoveries.

The auditor general of Pakistan (AGP) Rana Asad Amin suggested that his office could conduct a special audit of FBR’s legal side. He said loopholes in the FBR’s legal system would be identified in the audit which may recommend measures for improving the system.

The PAC agreed to the AGP’s proposal. Mr Shah suggested that the there should be 100 to 200 lawyers on the panel of the FBR.

Published in Dawn, October 8th , 2015

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