ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to ensure disposal of a pending tax application within 20 days, observing that a statutory time limit does not mean the tax authority must wait until the last day to decide a matter.
The direction was issued by Federal Tax Ombudsman M. Zafar ul Haq Hijazi while deciding a review petition filed by M/s Bankers Avenue Society Limited, Lahore. The matter related to an application filed by the company on February 17, 2026 under Section 221 of the Income Tax Ordinance, 2001.
The company had also raised concerns regarding its income tax assessment for Tax Year 2018. The assessment was made on June 24, 2024 under Section 122 of the Income Tax Ordinance. The company’s appeal against the assessment was dismissed by the Appellate Tribunal Inland Revenue, Lahore, on October 2, 2024.
Earlier, the FTO had dismissed the complaint on August 13, 2026 on the ground that the assessment-related issues had already been decided by the Appellate Tribunal and were, therefore, outside the scope of further examination.
The company later filed a review petition, contending that its Section 221 application was a separate matter and had not been decided by the Appellate Tribunal. The FBR department acknowledged that the application had been filed and informed the Ombudsman that the competent authority would decide it in accordance with law.
The review hearing was held on September 30, 2026 before the FTO office in Lahore. The department was represented by the Commissioner Inland Revenue of Zone V, Chief Tax Office Lahore, while the complainant’s representative did not appear despite being served notice. The matter was, therefore, decided on the basis of written arguments and documents available on record.
The Ombudsman noted that Section 221 provides a legal mechanism for rectifying mistakes that are apparent from the tax record. The order stated that the statutory period for the application filed on February 17, 2026 had not yet expired. However, the existence of such period did not require the authority to wait until its final day before taking up the application.
The FTO observed that the application had remained pending since February 17 and that the department had not pointed out any specific reason preventing its timely disposal. The order said an early decision would provide certainty to the parties and prevent unnecessary delay.
The FTO, therefore, accepted the review petition only to the extent of the pending Section 221 application. It directed the FBR to instruct the concerned Commissioner to dispose of the application within 20 days of receiving the order and in accordance with law. The Commissioner was also directed to report compliance within the stipulated period.
The Ombudsman clarified that the order did not determine whether the company’s Section 221 application was correct or liable to be accepted. The direction was limited to timely disposal of the pending application. The assessment issues already decided by the Appellate Tribunal were not reopened.
