The Appellate Tribunal of Inland Revenue (ATIR), the final appellate forum provided under provisions of Income Tax Ordinance of 2001, would become too feeble to give impartial decisions after introduction of amendments proposed in the Finance Bill of 2012, Karachi Tax Bar Association's (KTBA) members said on Friday.
In a letter sent to the ministry for law and justice, the KTBA said that since the introduction of the Income Tax Act of 1922, the chairman of the ATIR had always been a judicial member, which was ensured through provisions of law in the Income Tax Ordinance, 2001.
Citing Section 130(5) of the Income Tax Ordinance 2001, tax bar members said that it provided that the chairman of the tribunal shall be a judicial member except in special circumstances. However, an attempt was being made to remove this requirement through proposed amendments. Now, the KTBA said, even an accountant member of BS-20 or BS-21 of the Federal Board of Revenue (FBR) could become the tribunal's chairman.
Terming it a violation of law, the KTBA expressed resentment over the said amendments and said that a senior judicial member should chair the judicial forum. It said the prescribed qualification for judicial member of ATIR under Section 130(3) of the Ordinance was that the person should have exercised powers of a district judge and he/she was qualified to be a judge of a high court or was serving as a high court advocate.
The same section of the ordinance also prescribed the qualification for an accountant member of ATIR. According to rules, the person "shall be an officer of the Inland Revenue equivalent to the rank of a regional commissioner or a commissioner to Inland Revenue or commissioner Inland Revenue (Appeals) with at least five years of experience as commissioner".
The KTBA said this requirement for an accountant member in the ATIR was now proposed to be reduced to three years through the Finance Bill. The association urged the ministry concerned to reject the proposed amendments to make the tribunal effective and impartial.
In order to have an impartial and judicious appellate tribunal, the KTBA recommended that seniority test as was "held by the Hon'ble Supreme Court in Al Jehad's case may also be put as condition precedent". Moreover, it said the authority concerned should intervene into the matter and both proposed amendments in sections 130(5) and 130(3) of the Income Tax Ordinance 2001 should also be removed from the Finance Bill to ensure ATIR's independence and transparency in decisions.
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