KARACHI: Federal Board of Revenue (FBR) has notified rules to implement Alternate Dispute Resolution (ADR) for reduce the number of tax cases and facilitate taxpayers through settlement without going any court of law.
The FBR issued SRO 69(I)/2019 and notified Rule 231C to Income Tax Rules, 2002, which will focus disputes under Section 134A of Income Tax Ordinance, 2001 namely:
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.
The FBR said that any person or class of persons interested for resolution of any dispute under section 134A can submit a written application for ADR to the FBR in the prescribed form.
The FBR, after examination of an application by a taxpayer and facts stated therein and on satisfaction that the application may be referred to a Committee for the resolution of the hardship or dispute, shall appoint and notify a Committee, within a period of sixty days from the receipt of application, consisting of the following members, namely:
(a) an officer of Inland Revenue not below the rank of Commissioner to be nominated by the Board;
(b) a person nominated by the applicant from a panel notified by the FBR, comprising—
(i) senior chartered accountants and senior advocates having experience in the field of taxation; and
(ii) reputable businessmen as nominated by Chambers of Commerce and Industry; and
(c) a retired judge not below the rank of District and Sessions Judge.
The chairperson of the committee shall be responsible for deciding the procedure to be followed by the Committee which may, inter-alia, include the following, namely:-
(a) to decide about the place of sitting of the Committee, in consultation with the Chief Commissioner having jurisdiction over the applicant;
(b) to specify date and time for conducting proceedings by the Committee;
(c) to supervise the proceedings of the Committee;
(d) to issue notices by courier or registered post or electronic mail to the applicant;
(e) to requisition and produce relevant records or witnesses from the Commissioner or other concerned quarters;
(f) to ensure attendance of the applicant for hearing either in person or through an advocate, representative or a tax consultant;
(g) to consolidate decision of the Committee and communicate it to the Board, the Commissioner and the applicant; and
(h) for any other matter covered under these rules.
The FBR said that decision of majority members shall be construed decision of the Committee and the Committee shall decide the dispute within 120 days from the date of receipt of order of withdrawal from the Board and communicate the same to the FBR, the Commissioner and the applicant.
The Rule also made it clear that the decision of the committee shall be binding on the Commissioner and the aggrieved person.
The FBR also prescribed payment structure for chairman and members of ADR committee.
It said that the Chairman of the Committee shall be paid a lump sum one-time remuneration of seventy five thousand rupees or four percent of the disputed tax demand, whichever is less.
The member of the Committee shall be paid a lump sum one-time remuneration of fifty thousand rupees or three percent of the disputed tax demand, whichever is less.
The FBR said that the remuneration shall be paid by the board from its budget allocation within fifteen days of the receipt of the order.