Proceedings under tax ordinance to be treated as judicial

Proceedings under tax ordinance to be treated as judicial

Section 224 of Income Tax Ordinance, 2001 explicitly declares that any proceedings before the Commissioner, Commissioner (Appeals), or Appellate Tribunal are to be treated as judicial proceedings.

The Income Tax Ordinance, 2001, has recently been updated up to June 30, 2021, incorporating amendments introduced through the Finance Act, 2021. This move by the FBR brings clarity and legal weight to the tax-related processes carried out under the ordinance.

The text of Section 224 reads: “Proceedings under the Ordinance to be judicial proceedings. Any proceedings under this Ordinance before the Commissioner, Commissioner (Appeals), or Appellate Tribunal shall be treated as judicial proceedings within the meaning of sections 193 and 228 of the Pakistan Penal Code, 1860 (Act XLV of 1860), and for the purposes of section 196 of the Pakistan Penal Code, 1860 (Act XLV of 1860).”

This declaration implies that the proceedings conducted under the Income Tax Ordinance, 2001, will carry the same legal weight and significance as traditional judicial proceedings. The ordinance aligns these tax-related processes with the legal framework defined in sections 193, 228, and 196 of the Pakistan Penal Code, 1860.

The move is expected to enhance the credibility and transparency of tax-related matters, as they will now be conducted under the recognized umbrella of judicial proceedings. This alignment with established legal norms is likely to streamline the resolution of tax disputes and appeals, providing a more structured and fair approach.

The declaration has broader implications for both taxpayers and tax authorities. Taxpayers will now have the assurance that their cases will be treated with the due process and fairness associated with judicial proceedings. On the other hand, the FBR will benefit from a more robust legal framework to address tax-related issues, ensuring a more systematic and legally sound approach.

Moreover, the inclusion of tax proceedings under the purview of the Pakistan Penal Code, 1860, signifies the seriousness with which the FBR aims to address tax-related offenses. This step is likely to act as a deterrent against tax evasion and other malpractices, promoting a culture of compliance among taxpayers.

Industry experts have welcomed this move, emphasizing that it will contribute to a more efficient and accountable tax system. The alignment of tax proceedings with judicial standards is seen as a positive step toward building trust between taxpayers and the tax authorities.

The FBR’s declaration that proceedings under the Income Tax Ordinance, 2001, are to be treated as judicial proceedings represents a significant milestone in the evolution of Pakistan’s tax system. This measure is expected to enhance the fairness, transparency, and efficiency of tax-related processes, ultimately benefiting both taxpayers and the government.