ATIR urges FBR to act efficiently in executing tax demands

ISLAMABAD: The Appellate Tribunal Inland Revenue (ATIR) has held that long silence and inaction by Federal Board of Revenue’s officials in recovering confirmed tax demand constitutes a sufficient ground to condone delays in filing appeals by the taxpayers before the ATIR.

It is reliably learnt that appeal was argued by Lahore based tax lawyer Waheed Shahzad Butt, who emphasized that in revenue matters, courts and tribunals should adopt a more lenient approach toward taxpayers seeking condonation of delays. Tax lawyer contended that such matters should not be decided solely on technical grounds but rather evaluated with a broader understanding of justice and fairness.

The ATIR underscored the mandatory requirement for the service of orders on taxpayers before initiating any tax recovery proceedings. The decision highlighted that failure to properly serve the taxpayer creates a procedural lacuna, undermining the legitimacy of recovery actions.

The ruling sets a precedent that aligns with the principles of natural justice and taxpayer rights. It calls upon the FBR to act promptly and efficiently in executing tax demands while ensuring that procedural safeguards, such as serving the taxpayer, are strictly adhered to, Waheed added.

Appellant stated: “We were completely unaware of any confirmation of outstanding tax demand or the issuance of any adverse order until receipt of recently recovery notice dated 04.12.2024 received on 5th day of December 2024, the first recovery notice received by the appellant, is the instant recovery notice, since the passing of any appellate order.

We have conducted a thorough in-house investigation and can confirm that no prior notice for adverse appellate order under any provisions of Income Tax Ordinance, 2001 was either served at appellant’s registered address. This humble applicant is aggrieved with the meaningful silence on the part of sub-ordinate tax employees, as it is, in our honest and considered view, in manifest breach of the provisions of Article 4, 5(2) & 10A of the Constitution read with binding verdicts.”

Regarding the miscellaneous application for condonation, neither any written notice nor any appellate order was ever issued/served by the appellate forum. There is complete silence on the part of RTO tax functionaries during the period till 04.12.2024 (when recovery notice has been issued in terms of Section 138). In the circumstances, the delay is not deliberate, therefore, we accept the request of the taxpayer and condone the delay, the ATIR ordered.

Copyright Business Recorder, 2025