Income Tax Ordinance, 2001 — Section 131: Appeal to the Appellate Tribunal

1[131. Appeal to the Appellate Tribunal. — 2[(1) Where the taxpayer, or the Commissioner objects to an order passed by the Commissioner (Appeals), the taxpayer or Commissioner may appeal to the Appellate Tribunal against such order within thirty days of the receipt of such order: Provided that the taxpayer may directly appeal against the order of the Officer Inland Revenue or the Commissioner as the case may be to the Appellate Tribunal by exercising the option as provided in sub-section (1) of section 127.]

(2)An appeal under sub-section (1) shall be

(a)in the prescribed form;

(b)verified in the prescribed manner; 1 Section 131 substituted through The Tax Laws (Amendment) Act, 2024. The Substituted section read as follows: “131. Appeal to the Appellate Tribunal.— (1) Where the 1[taxpayer] or Commissioner objects to an order passed by the Commissioner (Appeals), the 1[taxpayer] or Commissioner may appeal to the Appellate Tribunal against such order.

(2)An appeal under sub-section (1) shall be –

(a)in the prescribed form;

(b)verified in the prescribed manner;

(c)accompanied 1[, except in case of an appeal preferred by the Commissioner,] by the prescribed fee specified in sub-section (3); and 1 [(d) preferred to the Appellate Tribunal within sixty days of the date of service of order of the Commissioner (Appeals) on the taxpayer or the Commissioner, as the case may be.] 1 [(3) The prescribed fee shall be five thousand rupees in case of a company and two thousand rupees in case other than a company.]

(4)The Appellate Tribunal may, upon application in writing, admit an appeal after the expiration of the period specified in clause (d) of sub-section (2) if it is satisfied that the person appealing was prevented by sufficient cause from filing the appeal within that period. 1 [(5) Notwithstanding that an appeal has been filed under this section, tax shall, unless recovery thereof has been stayed by the Appellate Tribunal, be payable in accordance with the assessment made in the case: 1 [Provided that if on filing of application in a particular case, the Appellate Tribunal is of the opinion that the recovery of tax levied under this Ordinance and upheld by the Commissioner (Appeals), shall cause undue hardship to the taxpayer, the Tribunal, after affording opportunity of being heard to the Commissioner, may stay the recovery of such tax for a period not exceeding one hundred and eighty days in aggregate 1[:] 1 [Provided further that where recovery of tax has been stayed under this section, such stay order shall cease to have effect on expiration of the said period of one hundred and eighty days following the date on which the stay order was made and the Commissioner shall proceed to recover the said tax: ] Provided further that in computing the aforesaid period of one hundred and eighty days, the period, if any, for which the recovery of tax was stayed by a High Court, shall be excluded.]”. 2 Sub-section (1) substituted by the Finance Act, 2025. The substituted sub-section read as follows: “(1) Subject to section 126A, any person, other than an SOE, aggrieved by any order passed by an officer of Inland Revenue or Commissioner or Chief Commissioner or the Board 2[ ] under this Ordinance or the rules made thereunder may, within thirty days of the receipt of such order, prefer an appeal to the Appellate Tribunal or, as the case may be, a reference to the High Court: Provided that where sub-section (11) of section 134A apply, an SOE may prefer an appeal under this sub-section.” 267 Chapter X – Procedure

(c)accompanied, by the prescribed fee specified in sub-section (3); and

(d)preferred to the Appellate Tribunal within thirty days of the date of service of order on the taxpayer.

(3)The prescribed fee shall be twenty thousand rupees in case of a company and five thousand rupees in case other than a company.

(4)The Appellate Tribunal may, upon application in writing, admit an appeal after the expiration of the period specified in clause (d) of sub-section (2) if it is satisfied that the person preferring appeal was prevented by sufficient cause from filing the appeal within that period.

