KARACHI: Appeals Tribunal Inland Revenue (ATIR) has started refusing to admit stay applications without recovery notice under Section 138 of the Income Tax Ordinance, 2001.

The issue was surfaced by the Karachi Tax Bar Association (KTBA) through its letter sent to the newly-appointed chairman FBR.

The KTBA believes that this decision leaves taxpayers completely exposed to coercive recovery measures without due legal process.

As per a notice issued by ATIR headquarters on August 2, 2023, stay requests will now be rejected unless accompanied by a recovery notice under Section 138 of the Income Tax Ordinance, 2001.However, Section 138 does not prescribe any minimum time limit before recovery action can commence, KTBA said.

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The tax department is known to initiate swift recovery under Section 140, often within days of the appellate order, before the taxpayer can secure respite through a stay order, the letter said.

“By closing doors on stay applications without section 138 notice, ATIR has effectively denied legal remedy to taxpayers facing arbitrary recovery. This is a major departure from ATIR’s past practice of granting stays against hasty enforcement, which it has deemed illegal and unethical in multiple judgments,” KTBA opined.

The KTBA has argued that by taking away the right to file for a stay, ATIR has infringed on the fundamental rights of taxpayers and requested the chairman FBR to take corrective measures to halt this practice.

Copyright Business Recorder, 2023