ISLAMABAD: President Asif Ali Zardari has dismissed a representation filed by the Federal Board of Revenue (FBR) against the Federal Tax Ombudsman (FTO), rejecting FBR’s demand that taxpayers furnish a Surety Bond before receiving tax refunds arising from appellate orders.
The case originated from complaints filed by a foreign-based company against the corporate tax office (CTO), Islamabad, over its failure to implement appellate orders for tax years 2007 and 2009, amounts withheld for nearly a decade despite clear relief granted in the taxpayer’s favour.
The FTO had directed the concerned Commissioner to give appeal effect and process the outstanding refund applications.
READ MORE: FTO receives record 35,716 complaints against FBR in 2025
FBR contested this before the President’s Secretariat, arguing that its pending references before the Islamabad High Court against the appellate orders should automatically suspend their implementation. It further contended that based on an earlier presidential precedent the taxpayer should be required to furnish a surety bond before any refund is released.
The President rejected both arguments in their entirety. On the surety bond issue, the Secretariat noted that while such a condition had been imposed in one isolated earlier instance, it had not been applied in scores of similar cases decided over the preceding two years, rendering FBR’s reliance on that precedent inconsistent and without merit.
On the pending High Court references, the Secretariat affirmed the FTO’s finding that no stay or restraining order had been issued against the appellate orders. It further clarified that no provision of the Income Tax Ordinance, 2001 automatically suspends the operation of a lower forum’s order merely because a reference has been filed before a superior court. FBR’s failure to give appeal effect within the two-month statutory period under Section 124(4) was found to constitute delay, neglect, and inefficiency amounting to maladministration.
Advocate Waheed Shahzad Butt, who represented the taxpayer before the FTO and the President’s Secretariat, described the ruling as a landmark development for Pakistan’s taxpayer community. For years, FBR’s insistence on surety bonds and procedural delays has effectively denied taxpayers the benefit of their appellate victories, forcing them into prolonged and costly litigation.
By rejecting the surety bond condition on grounds of consistency and by affirming that pending references do not automatically suspend appeal effect, the President has reinforced a fundamental principle, appellate relief must be implemented promptly and without extrajudicial conditions, Butt added.
Copyright Business Recorder, 2026
Comments