ISLAMABAD: In a significant ruling, the Appellate Tribunal Inland Revenue (ATIR) has reprimanded officials of the Federal Board of Revenue (FBR) for attempting to challenge the jurisdictional competence of the Commissioner (Appeals) in tax matters. The Tribunal’s decision highlights the importance of adhering to established procedures and respecting the jurisdictional framework outlined by the FBR.
The ATIR’s judgment comes after the FBR raised concerns about the jurisdiction of the Commissioner (Appeals) in a case related to the Special Zone, a move that the Tribunal found both paradoxical and without merit. The Tribunal noted that the allocation of cases to the Commissioner (Appeals) is governed by an automated process through the IRIS digital platform, which assigns cases based on the FBR’s own jurisdictional orders.
In the particular case at hand, the FBR had attempted to challenge the competence of the Commissioner (Appeals), who was acting in line with the FBR’s prescribed procedural framework. However, the Tribunal emphasized that the process of jurisdictional allocation is automatic and does not involve discretion from taxpayers or the Department. The IRIS system assigns cases to the relevant Commissioner (Appeals) based on the jurisdictional guidelines set by the FBR, making the Department’s challenge of the jurisdictional order paradoxical.
The case was strongly contested by tax lawyer Waheed Shahbaz Butt, who represented the taxpayer. Butt argued that the FBR’s stance was not only unfounded but also wasteful, leading to unnecessary litigation that costs taxpayers’ money. He further stressed that the FBR’s challenge was counterproductive and unjustified, given the clear rules in place regarding jurisdictional assignments.
The ATIR order clearly pointed out that the primary grievance from the FBR centered around the jurisdictional competence of the Commissioner (Appeals), specifically the decision to annul the order of the Deputy Commissioner of Inland Revenue (DCIR). At the start of the proceedings, the Tribunal inquired whether the FBR’s position had caused any prejudice to the Department. The Departmental Representative (DR) argued that the Commissioner (Appeals) lacked the jurisdiction to handle the appeal, citing a jurisdiction order issued in December 2020, which designated a specific Commissioner (Appeals) as the competent authority.
However, when asked about the mechanism behind the allocation of jurisdiction, the DR confirmed that the IRIS platform automatically assigns appeals to the appropriate Commissioner (Appeals) based on the jurisdictional orders provided by the FBR. Given that this process is automated and administered by the FBR itself, the Tribunal pointed out the absurdity of the Department questioning the jurisdiction exercised in accordance with its own procedural framework.
The Tribunal concluded that the FBR’s objection to the jurisdictional allocation lacked merit. “The jurisdictional objection raised by the Department is devoid of merit and unsustainable in law,” the ATIR ruling stated. The Tribunal’s decision serves as a clear reminder of the importance of respecting the jurisdictional framework established by the FBR and adhering to the rules set forth for tax matters.
This ruling is a landmark moment in the context of tax law in Pakistan, as it underscores the need for consistency in following procedural guidelines and discourages unnecessary litigation that wastes public resources. The ATIR’s strong stance serves as a warning to all involved parties to respect the established rules and avoid frivolous challenges that could hinder the efficient administration of tax law.