(5)Notwithstanding that an appeal has been filed under this section, tax shall, unless recovery thereof has been stayed by the Appellate Tribunal, be payable in accordance with the assessment made in the case: Provided that on filing of application in a particular case, the Appellate Tribunal may after affording an opportunity of being heard to the Commissioner having jurisdiction, for reasons to be recorded, stay the recovery of tax for ninety days: Provided further that the stay order shall cease to have effect, and the Commissioner shall be entitled to recover tax, if the taxpayer does not adhere to the hearing schedule for the appeal, as determined by the Appellate Tribunal in accordance with the rules made under sub-section (2) of section 130: Provided also that where an appeal is not decided within the statutory period by the Appellate Tribunal, the stay order under the second proviso shall not cease to have effect till finalization of the appeal by the Appellate Tribunal.] 1 [132. Decision of appeals by the Appellate Tribunal. — (1) The Appellate Tribunal shall decide the appeal within ninety days of its filing: 1 Section 132 substituted through The Tax Laws (Amendment) Act, 2024. The Substituted section read as follows: “132. Disposal of appeals by the Appellate Tribunal.— (1) The Appellate Tribunal may, before disposing of an appeal, call for such particulars as it may require in respect of the matters arising on the appeal or cause further enquiry to be made by the Commissioner. 1 [(2) The Appellate Tribunal shall afford an opportunity of being heard to the parties to the appeal and, in case of default by any of the party on the date of hearing, the Tribunal 1[ ] may proceed ex parte to decide the appeal on the basis of the available record.] 1 [(2A) The Appellate Tribunal shall decide the appeal within six months of its filing;]

(3)Where the appeal relates to an assessment order, the Appellate Tribunal may, 1[without prejudice to the powers specified in sub-section (2),] make an order to

(a)affirm, modify or annul the assessment order; or 1 [ ] 1 [(c) remand the case to the Commissioner or the Commissioner (Appeals) for making such enquiry or taking such action as the Tribunal may direct.] 268 Chapter X – Procedure Provided that appeals pending before the Appellate Tribunal on the date of commencement of the Tax Laws (Amendment) Act, 2024 (ACT NO. V of 2024), shall be decided within one hundred and eighty days: Provided further that where an appeal is not decided within the aforesaid period, the Appellate Tribunal shall seek condonation from the Minister of Law and Justice and such condonation shall not extend beyond ninety days.

(2)At the first hearing of appeal, the Appellate Tribunal shall

(a)bring to the notice of the taxpayer, the provisions relating to alternative dispute resolution under section 134A of this Ordinance; and

(b)if the taxpayer declines the option of alternative dispute resolution and wishes to continue with the appeal, fix date or dates for hearing and decision of the appeal in consultation with the taxpayer and Commissioner and in accordance with the rules.

(3)The Appellate Tribunal shall ensure strict adherence by the taxpayer and the Commissioner, to the hearing schedule as prescribed, and shall hear and decide the appeal on the date or dates fixed, and no adjournment shall be granted, except

(a)where there are compelling reasons for adjournment, to be recorded by the Appellate Tribunal; and

(b)on mandatory payment of such cost as the Appellate Tribunal may deem fit, which shall not be less than fifty thousand rupees.

(4)Where the appeal relates to an assessment order, the Appellate Tribunal may, without prejudice to the powers specified in sub-section (3), make an order to

(4)The Appellate Tribunal shall not increase the amount of any assessment 1[or penalty] or decrease the amount of any refund unless the taxpayer has been given a reasonable opportunity of showing cause against such increase or decrease, as the case may be.

(5)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 Appellate Tribunal 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 of such amended assessment.

(6)Where the appeal relates to a decision other than in respect of an assessment, the Appellate Tribunal may make an order to affirm, vary or annul the decision, and issue such consequential directions as the case may require. 1 [(7) The Appellate Tribunal shall communicate its order to the taxpayer and the Commissioner.] 1 [ ] 1 [ ]

(10)Save as provided in section 133, the decision of the Appellate Tribunal on an appeal shall be final.” 269 Chapter X – Procedure

(a)affirm, modify or annul the assessment order;

(b)remand the case to the Commissioner for making such enquiry or taking such action as the Tribunal may direct; or

(c)make such order as the Appellate Tribunal may deem fit.

