ISLAMABAD, June 5: The government is likely to fix time limit of six months for disposal of cases at the first appellate stage from the next financial year.

Official sources told Dawn on Wednesday that for timely disposal of appeals the government is also considering a proposal to fix 12 months for the second appeal.

According to the proposals sent to the Central Board of Revenue for consideration, it was recommended that the appellate order presently holding the field should be accepted and implemented notwithstanding the filing of further appeals by either party.

It was observed that currently the taxpayers or the department, in order to approach the High Court, have to undergone an additional stage of litigation by filing a reference to the Income Tax Appellate Tribunal (ITAT).

A time gape arose between the original order of the ITAT and the decision by the High Court. A stage has come that two or three years could be involved in the reference process.

To overcome this, it was proposed that this reference procedure was about 50 years old and was prone to delay.

It should thus be in the fitness of things that a provision be introduced, allowing direct filing of appeal to the High Court rather than filing reference to the ITAT.

It was recommended that notice of hearing should be invariably issued by the appellate authority within 30 days of filing of appeal.

It was proposed that the power of first appellate authority to set aside the cases and the concept of setting aside the assessment should be done away with. It may be replaced by a “remand” by commissioner (Appeals), advising the assessing officer to re-examine the matter wherever on the given lines and report back to the appellate authority for appropriate decision.

It was noticed that section 66 of the Income Tax Ordinance 1979, did not provide a time frame for issuing appeal effect orders where direct relief has been granted by the CIT (Appeal) or the Income Tax Appellate Tribunal.

For completing the set aside assessments, the time frame was one year from the end of the current financial year in which such order was received.

The DCIT might delay the assessment if he filed an appeal against the orders of the CIT (appeals) or ITAT where relief was granted and might delay speedy disposal of set aside cases where refunds were likely to be generated out of such orders.

To mitigate the problems of taxpayers, it was proposed that a period of two months, from receipt of appellate order, might be prescribed for issuing appeals effect orders where direct relief was involved.

The frame for passing revised orders on set aside cases, including partially set aside, might be restricted to six months from the date of service of order of CIT (Appeals)/ITAT.

It was also recommended that if payment was lodged the taxpayers’s appeal was successful, interest should be paid to the taxpayer in relation to the period from the date of lodgement of taxes until the day of refund. The rate of interest should be modestly in excess of the market rate.

As regards limitation a deeming provision might be added, which would impose a condition upon the taxpayer that he would have to intimate in writing, the concerned commissioner having jurisdiction over the case, 30 days prior to the date of limitation. On the day immediately next following the period of 30 days, the case will stand barred limitation, it was recommended.