Income Tax Ordinance, 2001 — Section 133: Reference to High Court

1[133. Reference to High Court. — (1) 2[ ] 3[Within sixty] days of the communication of the order of the Appellate Tribunal 4[ ], the aggrieved person or the Commissioner may file a reference, in the prescribed form along with a statement of the case, before the High Court, stating any question of law 5[ ] arising out of such order: Provided that the applicant shall also file complete record of the Appellate Tribunal 6[ ] 7[ ] within fifteen days of preferring an application under this section. 1 Section 133 substituted through The Tax Laws (Amendment) Act, 2024. The Substituted section read as follows: “133. Reference to High Court.— (1) Within ninety days of the communication of the order of the Appellate Tribunal under sub-section (7) of section 132, the aggrieved person or the Commissioner may prefer an application, in the prescribed form along with a statement of the case, to the High Court, stating any question of law arising out of such order.

(2)The statement to the High Court referred to in sub-section (1), shall set out the facts, the determination of the Appellate Tribunal and the question of law which arises out of its order.

(3)Where, on an application made under sub-section (1), the High Court is satisfied that a question of law arises out of the order referred to in sub-section (1), it may proceed to hear the case.

(4)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 (Act V of 1908), shall apply, so far as may be, notwithstanding anything contained in any other law for the time being in force.

(5)The High Court upon hearing a reference under this section shall decide the question of law raised by the reference and pass judgment thereon specifying the grounds on which such judgment is based and the Tribunal’s order shall stand modified accordingly. The Court shall send a copy of the judgment under the seal of the Court to the Appellate Tribunal.

(6)Notwithstanding that a reference has been made to the High Court, the tax shall be payable in accordance with the order of the Appellate Tribunal: Provided that, if the amount of tax is reduced as a result of the judgment in the reference by the High Court and the amount of tax found refundable, the High Court may, on application by the Commissioner within thirty days of the receipt of the judgment of the High Court that he wants to prefer petition for leave to appeal to the Supreme Court, make an order authorizing the Commissioner to postpone the refund until the disposal of the appeal by the Supreme Court.

(7)Where recovery of tax has been stayed by the High Court by an order, such order shall cease to have effect on the expiration of a period of six months following the day on which it was made unless the appeal is decided or such order is withdrawn by the High Court earlier.

(8)Section 5 of the Limitation Act, 1908 (IX of 1908), shall apply to an application made to the High Court under sub-section (1).

(9)An application under sub-section (1) by a person other than the Commissioner shall be accompanied by a fee of one hundred rupees.” 2 The word “Within” substituted by the Finance Act, 2024. 3 The expression “Subject to section 126A, within thirty” substituted by the Finance Act, 2025. 4 The expression “or, as the case may be, the Commissioner (Appeals)” omitted by the Finance Act, 2025. 5 The expression “or a mixed question of law and facts” omitted by the Finance Act, 2025. 6 Expression inserted by the Finance Act, 2024. 7 The expression “or, as the case may be, the Commissioner (Appeals)” omitted by the Finance Act, 2025. 272 Chapter X – Procedure 1[ ] 2[ ]

(2)The statement to the High Court referred to in sub-section (1), shall set out the facts, the determination of the Appellate Tribunal 3[ ] 4[ ] and the question of law 5[ ] which arises out of its order.

(3)Where, on an application made under sub-section (1), the High Court is satisfied that a question of law 6[ ] arises out of such order referred to in sub section (1), it may proceed to hear the case.

(4)A reference to the High Court under this section shall be heard by Special Bench or the Special Benches, as the case may be, to be constituted by the Chief Justice, as deemed necessary for hearing cases under this section, comprising 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 (Act V of 1908), shall apply, so far as may be, notwithstanding anything contained in any other law for the time being in force.

(5)The Special Bench shall decide a reference within six months from the date of its filing.

(6)The High Court shall establish a case management system to ensure that sufficient number of Special Benches are constituted, so as to ensure that a reference filed under this section is decided within the stipulated six months.

