The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to ensure the timely disposal of a pending tax application under Section 221 of the Income Tax Ordinance, 2001.
The direction came while deciding a review petition concerning a Tax Year 2018 assessment. The FTO recommended that the concerned Commissioner Inland Revenue decide the pending application within 20 days of receiving the order.
What Was the Taxpayer’s Concern?
The case involved an application filed under Section 221, while other assessment-related matters concerning Tax Year 2018 had already been decided by the Appellate Tribunal Inland Revenue (ATIR), Lahore, on October 2, 2024.
The taxpayer maintained that the pending Section 221 application was a separate matter and still required a decision.
The tax department acknowledged receiving the application and stated that the competent authority would decide it according to law.
FTO Emphasises Timely Disposal
An important point in the FTO’s decision was that the existence of a statutory time period does not necessarily mean that a tax authority should wait until the final day to act.
The Ombudsman observed that an early decision can provide certainty to both parties and prevent unnecessary administrative delay.
The FTO therefore accepted the review petition only to the extent of the pending application and recommended that the relevant Commissioner dispose of it within 20 days.
Section 221 Application Was Not Decided on Merits
The FTO’s intervention was limited to the delay in disposing of the application.
Importantly, the Ombudsman did not determine whether the taxpayer’s Section 221 application should ultimately be accepted or rejected. The merits of the application remain for the competent tax authority to decide according to law.
Similarly, the assessment issues already decided by ATIR were not reopened through the FTO review.
Compliance Report Also Required
The concerned Commissioner has also been directed to submit a compliance report within the stipulated period.
This reinforces the importance of timely implementation of recommendations issued by the tax ombudsman in matters involving administrative delays.
What Does This Mean for Taxpayers?
The decision highlights the importance of having an effective mechanism for dealing with pending tax applications.
Taxpayers who have submitted statutory applications to FBR should:
- Keep proof of submission and relevant correspondence
- Track the status of pending applications
- Maintain complete supporting documentation
- Understand the applicable statutory time limits
- Follow up where an application remains unresolved
- Consider available grievance-redressal mechanisms where appropriate
A taxpayer’s right to seek a decision is separate from the question of whether that decision will ultimately be favourable.
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