Tax disputes: decision of majority of ADRCs members to be considered as final: FBR
The decision of majority members of the Alternative Dispute Resolution Committees (ADRCs) on tax disputes between the FBR and taxpayers would be considered as final decision of the committee, the Federal Board of Revenue (FBR) said.
According to the SRO 69(I)/2019 issued by the FBR here on Thursday, decision of its 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 Board, the Commissioner and the applicant.
In a major development to facilitate taxpayers, the decision of the committee shall be binding on the commissioner and the aggrieved person, the FBR added. The “dispute” between FBR and taxpayers means any grievance of the applicant pertaining to the liability of tax against the aggrieved person, or admissibility of refunds, as the case may be; the extent of waiver of default surcharge and penalty; or any other specific relief required to resolve the grievance.
Any person or class of persons interested for resolution of any dispute under section 134A shall submit a written application for alternative dispute resolution to the Board in the form as set out in Part I of the Schedule to this rule.
The Board, after examination of the contents 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 60 days from the receipt of application.
The members of the committee included an officer of Inland Revenue not below the rank of commissioner to be nominated by the Board; a person nominated by the applicant in the form mentioned in sub-rule (3) from a panel notified by the Board, comprising senior chartered accountants and senior advocates having experience in the field of taxation; reputable businessmen as nominated by chambers of commerce and industry and a retired judge not below the rank of district and sessions judge, to be nominated.
The members of the committee appointed shall decide through consensus the third member for nomination from a list notified by the Board, whereafter, the appointment of the three-member committee shall be notified by the Board.
The Board shall notify a panel of a retired judge not below the rank of district and sessions judge, senior chartered accountants, senior advocates and reputable businessmen in accordance with eligibility criteria specified in Part-II of the Schedule to this rule. The retired judge appointed under shall be the chairperson of the committee.
After notification of the committee, the applicant or the commissioner or both, as the case may be, shall withdraw any appeal relating to the dispute pending before any court of law or an appellate authority in the form as set out in Part-III of the Schedule to this rule.
The committee appointed and notified shall commence proceedings after receipt of order of withdrawal of appeal from the Board. The chairperson of the committee shall be responsible for deciding the procedure to be followed by the committee.
He would decide about the place of sitting of the committee, in consultation with the chief commissioner having jurisdiction over the applicant; specify date and time for conducting proceedings by the committee; supervise the proceedings of the committee; issue notices by courier or registered post or electronic mail to the applicant; requisition and produce relevant records or witnesses from the commissioner or other concerned quarters; ensure attendance of the applicant for hearing either in person or through an advocate, representative or a tax consultant; consolidate decision of the committee and communicate it to the Board, the commissioner and the applicant and for any other matter covered under these rules.
The committee may conduct inquiry, seek expert opinion, direct any officer of Inland Revenue or any other person to conduct an audit and make recommendations to the Committee in respect of dispute or hardship. The committee may determine the issue and may thereafter seek further information or data or expert opinion or make or cause to be made such inquiries or audit as it may deem fit, to decide the matter.
On receipt of the committee’s decision, the applicant shall make payment of income tax and other taxes as specified by the committee in its decision and the commissioner shall modify order as per decision of the committee. The chairman of the committee appointed 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 appointed 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 remuneration shall be paid by the Board from its budget allocation within fifteen days of the receipt of the order, the FBR added.