(7)The High Court upon hearing a reference under this section shall decide the question of law 7[ ] raised by the reference and pass judgment thereon specifying the grounds on which such judgment is based and the Appellate Tribunal's order 8[ ] 9[ ] shall stand modified accordingly. 1 Explanation added by the Finance Act, 2024. 2 Explanation omitted by the Finance Act, 2025. The omitted Explanation read as follows: “Explanation.– For the removal of doubt it is clarified that reference against order of the Commissioner (Appeals), communicated after the date of commencement of the Tax Laws (Amendment) Act, 2024 (V of 2024), shall lie before the High Court notwithstanding the proceedings pending prior to the date of commencement of the said Act.]” 3 Expression inserted by the Finance Act, 2024. 4 The expression “or, as the case may be, the Commissioner (Appeals)” omitted by the Finance Act, 2025. 5 The expression “or a mixed question of law and facts” omitted by the Finance Act, 2025. 6 The expression “or a mixed question of law and facts” omitted by the Finance Act, 2025. 7 The expression “or a mixed question of law and facts” omitted by the Finance Act, 2025. 8 Expression inserted by the Finance Act, 2024. 9 The expression “or, as the case may be, the Commissioner (Appeals)’s order” omitted by the Finance Act, 2025. 273 Chapter X – Procedure

(8)The High Court shall send a copy of the judgment under the seal of the High Court to the Appellate Tribunal 1[ ].

(9)Notwithstanding that a reference has been made to the High Court, the tax shall be payable in accordance with the order of the Appellate Tribunal 2[ ]: Provided that the tax recovery shall not be made by the Commissioner for thirty days from the date of communication of the order of the Appellate Tribunal 3[ ]: Provided further that, if the amount of tax is reduced as a result of the judgment in the reference by the High Court and some amount of tax is found to be refundable, the High Court may, on application by the Commissioner within thirty days of the receipt of the judgment of the High Court that he wants to prefer petition for leave to appeal to the Supreme Court, make an order authorizing the Commissioner to postpone the refund until the disposal of the appeal by the Supreme Court.

(10)On an application filed in a particular reference and after affording an opportunity of being heard to the Commissioner, the High Court may stay recovery of tax, subject to deposit with the assessing authority of not less than thirty percent of the tax determined by the Appellate Tribunal 4[ ] 5[ ]. Where recovery of tax has been stayed by the High Court by an order, such order shall cease to have effect on the expiration of a period of six months following the day on which it was made unless the reference is decided or such order is withdrawn by the High Court earlier.

(11)Section 5 of the Limitation Act, 1908 (IX of 1908), shall apply to an application made to the High Court under sub-section (1).

(12)An application under sub-section (1) 6[, by the aggrieved person other than the Commissioner,] shall be accompanied by a fee of fifty thousand rupees. 1 The expression “or, as the case may be, the Commissioner (Appeals)” omitted by the Finance Act, 2025. 2 The expression “or, as the case may be, the Commissioner (Appeals)” omitted by the Finance Act, 2025. 3 The expression “or, as the case may be, the Commissioner (Appeals)” omitted by the Finance Act, 2025. 4 Expression inserted by the Finance Act, 2024. 5 The expression “or, as the case may be, the Commissioner (Appeals)” omitted by the Finance Act, 2025. 6 Expression inserted by the Finance Act, 2024. 274 Chapter X – Procedure

(13)No application filed by the Commissioner under subsection (1) shall be entertained unless it is accompanied by a written authorization by the relevant Chief Commissioner.] 1[ ] 2[ ] 1 Section 134 omitted by the Finance Act, 2005. The omitted section 134 read as follows: “134. Appeal to Supreme Court.- (1) An appeal shall lie to the Supreme Court from any judgment of the High Court delivered on a reference made or question of law framed under section 133 in any case which the High Court certifies to be a fit one for appeal to the Supreme Court.

