Affected party (taxpayer): Assessment order communication mandatory: ATIR

ISLAMABAD: The Appellate Tribunal Inland Revenue (ATIR) has ruled that the communication of the assessment order to the affected party (taxpayer) is essential for the order to attain legal efficacy within the statutory timeframe.

Through an order issued by the ATIR, it stated that an order passed internally on a file, but not communicated to the affected party (taxpayer) within the legally prescribed time limit, cannot be deemed to have been validly passed within that period.

Prior to granting any extension in time for passing of amended order under Section 122(5A) of the Income Tax Ordinance, 2001, it is the bounden duty of the Commissioner to act impartially, providing a fair opportunity of hearing to all rival parties.

It is reliably learnt that a landmark order has been passed by the ATIR on arguments made by tax lawyer Waheed Shahzad Butt wherein the ATIR held that communication of the order to the affected party is essential for the order to attain legal efficacy within the statutory timeframe. Merely signing or noting it on a file without informing the concerned party fails to meet the legal standard.

Shahzad Butt Advocate, who represented the appellant, hailed the decision as a landmark in administrative and tax jurisprudence. He stated, “This ruling is a critical reaffirmation that authorities must act transparently, within the bounds of the law, and with full regard to the rights of the parties involved. It sets a powerful precedent for future adjudication where procedural fairness is at stake.”

ATIR order states “Notice was issued on 08.01.2024 and the amended order has been passed on 08.11.2024. Resultantly, it has been proved that the order has been passed after a lapse of 305 days from the issuance of show cause notice, while as per statement of the author extension in time was sought from the concerned Commissioner after lapse of 239 days on 03.09.2024. A total period of 240 days has been provided by the legislature to dispose of the show cause notice (SCN)in the shape of assessment order.

It is now settled principle of law that prior to granting extension, it is the bounden duty of the CIR to provide an opportunity of hearing to the rival parties and act like a neutral unbiased umpire. However, in the instant case, admittedly no such opportunity has been granted to the appellant, which renders the extension order illegal & void ab-initio. The impugned amended order is thus time barred, ATIR order added.

Copyright Business Recorder, 2025