Information of account holders: FBR restrained from taking any coercive action The Sindh High Court has passed an interim order restraining FBR from initiating any coercive action against NIB for getting the information of account holders. NIB challenged the vires of the amendment brought into the Income Tax Ordinance 2001 in 165 (1) and inserted 165 (A) through the Finance Act 2013 before a divisional bench of Sindh High Court and requested for an interim order restraining the FBR. The bench comprising of Justice Faisal Arab and Justice Salauddin Panhwar passed an order that Attorney General for Pakistan should appear before it on 9th October 2013 and represent federation as a petitioner has challenged the vires of the legislation; meanwhile an interim order is passed restraining the respondents from taking any coercive action against the bank. NIB Bank Ltd through Nafees A Siddiqui had filed a Constitution Petition in the High Court of Sindh at Karachi, praying for declaring these amendments ultra vires of the Constitution. In the petition, it was contended that the amendment brought out in the Income Tax Ordinance by virtue of an explanation inserted after Section 165 (1) of the Ordinance and the insertion of new Section 165(A) is violation of the Constitutional Provisions insofar as the said amendments have been made by way of Money Bill through the Finance Act 2013. It was argued that through this amendment FBR would have the unrestricted access to all accounts in bank because banks and financial institutions are asked to submit monthly reports of all transactions, all details of accounts including those related to credit cards. This constitutes an unlawful intermission in the secrecy of accounts which is against the fundamental rights of citizens as guaranteed in the constitution, according to the petitioner. The petitioner contended that through this amendment, the provision of special law overridden other general laws, which militated against the principle of law on the subject. Banks are protected regarding the disclosure of accounts information according to Section 3 and 9 of the Protection of Economic Reforms. Such protection cannot be taken away by FBR; they cannot be given unbridled powers through the amendment in question, according to the petitioner. The petitioner further said that this amendment would encourage people to stay away from the banking system and generate a parallel economy, "which is already destroying the economy." It will also cause an adverse impact on savings and investments, "which are already very low." If this amendment is implemented then people would not go to bank and prefer to have dollars through non-banking channels, which would lead to dollarisation of economy. This will further devalue the Pak rupee and "this is indeed one of the reasons behind the current depreciation of the Pak rupee.
Posted on: Sat, 21 Sep 2013 12:51:24 +0000