FBR Removes Senior Officer for Failing to Investigate Rs. 238 Billion Sales Tax Fraud

The Federal Board of Revenue has dismissed a senior auditor for negligence in investigating a mega sales tax fraud in Karachi, involving an alleged loss of Rs. 238.4 billion to the national exchequer.

According to an official notification issued on Monday, Altaf Hussain Khurho, Senior Auditor (BS-17) at Regional Tax Office-I, Karachi, has been removed from service under the Civil Servants (Efficiency and Discipline) Rules, 2020.

The case traces back to an FIR No. 01/2024, registered on March 26, 2024, against Awais Bhutta of M/s New Metro Footwear Co. and 12 others for committing massive tax fraud.

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An intelligence report from the Prime Minister’s Office later pointed to serious lapses in the investigation, prompting disciplinary action against Khurho.

The inquiry, led by Aftab Alam (IRS/BS-20), Director General (OPS), Directorate General of International Taxes Operations, initially found Khurho guilty of inefficiency and recommended a minor penalty of withholding promotion for one year.

However, upon reviewing the case, the Member (Administration/HR) deemed the punishment too lenient given the scale of negligence and loss to the exchequer.

During hearings, the departmental representative said the accused officer failed to take necessary steps during the probe and neglected his duty to pursue bail cancellation of two accused who had not joined the investigation.

Records showed that Khurho made no significant effort to strengthen the case or produce any meaningful findings in the final challan.

The inquiry also revealed that six beneficiaries received illegal input tax adjustments amounting to Rs. 197.27 million. Out of this, Rs. 117.41 million has been recovered, while Rs. 79.86 million remains outstanding.

Despite Khurho’s claim that he performed his duties diligently and that prosecution was the responsibility of the legal team, the authority concluded that his inaction amounted to criminal negligence.

The FBR’s disciplinary authority stated that the investigation officer’s inefficiency directly contributed to the government’s financial losses and therefore warranted removal from service.