The Federal Board of Revenue (FBR) has made the filing of tax appeals mandatory through electronic means, effective from January 1, 2021. This shift to electronic filing aims to streamline the process and reduce the administrative burden on taxpayers and tax authorities alike.
The FBR issued SRO 1315(I)/2020 on December 9, 2020, amending the Income Tax Rules, 2002, to introduce this change. Prior to this, a draft notification was issued on November 26, 2020, through SRO 1262(I)/2020 to seek feedback from stakeholders.
According to the revised rules, the appeal process will now be entirely electronic, utilizing the Iris web portal, a platform designed to facilitate online tax-related activities. Rule 76 of the Income Tax Rules, 2002 has been substituted with a new set of provisions under Rule 76O, ensuring that appeals are filed electronically.
One of the major updates under these rules is the requirement for taxpayers to file their appeals on the Iris web portal. The new process stipulates that the date of filing the appeal will be considered the date on which it is submitted electronically, marking the commencement of the appeal process. Furthermore, appellants are required to attach several documents electronically, including the order being appealed against, the notice of demand, proof of payment of the appeal fee, and any other supporting documentation.
In addition to submitting the appeal, the appellant must electronically send an index listing the documents submitted. Upon filing, the appeal will also be electronically transmitted to the respondent via the Iris web portal. If any contradictory facts are alleged, they must be supported by an affidavit, which must also be submitted electronically.
To ensure compliance, the FBR has introduced measures for defective appeals. If an appeal is not filed electronically as specified, an electronic notice will be issued within three days, instructing the appellant or their authorized representative to correct the filing within the time frame outlined in Section 127 of the Income Tax Ordinance, 2001. Failure to comply will lead to the Commissioner (Appeals) making a decision based on the available information.
The rules also emphasize the importance of electronically submitting powers of attorney for authorized representatives, along with the necessary documentation, which should be filed through the web portal. Stay applications will also be handled electronically, with hearings scheduled based on when the application is received. The Commissioner (Appeals) is required to dispose of stay applications electronically within seven working days.
The new regulations extend to all cases from the Tax Year 2014 onwards, and no cases will be accepted manually after January 1, 2021. For cases already filed manually before this date, the FBR has set a deadline of June 30, 2021, for their finalization. For cases pertaining to periods before the Tax Year 2014, the previous manual filing procedures will remain in effect until further notice.
With this move, the FBR aims to modernize and expedite the appeal process, promoting transparency and efficiency through electronic channels. The shift to digital filing is expected to ease the tax administration process for both taxpayers and tax authorities, fostering a more streamlined and accessible system for managing tax disputes.
