Income Tax Ordinance, 2001 — Section 129: Decision in appeal

129. Decision in appeal.— (1) In disposing of an appeal lodged under section 127, the Commissioner (Appeals) may – 3[(a) make an order to confirm, modify or annul the assessment order after examining such evidence as required by him respecting 1 Inserted by the Finance Act, 2012. 2 Inserted by the Finance Act, 2015 3 Clause (a) substituted by the Finance Act, 2005. The original clause (a) read as follows:

(a)in the case of an appeal against an assessment order –

(i)make an order to set aside the assessment order and direct the Commissioner to make a new assessment order in accordance with any directions or recommendations of the Commissioner (Appeals); or

(ii)make an order to confirm, modify or annul the assessment order; or 261 Chapter X – Procedure the matters arising in appeal or causing such further enquires to be made as he deems fit; or]

(b)in any other case, make such order as the Commissioner (Appeals) thinks fit.

(2)The Commissioner (Appeals) shall not increase the amount of any assessment order or decrease the amount of any refund unless the appellant has been given a reasonable opportunity of showing cause against such increase or decrease, as the case may be.

(3)Where, as the result of an appeal, any change is made in the assessment of an association of persons or a new assessment of an association of persons is ordered to be made, the Commissioner (Appeals) may authorise the Commissioner to amend accordingly any assessment order made on a member of the association and the time limit in sub-section (2) of section 122 shall not apply to the making such amended assessment.

(4)As soon as practicable after deciding an appeal, the Commissioner (Appeals) shall 1[specify in the order the amount of tax upheld and] serve 2[ ] his order on the appellant and the Commissioner 3[:] 4[Provided that such order shall be passed not later than one hundred and twenty days from the date of filing of appeal or within an extended period of sixty days, for reasons to be recorded in writing by the Commissioner (Appeals): Provided further that any period during which the hearing of an appeal is adjourned at the request of the appellant or is postponed due to any appeal or proceedings or stay order, remand or alternative dispute resolution proceedings or for any other reason, shall be excluded in the computation of the aforementioned periods.] 5[ ] 6[ ] 1 The words inserted through Finance Act, 2020 dated 30th June, 2020 2 The words “notice of” omitted by the Finance Act, 2002 3 Full stop substituted by the Finance Act, 2009. 4 Inserted by the Finance Act, 2009. 5 Sub-section (5) omitted by the Finance Act, 2012. The omitted sub-section (5) read as follows: “(5) Where the Commissioner (Appeals) has not made an order on an appeal before the expiration of 5[four] months from the end of the month in which the appeal was lodged, the relief sought by the appellant in the appeal shall be treated as having been given and all the provisions of this Ordinance shall have effect accordingly. 6 Sub-section (6) omitted by the Finance Act, 2012. The omitted sub-section (6) read as follows: “(6) For the purposes of sub-section (5), any period during which the hearing of an appeal is adjourned on the request of the appellant shall be excluded in the computation of the period of four months referred to in that sub-section.” 262 Chapter X – Procedure 1[ ] 2[ ] 1 Sub-section (7) omitted by the Finance Act, 2012. The omitted sub-section (7) read as follows: “(7) The provisions of sub-section (5) shall not apply unless a notice by the appellant stating that no order under sub-section (1) has been made is personally served by the appellant on the Commissioner (Appeals) not less than thirty days before the expiration of the period of four months.” 2 Section 130 substituted through Tax Laws (Second Amendment) Ordinance, 2019 dated 26 th December, 2019, the substituted section read as follows: “130. Appointment of the Appellate Tribunal.—2[(1) There shall be established an Appellate Tribunal to be called the Appellate Tribunal Inland Revenue to exercise the powers and perform the functions conferred on the Appellate Inland Revenue tribunal by this Ordinance,

(2)The Inland Revenue Appellate Tribunal shall consist of a chairman and such other judicial and accountant members as are appointed in such numbers and in the manner as the Prime Minister may prescribe by the rules.]

(3)A person may be appointed as a judicial member of the Appellate Tribunal if the person –

(a)has exercised the powers of a District Judge and is qualified to be a Judge of the High Court; 2[ 2[or] ]

(b)is or has been an advocate of a High Court and is qualified to be a Judge of the High Court 2[ 2[.] ] 2 2 [ [ ] ] 2 [(4) A person may be appointed as an accountant member of an appellate tribunal if,

(a)he is an officer of Inland Revenue 2[Service] equivalent to the rank of Regional Commissioner; 2[ ]

(b)a Commissioner Inland Revenue or Commissioner Inland Revenue (Appeals) having at least 2[three] years experience as Commissioner or Collector 2[; 2[ ] ] 2 [(c) a person who has, for a period of not less than ten years, practiced professionally as a chartered accountant within the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961)2[;or] 2 [(d) a person who has, for a period of not less than ten years, practiced professionally as a cost and management accountant within the meaning of Cost and Management Accountants Act,1966 (XIV of 1966).]

(5)The Federal Government shall appoint a member of the Appellate Tribunal as Chairperson of the Tribunal2[and, except in special circumstances, the person appointed should be a judicial member]2[ ].

(6)The powers and functions of the Appellate Tribunal shall be exercised and discharged by Benches constituted from members of the Tribunal by the Chairperson of the Tribunal.

(7)Subject to sub-section (8), a Bench shall consist of not less than two members of the Appellate Tribunal and shall be constituted so as to contain an equal number of judicial and accountant members, or so that the number of members of one class does not exceed the number of members of the other class by more than one.

(8)The Federal Government may direct that all or any of the powers of the Appellate Tribunal shall be exercised by

(a)any one member; or

(b)more members than one, jointly or severally. 2 [(8A) Notwithstanding anything contained in sub-sections (7) and (8), the 2[Chairperson] may constitute as many benches consisting of a single member as he may deem necessary to hear such cases or class of cases as the Federal Government may by order in writing, specify.] 2 [(8AA) The 2[Chairperson] or other member of the Appellate Tribunal authorized, in this behalf by the 2[Chairperson] may, sitting singly, dispose of any case where the amount of tax or penalty involved does not exceed 2[one] million rupees.] 263 Chapter X – Procedure