Appeal to Commissioner Inland Revenue (Pakistan)

An Appeal to Commissioner Inland Revenue in Pakistan sets out the complainant's allegations and the relief sought from the authority or forum it is addressed to.

The Income Tax Ordinance 2001 — the primary federal statute governing income tax in Pakistan, administered by the FBR under the Federal Board of Revenue Act 2007 — establishes the income tax appeal mechanism in Sections 127 to 133. Section 127 of the Income Tax Ordinance 2001 grants any person aggrieved by an order of the Commissioner Inland Revenue (under original jurisdiction) or an Additional Commissioner, a Deputy Commissioner, or an Assistant Commissioner the right to appeal to the Commissioner Inland Revenue (Appeals) within thirty days of the date of service of the impugned order. Common orders against which Section 127 appeals are filed include: best judgment assessments under Section 121 (where the taxpayer failed to file returns); amended assessments under Section 122 (where the Commissioner amended the taxpayer's self-assessment on the basis of definite information); penalty orders under Section 182 (for failure to furnish return, furnishing incorrect return, or failure to produce accounts); and withholding tax default orders against employers under Sections 149 and 161.

For sales tax appeals, Section 45B of the Sales Tax Act 1990 provides the right to appeal to the Commissioner Inland Revenue (Appeals) against orders of the Sales Tax Officer — including orders creating sales tax liability, imposing penalties under Section 33 of the Sales Tax Act 1990, or rejecting input tax credit claims. For Federal Excise Duty matters, Section 34 of the Federal Excise Act 2005 provides the parallel appeal right. The Commissioner Inland Revenue (Appeals) has power to confirm, modify, annul, or set aside the impugned order, and to remand the case to the original officer for fresh decision with specific directions.

The FBR, established under the Federal Board of Revenue Act 2007 as the apex federal tax authority, administers the Large Taxpayer Offices (LTOs) in Karachi, Lahore, and Islamabad for large corporate taxpayers, the Medium Taxpayer Offices (MTOs) for medium-sized taxpayers, and the Regional Tax Offices (RTOs) across Pakistan for small and medium taxpayers. The Commissioner Inland Revenue (Appeals) is assigned to each LTO, MTO, and RTO, and taxpayers must file their appeal with the Commissioner (Appeals) having jurisdiction over the territory where the original order was made.

The Appellate Tribunal Inland Revenue (ATIR) — established under Section 130 of the Income Tax Ordinance 2001 — is the second appellate forum, comprising judicial and accountant members appointed by the federal government. Orders of the Commissioner (Appeals) may be challenged before the ATIR within sixty days under Section 131. The High Court (third forum) and the Supreme Court of Pakistan (final forum) hear tax references and petitions on questions of law — not facts — from ATIR orders under Sections 133 and 134A of the Income Tax Ordinance 2001.

An Appeal to Commissioner Inland Revenue Pakistan is required whenever a taxpayer receives a tax order from an Inland Revenue Officer that the taxpayer believes is factually incorrect, legally flawed, or procedurally defective — and the taxpayer wishes to formally challenge that order through the statutory appeal mechanism.

An appeal to Commissioner IR is needed when an individual taxpayer or company receives a best judgment assessment under Section 121 of the Income Tax Ordinance 2001 — where the Commissioner has estimated taxable income and raised a tax demand based on estimates rather than actual accounts, often because the taxpayer failed to file a return or produce records. Such assessments frequently overstate taxable income and must be challenged before the Commissioner (Appeals) with supporting documentation within thirty days.

An appeal is required when the Commissioner Inland Revenue issues an amended assessment under Section 122(5A) of the Income Tax Ordinance 2001 — commonly called an 'audit assessment' — following an income tax audit selecting the taxpayer under Section 214C (random selection through the IRIS system) or Section 177 (specific selection). Audit assessments frequently disallow claimed expenses, add unexplained income, or reject accounting methods — all of which are grounds for appeal to the Commissioner (Appeals).

An Appeal to Commissioner IR is needed when a penalty order is issued under Section 182 of the Income Tax Ordinance 2001 — for example, for late filing of the income tax return (penalty of 0.1% of tax payable per day of default), furnishing an incorrect return, or failure to comply with a notice under Section 176 requiring production of information or accounts. Penalty orders must be challenged within thirty days of service.

