Court-protected period: ATIR DB Islamabad annuls Super Tax default surcharge

ISLAMABAD: A two-member Bench of Appellate Tribunal Inland Revenue Islamabad has set aside default surcharge on Super Tax during court-protected period.

According to an order (ITA.773/IB/2026) of the ATIR division bench Islamabad issued on Tuesday, ATIR has ruled that the taxpayer was rightly liable to pay Super Tax under Section 4C of the Income Tax Ordinance, 2001.

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However, the levy of default surcharge under Section 205 for the period during which the appellant’s obligation to pay remained regulated by the interim and final orders of the superior courts is without lawful authority and cannot be sustained.

The Tribunal observed that constitutional guarantees prohibit the imposition of adverse fiscal consequences on a litigant who has acted in compliance with binding judicial orders. Consequently, it set aside the default surcharge for the protected period while allowing the appeal to that extent.

The impugned order levying default surcharge for the said protected period is, therefore, set aside to that extent. Subject to the above observations, the appeal stands allowed in the aforesaid terms, it added.

Copyright Business Recorder, 2026