Law: Income Tax Ordinance, 2001

Section: 122(1), 128(1A)

Law: Constitution of Pakistan 1973

Section: 199

Tag Line During pendency of appeal and stay application under Income Tax Ordinance, recovery of disputed tax liability can be restrained to prevent coercive measures.  Summary The petitioner challenged a tax assessment order and filed an appeal along with a stay application before the Commissioner Inland Revenue (Appeals). Although interim stay was granted for 30 days, the application for extension of stay remained pending. The petitioner approached the High Court fearing coercive recovery proceedings. The Court held that, in line with settled law, no coercive measures should be taken during pendency of appeal/stay application, and directed the tax authorities to refrain from recovery until the appeal and stay application are decided. The petition was disposed of accordingly. ORDER; Through the instant writ petition, the petitioner, Shehbaz Saleem Khan, seeks issuance of a writ restraining respondent No.1 (Assistant / Deputy Commissioner Inland Revenue) from recovering the disputed tax liability on the basis of impugned Assessment Order dated 20.10.2020 and demand notice dated 19.02.2021, until the decision on the petitioner’s appeal, which is pending adjudication before respondent No.2 (Commissioner Inland Revenue (Appeals-II)). The record shows that vide Assessment Order dated 20.10.2020, a demand for an amount of Rs.3,102,822/- was raised against the petitioner by respondent No.1 in terms of Section 122(1) of the Income Tax Ordinance, 2001 (“the 2001 Ordinance”) pertaining to the Tax Period 01.07.2014 to 30.06.2015. The petitioner challenged the said order dated 20.10.2020 in an appeal before respondent No.2 on 19.11.2020. Along with the said appeal, the petitioner also filed an application for grant of stay. Respondent No.2, vide its order dated 03.03.2021, granted stay under Section 128(1A) of the 2001 Ordinance for a period of 30 days. On 09.04.2021, the petitioner filed an application for extension in grant of stay before respondent No.2. The appeal along with the application for extension in stay is still pending adjudication before the said respondent. Learned…