A taxpayer who misses a statutory deadline may lose the right of appeal, face recovery proceedings, pay default surcharge and suffer penalties. What happens when a tax tribunal misses the deadline fixed by law for deciding the taxpayer’s appeal? In Pakistan, usually nothing happens. The taxpayer continues to wait, the disputed demand remains alive, capital stays blocked and the institution responsible for deciding the controversy escapes without any effective consequence.

This glaring inequality between the State and the citizen has been exposed by a recent judgment of the Bombay High Court in Rajesh R. Hemrajani v Income Tax Appellate Tribunal and another. The facts are disturbing enough to shake confidence in any justice system.

The taxpayer’s appeal was fully argued and reserved for judgment on July 1, 2025. No judgment was delivered. After more than three months, the appeal was released on October 7, 2025. It was argued again before a differently constituted Bench and reserved on November 26, 2025. Once more, no judgment followed, and the matter was released on February 27, 2026. The appeal was heard for a third time and reserved on May 13, 2026. Fearing that it would again be released and require a fourth round of arguments, the taxpayer approached the High Court.

The Court recorded that its “judicial conscience is shocked”. It directed the Tribunal to pronounce judgment by August 13, 2026, and ordered circulation of its decision to all Benches of the Indian Income Tax Appellate Tribunal for strict compliance with Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963.

The importance of the judgment lies beyond the extraordinary hardship suffered by one taxpayer. It converts a procedural rule into an enforceable institutional obligation. A matter cannot be heard, reserved, forgotten, released and heard again as though the litigant’s time, money and endurance have no value.

Rule 34 requires the Tribunal’s order to be written, signed and dated. It may be pronounced immediately after hearing. Where that is not possible, the Bench must ordinarily give a date for pronouncement. If no date is given, every endeavour must be made to pronounce the order within 60 days. Only exceptional and extraordinary circumstances can justify a further period, which should not ordinarily exceed 30 days. The rule also provides for notice of the date, pronouncement in court and alternative arrangements where a member who heard the appeal is unavailable.

India and Pakistan inherited the same tribunal from British India. The tax legislation was comprehensively reorganised through the Indian Income-tax Act, 1922. Following recommendations for an appellate body independent of the tax administration, the Income Tax Appellate Tribunal was constituted on January 25, 1941, under section 5A of that Act. Both countries retained the institution after independence. Pakistan later renamed it the Appellate Tribunal Inland Revenue on October 28, 2009, but its essential character as the final fact-finding authority remained unchanged.

The taxpayer continues to wait, the disputed demand remains........

© The Friday Times