ATIR Islamabad urged to implement tribunal orders

ISLAMABAD: Appellate Tribunal Inland Revenue, Islamabad has issued an order to the Chairman Federal Board of Revenue (FBR) to issue instructions to field formations to implement tribunal orders as the same are binding upon the FBR unless expressly suspended by the High Court.

The case was pleaded by tax lawyer Waheed Shahzad Butt before the ATIR against Corporate / Large Taxpayer Offices Islamabad and first of its kind of a landmark order in the history of ATIR has been issued to implement its own order without seeking justice from High Court or Federal Tax Ombudsman (FTO).

According to an order of the ATIR Division Bench-I, although the tax Department has now produced the implementation order, such compliance appears to have been made belatedly and only as a consequence of the initiation of the present proceedings. This Tribunal deems it imperative to reiterate that once an order of this forum attains finality, it is binding upon the Department and must be implemented in its true letter and spirit, unless expressly suspended or set aside by a competent higher forum.

Any departure from or delay in implementation is legally impermissible and may render the concerned officials liable to appropriate proceedings under law, the order added.

The ATIR order further said that applicant–taxpayer has filed the instant miscellaneous application, seeking implementation of this Tribunal’s order dated October 4, 2021.

While adjudicating the main appeal of the applicant, this Tribunal, inter alia, held that both the order dated December 2, 2020, whereby the assessing officer had declared the return of income for Tax Year 2019 as invalid, and the order dated 25.02.2021 passed by the learned Commissioner Inland Revenue (Appeals), was illegal and without lawful authority. Consequently, both orders were annulled, and the concerned Commissioner Inland Revenue was directed to forthwith treat and mark the return of income filed by the applicant–taxpayer for Tax Year 2019 as a valid return.

It is an undisputed fact that the Tribunal’s order dated October 4, 2021 was never suspended or stayed by any superior judicial forum.

Consequently, the Department was under a statutory obligation to give effect to the said order in terms of section 124(4) of the Income Tax Ordinance, 2001, within the prescribed time frame. Any omission or delay in implementing a judicial pronouncement not only constitutes maladministration but also erodes the rule of law and undermines public trust in the tax administration.

In light of the foregoing, the present application is disposed of with specific directions:

(i) The Department shall ensure that orders of this Tribunal are implemented forthwith and without exception, unless stayed by a higher judicial forum.

(ii) Any deliberate or willful non-compliance in the future shall attract consequences in accordance with law, including possible referral to the Federal Tax Ombudsman under section 9(1) of the FTO Ordinance, 2000.

(iii) The learned Chairman, FBR, is advised to issue necessary instructions to all field formations to strictly observe the mandate of section 124(4) of the Ordinance in order to uphold institutional credibility and avoid needless litigation.

This order is intended to reinforce the foundational principle that judicial decisions must be respected and implemented expeditiously. Prompt compliance not only enhances the credibility of the Department but also reduces avoidable litigation and conserves valuable judicial time. With the foregoing observations, the miscellaneous application stands disposed of accordingly, ATIR order added.