ISLAMABAD: Federal Tax Ombudsman (FTO) has declared that the dissolution of a Supreme Court–directed Alternate Dispute Resolution Committee (ADRC) by the Federal Board of Revenue (FBR) to resolve tax disputes cannot be termed as “maladministration”.
In a new order issued by the FTO, the FTO has directed the FBR, in order to strengthen the ADR regime and ensure compliance with the Supreme Court’s directions, FBR may constitute a fresh ADRC, with consent of Complainant, ensuring independence and absence of apparent conflict.
FTO order reads “After dissolution of the ADRC, a copy of its decision dated 23.12.2025 was received through WhatsApp to the Member (IR-Operations) from the Hon’ble Chairperson (i.e. Justice Shahid Jamil Khan), which was signed by two members.
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The Complainant also informed the Board, vide letter dated 16.01 .2026, that the matter was decided by the Hon’ble Chairperson during meeting held on 23.12.2025 and the decision was typed in front of all members of the ADRC, the Commissioner concerned and the team. The Hon’ble Chairperson dictated the decision and announced the same”.
The tax department informed the FTO that under section 134A(11)of the Income Tax Ordinance, 2001, if the Committee fails to decide within the period of sixty days under section 134A(5) ibid, the Board shall dissolve the Committee by an order in writing and the matter shall be decided by the court of law or the appellate authority where the dispute is pending under litigation.
vi. Since, no decision was made till 29.12.2025, the ADRCs were dissolved by the Board. Dissolution of the ADRC, vide order dated 12.01.2026, was made as no decision in terms of section 47A of the Sales Tax Act, 1990, read with section I 34A(5) of the Income Tax Ordinance, 2001 was made within the statutory time-limit (i.e. 60 days), FBR added.
The FTO emphasized that the ADR mechanism, introduced in line with directions of the Supreme Court of Pakistan, was intended to offer taxpayers a neutral, transparent, and time-bound avenue for resolving disputes. For such a mechanism to function credibly, the FTO stressed, procedural discipline, accurate documentation, and strict adherence to statutory timelines are indispensable. Given these documented deficiencies, the FTO concluded that FBR’s dissolution order does not amount to maladministration.
In these circumstances, the dissolution order dated 12.01.2026, passed under Section 134A(11’), cannot be termed as maladministration within the meaning of Section 2(3) of the FTO Ordinance.
This conclusion is confined strictly to the question of maladministration and does not determine the enforceability of the alleged ADRC decision, FTO order added.
When contacted, Shehryar Ansari, Director of the complainant company said that directions have been issued to engage in a fresh ADRC process, starting again from scratch, after having already participated in a full-fledged ADR process and on its account obtained a favourable result duly signed by majority members including a former judge of Lahore High Court, he added.
The FTO has recommended the FBR to frame and notify detailed SOPs governing ADRC proceedings, including, formal notices and cause lists; quorum and participation requirements; written recording of extensions; mandatory conflict of interest disclosure; formal signing and dispatch of decisions, FTO ordered.
Copyright Business Recorder, 2026
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