Thapa's firm filed no income statement for 8 yrs

KATHMANDU, Sept 11: Revenue officials have found that Legal Advisors Forum, the law firm run by senior advocate Shambhu Thapa, has deliberately not submitted any income statement for the last several years in a apparent bid to hide the real income. However, the firm has been paying income tax on piecemeal basis, without declaring estimated income in written form.



“Though Thapa´s firm has been paying income tax regularly, albeit in meager amount, yearly income statements have not been submitted for more than eight years. The firm´s intention seems to be to evade tax by covering up real income,” an official at the Inland Revenue Department, told Republica on Wednesday.[break]



The official said the law firm has been paying around Rs 40,000- Rs 50,000 each quarter to the Inland Revenue Office Area No. 1, Babar Mahal, which keeps records of taxes paid by the firm.



Any service firm having an annual turnover of more than Rs million has to register under VAT. Similarly, firms with incomes of over Rs 2 million have to pay 25 percent of their profits as income tax.



“If the amounts being paid by the firm are anything to go by, Thapa´s income hovers around just Rs 1 million, which is nominal compared to his estimated income level,” said the official. Thapa is one of the leading lawyers in the capital.



The revenue officials also said Thapa´s firm has not been paying income tax along with submission of income statements since fiscal year 2005/06. But the company has been paying VAT regularly. As per existing provisions, a tax payer has to declare and pay income tax along with an income statement.

Besides Thapa´s firm, Janachetana Law Firm at Dillibazaar owned by advocate Uddav Kumar KC and Bim Engineering Consultancy at New Road run by engineer Mahesh Kumar Singh were raided on Friday by a Department of Revenue Investigation (DRI) team on suspicion of tax evasion.



The team also visited Design Sales Engineering Company at Naxal, which is promoted by Arun Dev Pant and BK Agrawal & Company, an accounting consulting firm registered in the name of BK Agrawal.



However, Thapa has claimed that his firm has been paying tax honestly and had no intention of evading revenue dues. He has also claimed that the raid at his firm was against the spirit of the interim constitution.



The Supreme Court (SC) on Sunday ordered the DRI not to proceed with the investigations into suspected tax evasion by Thapa´s law firm.

Related story

Controversial amendment to Income Tax Act: Manipulation to lega...