An appeal is required when an employer receives a withholding agent default order under Section 161 of the Income Tax Ordinance 2001 — asserting that the employer failed to deduct income tax from salary payments to employees under Section 149, from contractual payments under Section 153, or from dividend payments under Section 150 — and seeks to contest the default finding or the quantum of deemed tax liability attributed to the employer.

An Appeal to Commissioner Inland Revenue is needed when a sales tax registered person receives an order under Section 11 of the Sales Tax Act 1990 creating additional sales tax liability — for example, by rejecting input tax credit claims on the ground that the suppliers are not on the Active Taxpayers List (ATL) maintained by FBR, or by treating zero-rated supplies as standard-rated — and the registered person disputes the factual or legal basis of the order.

An Appeal to Commissioner Inland Revenue Pakistan filed under Section 127 of the Income Tax Ordinance 2001 or Section 45B of the Sales Tax Act 1990 must contain the following essential elements to be admissible and effective.

Appellant Identification: Full legal name of the appellant (individual, AOP, or company), National Tax Number (NTN) assigned by FBR through IRIS (Income Tax Return Information System), Computerised National Identity Card (CNIC) number for individual taxpayers, Sales Tax Registration Number (STRN) for sales tax matters, mailing address, and contact details for correspondence with the Commissioner (Appeals) office.

Impugned Order Details: Date of the order being appealed, order number, name and designation of the Inland Revenue Officer who made the order (Commissioner, Additional Commissioner, Deputy Commissioner, or Assistant Commissioner), tax year or tax period to which the order relates, and the amount of additional tax demand, penalty, or other adverse action contained in the order. For income tax appeals, the tax year is stated as the assessment year — for example, Tax Year 2024 (income from 1 July 2023 to 30 June 2024).

Grounds of Appeal: Clear, numbered statements of each legal and factual ground on which the appellant challenges the impugned order. Common grounds include: the assessment was made without affording the taxpayer a reasonable opportunity of being heard, violating Section 122(9) of the Income Tax Ordinance 2001 and the principles of natural justice; the addition of income was based on surmise and conjecture without definite information as required by Section 122(5A); claimed expenses were disallowed without legal basis — they are deductible under Section 20 (income from business) or Section 23 (depreciation) of the Income Tax Ordinance 2001; the penalty was disproportionate or imposed without establishing the requisite mens rea; or the sales tax input tax credit rejection was contrary to Section 8 of the Sales Tax Act 1990 because the purchases were genuine and supported by valid tax invoices.

Statement of Facts: A chronological narrative of the relevant facts — the taxpayer's business activity, the return filing history, the audit proceedings, the notices received and responses given, and the circumstances leading to the impugned order — providing the Commissioner (Appeals) with the factual context required to assess the grounds of appeal.

Pre-Deposit Compliance: Confirmation that the appellant has deposited the admitted tax (the undisputed portion of the tax liability) as required by Section 127(4) of the Income Tax Ordinance 2001 — the Commissioner (Appeals) may not entertain an appeal unless the appellant has paid the amount of tax that is not in dispute. Proof of payment of the admitted tax (bank challan or FBR IRIS payment receipt) must be attached.

Relief Claimed: Specific statement of the relief sought from the Commissioner (Appeals) — for example, annulment of the impugned order, deletion of specific additions or disallowances, reduction of penalty to nil or a lesser amount, or remand to the original officer with direction to allow the input tax credit. The relief claimed must correspond to the grounds raised.

List of Annexures: Itemised list of all documents attached — copy of the impugned order, copy of the original return filed, tax payment challans, correspondence with FBR during audit, financial statements, invoices, bank statements, or any other evidence supporting the grounds of appeal.

Forms-legal.com provides this Appeal to Commissioner Inland Revenue (Pakistan) template as a practical guide for taxpayers and their tax consultants. Tax appeal proceedings involve complex legal issues under the Income Tax Ordinance 2001, the Sales Tax Act 1990, and FBR's administrative guidelines — taxpayers are strongly advised to engage a tax advisor enrolled with the Income Tax Bar Association or a chartered accountant registered with ICAP for representation before the Commissioner (Appeals).