Alternate dispute resolution under ordinance

Alternate dispute resolution under ordinance

Section 134A of the Income Tax Ordinance, 2001 explains alternate dispute resolution under ordinance.

The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

Following is the text of Section 134A of Income Tax Ordinance, 2001:

134A. Alternative Dispute Resolution.— (1) Notwithstanding any other provision of this Ordinance, or the rules made thereunder, an aggrieved person in connection with any dispute pertaining to—

(a) the liability of tax against the aggrieved person, or admissibility of refunds, as the case may be;

(b) the extent of waiver of default surcharge and penalty; or

(c) any other specific relief required to resolve the dispute,

may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an Appellate Authority, except where interpretation of question of law is involved having effect on other cases:

Provided that if the issue involves a mixed question of fact and law, the Board, while taking into consideration all relevant facts and circumstances, shall decide whether or not ADRC may be constituted.

(1A) The application for dispute resolution shall be accompanied by an initial proposition for resolution of the dispute, from which, the taxpayer would not be entitled to retract.

(2) The Board may, after examination of the application of an aggrieved person, appoint a committee, within thirty days of receipt of such application in the Board, comprising,—

(i) Chief Commissioner Inland Revenue having jurisdiction over the case:

(ii) two persons from a panel notified by the Board comprising of chartered accountants, cost and management accountants, advocates, having minimum of ten years’ experience in the field of taxation and reputable businessmen.

(3) The Board shall communicate the order of appointment of committee to the court of law or the appellate authority where the dispute is pending and the Commissioner.

(4) The Committee appointed under sub-section (2) shall examine the issue and may, if it deemed necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute through consensus, within sixty days of its appointment extendable by another thirty days for the reasons to be recorded in writing.

(5) The recovery of tax shall be stayed on the constitution of committee till the final decision or dissolution of the committee, whichever is earlier;

(6) The decision of the committee under sub-section (4) shall be binding on the Commissioner when the aggrieved person; being satisfied with the decision, has withdrawn the appeal pending before the court of law or any appellate authority and has communicated the order of withdrawal to the Commissioner:

Provided that if the order of withdrawal is not communicated to the Commissioner within sixth days of the service of decision of the committee upon the aggrieved person, the decision of the committee upon the aggrieved person, the decision of the committee shall not be binding on the Commissioner.

(6A) If the committee fails to decide within the period mentioned in sub section (4), the Board shall dissolve the committee by an order in writing and may reconstitute another committee and the provisions of subsections (2), (3), (4), (5) and (6) shall apply mutatis mutandis to the second committee

(7) If the Second Committee fails to decide within time limit prescribed under sub-section (4), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the court of law or the appellate authority where the dispute is pending.

(8) The Board shall communicate the order of dissolution to the court of law or the appellate authority and the Commissioner.

(9) The aggrieved person, on receipt of the order of dissolution, shall communicates it to the court of law or the appellate authority, where the dispute is pending.

(10) The aggrieved person may make the payment of income tax and other taxes as decided by the committee under sub section (4) and all decisions and orders made or passed shall sand modified to the extent.

(11) The Board may prescribe the amount to be paid as remuneration for the services of the members of the committee, other the member appointed under clause (i) of sub-section (2)

(12) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.

(Disclaimer: The text of the above section is only for information. Team makes all efforts to provide the correct version of the text. However, the team is not responsible for any error or omission.)

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