TAX APPEALS AND LITIGATION IN PAKISTAN

Tax Appeals are normally filed on the basis of differences between Taxpayer and Tax Departments which arise because of mismatch of Taxable Income and tax liability thereon as well as implication of default surcharge and penalties etc. Most cases are settled with Taxpayers at Deputy/Assistant Commissioner Inland Revenue/ Commissioner level for the purpose of saving time and problems which a Taxpayer have to face during the compliance stage.

There are some cases under which disagreements arises on the basis of facts and figures along with legal implications between Tax Department and Taxpayer. For the purpose to resolve this dispute between the Taxpayer and Tax Department, Income Tax ordinance, 2001 provide legal procedure which give right of appeal before the commissioner (Appeal), if not satisfied then a right of appeal is granted before Appellate tribunal and Higher Courts of Pakistan.

Circumstances under which appeals are filed in Pakistan

Appeals can arise in most of the connections with:

• Tax Appeal arises on the basis of best judgment assessment (ex-parte assessment) which is passed by DCIR/Commissioner on the basis of available information and material facts available with department.
• If changes are made to Taxpayer Self-assessment or a further changes made to an already changed assessment under which commissioner considers that this change will invalid and harmful for the Tax Department..
• An alteration made to the taxpayer’s self-assessment and further alteration made to an already altered assessment, where commissioner is satisfied after scrutinise all facts and figures and audited documents that income chargeable to tax is wrongly assessed or head of income is classified wrongly to decrease the tax liability.




In case if Appellant disagree with the decision of commissioner (Appeals) or assessed that amended assessment by the Commissioner (Appeals) is wrong, then Appellant used its right to take this matter to the next appellate forum as further Appeal before Appellate Tribunal. Appellate Tribunal is last and final facts finding authority which comes under the Ministry of law which means income tax proceeding cannot proceed further under Appellate Tribunal.

Further this case is been forwarded to High Court on the basis of law points and after that forwarded to Supreme Court of Pakistan if justified. We at Tax Care provide assistance in drafting appeal and submissions, appearance before commissioner, Appellate Tribunal, High Court and Supreme Court.