(5)The Appellate Tribunal shall not increase the amount of any assessment or penalty or decrease the amount of any refund unless the taxpayer has been given a reasonable opportunity of showing cause against such increase or decrease, as the case may be.

(6)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 Appellate Tribunal may authorize 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 of such amended assessment.

(7)Where the appeal relates to a decision other than in respect of an assessment, the Appellate Tribunal may make an order to affirm, vary or annul the decision, and issue such consequential directions as the case may require.

(8)The Appellate Tribunal shall communicate its order to the taxpayer and the Commissioner.

(9)Save as provided in section 133, the decision of the Appellate Tribunal on an appeal shall be final.] 1[ ] 1 Section 133 substituted by the Finance Act, 2005. The original section 133 read as follows: 133. Reference to High Court.- (1) Where the Appellate Tribunal has made an order on an appeal under section132, the taxpayer or Commissioner may, by application in such form and accompanied by such documents as may be prescribed, require the Appellate Tribunal to refer any question of law arising out of such order to the High Court.

(2)An application under sub-section (1) shall be made within ninety days of the date on which the taxpayer or Commissioner, as the case may be, was served with the Appellate Tribunal’s order.

(3)Where, on an application under sub-section (1), the Appellate Tribunal is satisfied that a question of law arises out of its order, it shall, within ninety days of receipt of the application, draw up a statement of the case and refer it to the High Court.

(4)Where, on an application under sub-section (1), the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the taxpayer or the Commissioner, as the case may be, may apply to the High Court and the High Court may, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, frame a question of law for its consideration.

(5)An application under sub-section (4) shall be made within one-hundred and twenty days from the date on which the taxpayer or Commissioner, as the case may be, was served with order of the refusal.

(6)Sub-sections (10) through (14) shall apply to a question of law framed by the High Court in the same manner as they apply to a reference made under sub-section (1). 270 Chapter X – Procedure

(7)If, on an application under sub-section (1), the Appellate Tribunal rejects the application on the ground that it is time-barred, the taxpayer or Commissioner may apply to the High Court and, if the High Court is not satisfied with the correctness of the Appellate Tribunal’s decision, the Court may require the Appellate Tribunal to treat the application as made within the time allowed under sub-section (2).

(8)An application under sub-section (7) shall be made within ninety days from the date on which the taxpayer or Commissioner, as the case may be, was served with order of the rejection.

(9)If the High Court is not satisfied that the statement in a case referred under sub-section (3) is sufficient to enable it to determine the question raised thereby, the Court may refer the case back to the Appellate Tribunal to make such modification therein as the Court may direct.

(10)A reference to the High Court under this section shall be heard by a Bench of not less than two Judges of the High Court and, in respect of the reference, the provisions of section 98 of the Code of Civil Procedure, 1908 (V of 1908) shall apply, so far as may be, notwithstanding anything contained in any other law for the time being in force.

(11)The High Court upon hearing a reference under this section shall decide the questions of law raised by the reference and deliver judgment thereon containing the grounds on which such decision is founded.

(12)A copy of the judgment of the High Court shall be sent under the seal of the Court and the signature of the Registrar to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgment.

(13)The costs of a reference to the High Court under this section shall be at the discretion of the Court.

(14)Where a reference relates to an assessment, the tax due under the assessment shall be payable in accordance with the assessment, unless recovery of the tax has been stayed by the High Court.

(15)Section 5 of the Limitation Act, 1908 (IX of 1908) shall apply to an application under sub-section

(1).

(16)An application under sub-section (1) by a person other than the Commissioner shall be accompanied by a fee of one hundred rupees.” 271 Chapter X – Procedure