Islamabad High Court (IHC) has ruled in favor of PTA in its petition against FBR over a Rs. 1.37 billion advance tax deduction made without prior notice. This dispute dates back to 2018 when the FBR deducted the amount from PTA’s bank account, violating the mandatory procedure outlined in the Income Tax Ordinance, which requires tax authorities to notify taxpayers before making such deductions.
Justice Babar Sattar, overseeing the case, noted that FBR’s actions were unlawful and infringed upon PTA’s rights as a taxpayer. The IHC ordered FBR to resolve PTA’s request for a refund of the excess tax within two months. The court also imposed a fine of Rs. 100,000 on the Commissioner Inland Revenue for failing to act on PTA’s refund request within the legally stipulated timeframe. The fine must be paid to PTA within one month.
The court’s decision emphasizes the importance of adhering to legal procedures and ensuring taxpayers are informed in advance about deductions. The ruling serves as a reminder of the need for transparency and accountability within Pakistan’s tax administration.
PTA’s victory in this case underscores the significance of protecting taxpayer rights and following due process. The FBR is now under pressure to comply with the court’s directive and resolve the issue within the prescribed time. This case sets a precedent for similar disputes and highlights the importance of ensuring fairness in the tax collection process.
