Tax disputes to be resolved through mediation

Alternative dispute resolution panels to be headed by retired sessions judges

ISLAMABAD: The Federal Board of Revenue on Tuesday decided to grant the facility to resolve more than 31,000 tax cases at different legal forums through mediation committees.

For this purpose ADRC (Alternative dispute resolution committees) will be formed headed by retired session judges. The head of the committee will be paid Rs200,000 whereas the members will get Rs100,000 by the FBR through its budget. The petitioner and FBR will be bound to accept the decision of the mediatory committees.

However, those falling within the ambit of criminal proceedings and legal interpretation will not be handed over to these committees. The FBR has decided to make amendments to its income tax rule 2001 to provide this service to taxpayers through which rule 231 pertaining to the alternative dispute resolution will be amended for which the FBR has prepared the amendment rules draft and issued it to stakeholders for advice and recommendations.

According to the draft copy available with Express News the amended rules will be binding on all the cases that are to be resolved with meditation under the income tax ordinance 2001 section 134.

According to this section, those people will not be able to submit requests against people who are undergoing criminal proceedings. Documents relay that the concerned stakeholders will be able to submit objections within 7 days and after the specified time no objection or recommendation will be accepted. The amended rules will be enforced through a gazette notification.

The working of the alternative dispute resolution committees responsible for resolving the tax dispute cases is also being changed in the proposed rules and according to the new mechanism the head of such committee will be a retired district and session judge.

The committee members will be appointed through a consensus and nomination of the committee's third member will be made from the names included in the FBR's notified list.

FBR will notify about the formation of ADRC's three members and a retired district and session judge will be the head of this committee.



The documents further states that the ADRC will have the authority to conduct inquiry into the case and will be able to take expert opinion from the concerned experts and will be able to issue instructions to any officer of the inland revenue or anyone else to carry out an audit who will then give its recommendations to the committee to solve the issue and the decision of the majority of the committee will be considered the committee's decision.

The documents also state that the ADRC will have to resolve the case within 120 days of receiving the order from the FBR of taking back the appeal. The case will also have to be decided and sent back to the FBR. It will be binding on the concerned commissioner Inland Revenue and the petitioner to accept the committee's decision.
When a senior officer of the FBR was contacted in this regard, he informed that due to more than 1000 pending tax cases at various legal forums, tax worth more than Rs1276 billion remains un-recovered.
According to details given in the documents, it has been learnt that there are 1,674 cases in the SC with revenue worth Rs50.810 billion. Cases with revenue worth Rs359.287 billion  in the high courts.
Apart from this, 8011 cases are pending in commissioner appeals all over the country that amounts to a revue of Rs203.702 billion.

Now after the implementation of the following rules, these cases can finally be resolved and it is being expected that the FBR will avail heavy revenue