The Appellate Tribunal Inland Revenue (ATIR) Lahore, while directing the Federal Board of Revenue (FBR) to detach the bank accounts of a registered company, declared that the tax recovery in any form should not be made till disposal of appeal by an independent forum. According to a judgment of ATIR Lahore in favour of a registered company here on Saturday, ATIR Lahore said that the tax department is advised not to pursue the recovery, in any manner, in this case till decision of the main appeal by the Commissioner Appeals.
Keeping in view the directions issued by the superior courts that recovery should not be made till disposal of appeal by an independent forum, the departmental authorities are also directed to detach the bank accounts till the decision by the Commissioner Inland Revenue Appeals.
Details revealed that the registered person through the titled appeal has assailed the order dated 17.4.2015 passed by the CIR [Appeals-IV], Lahore whereby he has refused to grant the stay against recovery of tax demand whereas the miscellaneous application has been referred from interim relief against recovery proceedings initiated by the Department of recovery of an amount of Rs 132,455,360 in respect of Tax Year 2009.
The authorized representative submits that a tax demand of Rs 132,455,360 was created by the assessing authority, which was challenged in first appeal before the learned CIR[Appeals-IV], Lahore and is still pending for adjudication. He further stated that during the pendency of appeal the department has initiated recovery proceedings and has started coercive measure to recover the disputed tax demand, therefore, an application for grant of stay was filed before the CIR[Appeals-IV], Lahore who vide order dated 17.4.2015 rejected the same. The learned Counsel for the applicant vehemently contended that the appellant/taxpayer has prima facie good arguable case and there is every likelihood that the appeal will meet success. He further submitted that the tax demand created by the assessing authority has still to pass the test of appeal and recovery of the same till the disposal of appeal is unjustified and immature. Therefore, the learned CIR[A] was not justified in rejecting the request for grant of stay. It is, therefore, requested that the order of learned CIR[A] rejecting the request for grant of stay may be annulled and stay against recovery of the aforesaid tax demand be granted till the disposal of appeal by the learned first appellate authority.
Referring to a court decision, court said that in all fairness, equity and justice, an assessee should not be forced to pay a demand created by a Revenue authority unless the order creating such demand has undergone the scrutiny of at least one independent forum." The ATIR said that the appeal as well as the stay application is disposed of accordingly.