The Appellate Tribunal of Inland Revenue (ATIR) in Islamabad has ruled that commissioners are no longer eligible to file appeals under the amended Section 131 of the Income Tax Act, 2001. The court clarified that the term “commissioner” does not fall under the definition of “person”. “As defined in Article 2 (42), read with Article 80 of the Decree.
According to a news report, the ruling was in response to an appeal filed by the Appellate Department on May 17, 2024, challenging an order dated April 30, 2024, issued by the Commissioner of Inland Revenue (Appeals-I), Large Taxpayers Office (LTO), Islamabad, for the year Tax 2018.
The appeal centered around the amendments to the Tax Laws (Amendment) Act, 2024, which redefined Section 131 of the Income Tax Act. The amendment replaced the previous provision which allowed both the taxpayer and the Commissioner to bring appeals before the ATIR.
During the hearing, the Department Representative (DR) said that the appeal was filed before the amendments came into force and, therefore, should be subject to the previous ruling. The representative emphasized that under unamended Article 131, the Commissioners were expressly authorized to file appeals.
However, ATIR noted that the amended Article 131 restricts the right of appeal to “any person”, as defined in Article 2(42), which expressly does not include Commissioners. The Court noted that the deliberate exclusion of the word “Commissioner” from the amended wording indicates a legislative intent to restrict appellate rights.
The ATIR order also highlighted that the newly replaced section 133, which governs references to the High Court, still includes the term “Commissioner”. This distinction also indicates the deliberate removal of Commissioners’ rights of appeal under section 131.
The Court concluded that the administrative appeal was inadmissible under revised Article 131 and dismissed it accordingly. The ruling has significant implications for the commissioners’ power in tax-related disputes, narrowing the scope of who can go to the Court of Appeal under the amended law.
The decision stresses the need for clarity and precise interpretation of legislative amendments, especially in cases where basic procedural rights are affected.