Rebuilding tax justice—III When judgment itself ...

Summary

• Section 132 of the Income Tax Ordinance, 2001, substituted through the Tax Laws (Amendment) Act, 2024, commands that the Appellate Tribunal Inland Revenue (ATIR) shall decide an appeal within ninety days of filing.
• It directed delivery of judgment within the prescribed period and ordered all Indian Income Tax Appellate Tribunal benches to follow Rule 34: ordinarily sixty days after hearing, with an exceptional outer limit of ninety days.5 The important point is not that Bombay High Court and Supreme Court of India (by upholding the High Court’s order) has solved tribunal delay.
• The Bombay High Court directed all Income Tax Appellate Tribunal benches to follow Rule 34 and ordinarily pronounce judgment within sixty days, extendable for exceptional reasons up to ninety days.

AI Generated Summary

Part I of this series asked whether Pakistan should finally replace its fragmented tax appellate system with a National Tax Court. Part II asked the prior constitutional question: who controls the tax judge? The third question arises after the hearing has ended. How long should a citizen wait for judgment, and what happens when the institution that enforces statutory deadlines against taxpayers does not obey deadlines imposed upon itself?¹

This asymmetry goes to the heart of tax justice. A taxpayer who misses limitation may lose the right of appeal. A delayed payment attracts default surcharge. Failure to comply with a hearing schedule can expose a party to costs or recovery. When a tax appeal is heard and judgment does not follow, however, the economic dispute remains suspended: recovery risk survives, refunds may remain blocked, accounts stay uncertain and working capital can remain immobilised.

Parliament has attempted to impose discipline. Section 132 of the Income Tax Ordinance, 2001, substituted through the Tax Laws (Amendment) Act, 2024, commands that the Appellate Tribunal Inland Revenue (ATIR) shall decide an appeal within ninety days of filing. Appeals pending when the amendment commenced were given 180 days. If the period is exceeded, the Tribunal must seek condonation from the Minister for Law and Justice, and the extension cannot go beyond another ninety days.²

The same provision requires hearing and decision dates to be fixed in consultation with the parties. Adjournment is permitted only for compelling reasons recorded in writing and on payment of costs of not less than Rs. 50,000. The legislative message is unmistakable: tax litigation is not supposed to drift.

The subordinate rules tell a less satisfactory story. Rule 21(4) of the Appellate Tribunal Inland Revenue (Functions) Rules, 2023 provides that orders by a Bench “may” be passed within three months from conclusion of hearing; if that period is exceeded, the reasons are merely to be communicated to the Chairperson.³

The contradiction should be removed. The parent law says “shall decide”; the rule says an order “may” be passed. The statute counts from filing; the rule starts another clock after hearing. Most importantly, an internal explanation to the Chairperson supplies no remedy to the litigant whose matter has already been argued.

A subordinate rule cannot dilute the statute. Rule 21(4) should be amended. Once hearing concludes, judgment should ordinarily be pronounced within sixty days and, for exceptional reasons recorded before expiry of that period, no later than ninety days. The date of pronouncement should be announced when arguments close or notified immediately thereafter.

The problem is not peculiar to Pakistan. A recent Bombay High Court case shows what delay can do even inside a mature specialised tribunal. In Rajesh R. Hemrajani v Income Tax Appellate Tribunal, the taxpayer’s appeal was heard and reserved on July 1, 2025, but no judgment came. It was released, heard again before a different Bench on November 26, 2025, again left undecided, and released for a second time. A third hearing took place on May 13, 2026.⁴

Faced with the prospect of arguing the same appeal for a fourth time, the taxpayer approached the High Court. The Court recorded that its “judicial conscience is shocked”. It directed delivery of judgment within the prescribed period and ordered all Indian Income Tax Appellate Tribunal benches to follow Rule 34: ordinarily sixty days after hearing, with an exceptional outer limit of ninety days.⁵