Mohsin Siddiqui (Chief Reporter)
The Appellate Tribunal Inland Revenue (ATIR) in Islamabad has declared that the Tax Laws Amendment Act 2024 has retrospective effect. This decision means that any pending matters involving tax assessments or refunds exceeding the pecuniary limits set by the new law must be transferred to the appropriate ATIR(s) that hold jurisdiction under the updated legal framework. This ruling emerged from a case involving a trading company from Mandi Bahauddin contesting an order by the Commissioner Inland Revenue, Regional Tax Office (RTO), Sargodha.
The Appellate Tribunal Inland Revenue (Division Bench-I), Islamabad, clarified in its order that the amendment introduced by the Tax Laws Amendment Act 2024 establishes pecuniary jurisdiction for appellate authorities and is indeed retrospective. This means that any ongoing cases before the Commissioner (Appeals) with tax assessment or refund values surpassing the specified monetary limit must now be redirected to the ATIR, as mandated by the Income Tax Ordinance, the Sales Tax Act, 1990, and the FED Act, 2005.
A deeper analysis of the 2024 amendment reveals the legislature’s intention to streamline the appeal process from a dual forum to a single one, maintaining both the Commissioner Inland Revenue (Appeals) [CIR(A)] and the ATIR as appellate forums. Under the previous system, taxpayers could appeal to both the CIR(A) and the ATIR without monetary limitations. The new system, however, delineates that appeals involving assessed tax or refund values of Rs10 million or less will be handled by the CIR(A), while those exceeding Rs10 million will be directed to the ATIR.
The new appeal regime is set to take effect on May 3, 2024. To manage the transition smoothly, the legislature has designated June 16, 2024, as the date by which cases exceeding Rs10 million will be transferred to the ATIR, while those valued at or below Rs10 million will remain with the CIR(A). This transition period is necessary to ensure cases already in progress or nearing conclusion at the CIR(A) level during the interim period are handled appropriately.
It is important to note that during the transition period (May 3, 2024, to June 16, 2024), there is no prohibition on the CIR(A) deciding cases valued over Rs10 million. This clause ensures that taxpayers’ rights are preserved and that there is no disruption in the appeal process. The phrases “Subject to section 43A” and “Commissioner (Appeals)” in section 46 of the Sales Tax Act, 1990, reinforce this provision.
The Tax Laws Amendment Act 2024 has, for the first time, introduced a clear pecuniary jurisdiction for the CIR(A) and the ATIR, amending the previous ordinance which did not specify such limits. This change aims to enhance the efficiency and clarity of the appellate process within the tax law framework.
