ISLAMABAD (January 27 2004): For the convenience of general public, the Central Board of Revenue (CBR) has issued a brochure explaining procedure of filing income tax appeals under Income Tax Ordinance 2001.
The brochure explains the procedure for making an appeal before the Commissioner (Appeals) and Income Tax Appellate Tribunal.
Sources said here on Monday that the 'compendium' would act as guideline for those who do not have the know-how in dealing with tax affairs. However, it does not cover the procedure for making an appeal under sales tax, central excise duty or customs laws.
There may be disagreement over facts, figures or interpretation of law between the taxpayer and the tax collectors (income tax department). To resolve such disagreements law lays down the procedure, giving taxpayer the right of appeal.
Regarding persons who are eligible to file appeal, the brochure clarifies that the person to whom the assessment, amended assessment or other order is addressed has the right of appeal.
In case of an “association of persons” or a “company” any partner or member of the association or the principal officer of the company has the right of appeal.
Explaining the prerequisites for making an appeal, the CBR has said that an appeal before the Commissioner (Appeals) against an assessment or amended assessment is neither entertained nor maintainable unless tax due along with the return of income, on the basis of income declared, has been paid; and tax equal to the lower of the following, against the tax assessed, is paid before lodging the appeal: 15 percent of the amount of tax payable (tax due on income assessed minus tax due on the income declared).
On the issue of ground of appeal, CBR has clarified that it must state the items of disagreements in the assessment, amended assessment or the order along with the reasons for disagreement or why the appellant believes that the assessment, amended assessment or the order is wrong, otherwise.
The grounds of appeal should be written in Urdu or English; precise and serially numbered; stated separately and distinctly for each point of disagreement or issue intended to be raised in appeal; and concise and without any argument, details or narrative.
The payment of prescribed fee for filing an appeal before the Commissioner (Appeals) is mandatory. An appeal without payment of the prescribed appeal fee is neither entertained nor maintainable.
Regarding time limit of filing of appeal, the CBR has said that the appeal before the Commissioner (Appeals) should be lodged within thirty (30) days from the date of receipt of an assessment, an amended assessment, penalty or any other order. After that the assessment, amended assessment, penalty or any other order is normally final and cannot be changed.
The CBR has advised the taxpayers to always inscribe the date of receipt and the signatures and name of the recipient on the acknowledgement given in token of receiving any communication, notice, assessment, amended assessment, penalty or any other order from the income tax department as well as on your (tax-payer's) copy of such documents. It is very important as most of the time limitations like the period of thirty (30) days for filing an appeal commence from that date.
The following documents are required to be submitted along with two copies of the memorandum and grounds of appeal: Evidence of payment of appeal fee (in original); evidence of payment of certain percentage of tax assessed (where the appeal is against an assessment or an amended assessment), notice of demand in original (where the appeal is against an assessment, an amended assessment or a penalty order) and copy of assessment, amended assessment, penalty or any other order appealed against.
Moreover, the concerned Taxation Officer/Commissioner is to be informed in advance that an appeal is being lodged before the Commissioner (Appeals) by forwarding a copy of the memorandum and grounds of appeal. The copy of memorandum and grounds of appeal to the Taxation Officer/Commissioner should be forwarded by registered post acknowledgement due, courier service or delivered by hand.
The CBR has said that the Commissioner (Appeals) is empowered to condone the delay in filing of appeal in exceptional cases after being satisfied that there was sufficient cause (good reasons) which prevented the appellant from lodging the appeal within the time limit of thirty (30) days.
In such a situation the appellant should submit an application for condonation of delay in lodging the appeal to the Commissioner (Appeals) along with the appeal and requesting to entertain the appeal after the expiry of period of limitation of thirty (30) days.
The application for condonation of delay, explaining the cause of each day of delay, should be supported with an affidavit (a statement on oath), from the appellant.
It explains that the appellant can withdraw the appeal with the permission of the Commissioner (Appeals) or the Income Tax Appellate Tribunal, as the case may be, by making a request in writing.
The brochure also explains how the appeal should be settled and procedure of filing of appeal to the Income Tax Appellate Tribunal. The steps in the whole process have been explained in simple language for better understanding by the taxpayers.
The CBR has also laid down the correct way of filling the “Form of Appeal to the Commissioner (Appeals)” and grounds of appeal.