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The officers of excise and taxation department, motor vehicles registration authorities, vehicles booking companies and property registration authorities have no legal power to register/book any vehicle/property of non-filer, even after payment of penalty by such persons for committing offence of entertaining non-filers of income tax returns.

Responding to a query on status of registration of vehicles/properties of non-filers after payment of penalty by booking companies/authorities, sources told Business Recorder that after payment of penalty specified in the amended Finance Bill 2018 by the relevant authority for registering/booking of vehicle of non-filer, the concerned authority has no power to give status of filer to a non-filer. As officers of the said authorities are barred from registration of vehicles/properties of non-filers, they cannot register such vehicles or properties in any circumstances.

When asked about rationale of proposing penalty for the said categories of persons, sources said that the penalty regime under the amended Finance Bill 2018 would ensure that no officer working in excise and taxation department, motor vehicles registration authorities, vehicles booking companies and property registration authorities would entertain applications of non-filers.

A new section 227C was inserted through the Finance Act, 2018 whereby applications for booking, registration or purchase of a new locally manufactured motor vehicle or for the first registration of an imported vehicle shall not be accepted or processed by any vehicle registering authority or a manufacturer of a motor vehicle unless the person is a filer as defined in section 2(23A) of the Income Tax Ordinance. Moreover, any authority responsible for registering, recording or attesting transfer of any immovable property exceeding Rs 5 million rupees shall not accept or process any application or request by a person for registering, recording or attesting transfer of any immovable property exceeding Rs 5 million unless such person is a filer as defined in section 2(23A) of the Ordinance.

In order to enforce the said provision of law, the amended Finance Bill 2018, the government has decided to penalize the motor vehicles registration authorities, property registration authorities and vehicles booking companies where such authorities book/register or sell vehicles/properties to non-filers of income tax returns.

The officers of excise and taxation department, motor vehicles registration authorities and property registration authorities would be required to deposit penalty from their monthly government salary for committing offence of booking/registration or entertaining non-filers of income tax returns, sources said.

The government has proposed amendment in the section 182 (Offences and penalties) of the Income Tax Ordinance 2001 through amended Finance Bill 2018.

Under section 182 (Offences and penalties) of the Income Tax Ordinance 2001, any person who commits any offence shall be liable to specified penalties. Under section 227C of the Income Tax Ordinance 2001, any application for booking, registration or purchase of a new locally manufactured motor vehicle or for first registration of an imported vehicle shall not be accepted or processed by any vehicle registering authority of Excise and Taxation Department or a manufacturer of a motor vehicle respectively, unless the person is a filer and any application or request by a person to any authority responsible for registering, recording or attesting transfer of any immovable property, exceeding Rs 5 million, for registering or attesting the transfer shall not be accepted or processed by such authority, unless the person is a filer.

Through amended Finance Bill 2018, 3 percent of the value of motor vehicle/property would be paid as penalty by person who would register or accept application or process application of non-filer of income tax return. Industrialist who would accept/process application of non-filer for purchase of locally manufactured motor vehicle would be subjected to 5 percent of value of the motor vehicle, as penalty.