(2)The provisions of the Code of Civil Procedure, 1908 (V of 1908), relating to appeals to the Supreme Court shall apply, so far as may be, in the case of an appeal under this section in like manner as they apply in the case of an appeal from decrees of a High Court.

(3)Where the judgment of the High Court is varied or reversed in appeal under this section, effect shall be given to the order of the Supreme Court in the manner provided in sub-section (12) of section 133 in the case of a judgment of the High Court.

(4)The provisions of sub-sections (11), (12) and (13) of section 133 shall apply in the case of an appeal to the Supreme Court made under this section as they apply to an appeal to the High Court under section 133.” 2 The section 134A substituted by the Finance Act 2020 dated 30th June, 2020, the substituted section read as follows:134A. Alternative Dispute Resolution.— (1) Notwithstanding any other provision of this Ordinance, or the rules made thereunder, an aggrieved person in connection with any dispute pertaining to

(a)the liability of tax against the aggrieved person, or admissibility of refunds, as the case may be;

(b)the extent of waiver of default surcharge and penalty; or

(c)any other specific relief required to resolve the dispute, may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an Appellate Authority, except where criminal proceedings have been initiated or where interpretation of question of law is involved having effect on other cases.

(2)The Board may, after examination of the application of an aggrieved person, appoint a committee, within sixty days of receipt of such application in the Board, comprising,

(i)an officer of Inland Revenue not below the rank of a Commissioner;

(ii)person to be nominated by the taxpayer from a panel notified by the Board comprising, 2

(a)[ ] chartered accountants, 2[cost and management accountants] and 2[ ] advocates having 2[minimum ten years] experience in the field of taxation; and

(b)reputable businessmen as nominated by Chambers of Commerce and industry: Provided that the taxpayer shall not nominate a Chartered Accountant 2[or cost and management accountant] or an advocate if the said Chartered Accountant 2[or cost and management accountant] or the advocate is or has been an auditor or an authorized representative of the taxpayer; and

(iii)a retired Judge not below the rank of District and Sessions Judge, to be nominated through consensus by the members appointed under clauses (i) and (ii).

(3)The aggrieved person, or the Commissioner, or both, as the case may be, shall withdraw the appeal pending before any court of law or an Appellate Authority, after constitution of the committee by the Board under sub section (2).

(4)The committee shall not commence the proceedings under sub-section (5) unless the order of withdrawal by the court of law or the Appellate Authority is communicated to the Board: Provided that if the order of withdrawal is not communicated within seventy five days of the appointment of the committee, the said committee shall be dissolved and provisions of this section shall not apply.

(5)The Committee appointed under sub-section (2) shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within one hundred and twenty days of its appointment: Provided that in computing the aforesaid period of one hundred and twenty days, the period, if any, for communicating the order of withdrawal under sub-section (4) shall be excluded.

(6)The recovery of tax payable by a taxpayer in connection with any dispute for which a Committee has been appointed under sub- section (2) shall be deemed to have been stayed on withdrawal of appeal up to the date of decision by the Committee.

(7)The decision of the committee under sub-section (5) shall be binding on the Commissioner and the aggrieved person. 275 Chapter X – Procedure

(8)If the Committee fails to decide within the period of one hundred and twenty days under sub-section

(5), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the court of law or the Appellate Authority which issued the order of withdrawal under sub-section (4) and the appeal shall be treated to be pending before such court of law or the Appellate Authority as if the appeal had never been withdrawn.

(9)The Board shall communicate the order of dissolution to the court of law or the Appellate Authority and the Commissioner.

(10)The aggrieved person, on receipt of the order of dissolution, shall communicate it to the court of law or the Appellate Authority, which shall decide the appeal within six months of the communication of said order.

(11)The aggrieved person may make the payment of income tax and other taxes as decided by the committee under sub-section (5) and all decisions, orders and judgments made or passed shall stand modified to that extent.

(12)The Board may prescribe the amount to be paid as remuneration for the services of the members of the Committee, other than the member appointed under clause (i) of sub-section (2).

(13)The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section. 276 Chapter X – Procedure