ISLAMABAD: Finance Bill 2024 would amend Tax Laws (Amendment) Act, 2024 to deal with emerging legal issues being faced by taxpayers in filing of appeals after enactment of the said Act 2024.
Sources told Business Recorder that the Section 126A of the Income Tax Ordinance, 2001 inserted vide Tax Laws (Amendment) Act, 2024 provides the pecuniary limit for filing of Appeal before the Commissioner (Appeals) or Appellate Tribunal (Inland Revenue) as the case may be.
On the other hand, Section 127 of the Income Tax Ordinance provides for the filing of Appeal before the Commissioner (Appeals).
The provisions of Section 126A of the Income Tax Ordinance are subject to other provisions of this Act thereby apparently creating a confusion whether the pecuniary limit as stipulated in section 126A of the Ordinance is to be followed or otherwise. This issue is being examined and necessary amendment, if required to align the provisions of the two sections shall be made in the upcoming Finance Bill 2024. The FBR has also informed the Attorney General of Pakistan in this regard, officials added.
Taxpayers have already challenged the Tax Laws (Amendment) Act, 2024 in courts,
raising serious questions regarding transparency and fairness in the appeal process. If an appeal is not decided within the period of 90 days, the Appellate Tribunal Inland Revenue is required to seek condonation from the Minister of Law and Justice and such condonation shall not be extended beyond 90 days.
The High Court may stay the recovery of tax up to six months but “subject to deposit with the assessing authority of not less than 30 percent of the tax determined by the Appellate Tribunal.”
Besides, enhancing the court fees as high as 50,000 for the High Court is also an unjustified and harsh requirement, for those cases having smaller liabilities would not prefer to seek a remedy from the High Court.
The petitioners in courts argued the Tax Laws (Amendment) Act, 2024, is ultra vires to the Constitution as it does not follow the procedure warranted by Rule 120 and 122 of the Rules of Procedure and Conduct of Business in the National Assembly, 2007.
Presently, an appeal to the Commissioner (Appeals) shall lie where the value of assessment of tax or, as the case may be, refund of tax does not exceed Rs10 million under the amended Sales Tax Act.
An appeal to the Appellate Tribunal Inland Revenue (ATIR) shall lie where the value of assessment of tax or, as the case may be, refund of tax exceeds Rs 10 million.
Through amendment in the Income Tax Ordinance 2001, the pecuniary jurisdiction in appeals revealed that an income tax appeal to the Commissioner (Appeals) shall lie where the value of assessment of tax or, as the case may be, refund of tax does not exceed Rs20 million. An income tax appeal to the ATIR shall lie where the value of assessment of tax or, as the case may be, refund of tax exceeds Rs20 million.
The pecuniary jurisdiction of federal excise appeals revealed that an appeal to the Commissioner (Appeals) shall lie where the value of assessment of tax or, as the case may be, refund of tax does not exceed Rs 5 million.
An appeal to the ATIR shall lie where the value of assessment of tax or, as the case may be, refund of tax exceeds Rs 5 million, the Act said. Within 30 days of the communication of the order of the appellate tribunal or, as the case may be, Commissioner (Appeals), the aggrieved person or the Commissioner may prefer an application in the prescribed form along with a statement of the case and complete record of the Appellate Tribunal or, as the case may be, Commissioner (Appeals) to the High Court, stating any question of law or a mixed question of law and fact arising out of such order, Tax Laws (Amendment) Act, 2024 added.
Copyright Business Recorder, 2024
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