PTA Wins Legal Battle Against FBR Over Rs. 1.37 Billion Advance Tax Payment

The Islamabad High Court (IHC) has ruled in favor of the Pakistan Telecommunication Authority (PTA) in its petition against the Federal Board of Revenue (FBR) over the deduction of Rs 1.37 billion advance tax without prior notice. Justice Babar Sattar has instructed FBR to decide on PTA’s request for a refund of the additional tax within two months. The dispute dates back to 2018 when the tax machinery deducted Rs. 1.37 billion from PTA’s bank account as advance tax without issuing prior notice. It is pertinent to mention here that prior notices on such a tax deduction are mandatory under the Income Tax Ordinance. The court noted that such actions were taken without following due process and violated the fundamental rights of the petitioner (PTA). PTA had contested the deduction and filed an application for the return of the excess amount, but the Commissioner Inland Revenue failed to act on the request within the legally stipulated timeframe. IHC not only ordered the Commissioner Inland Revenue to resolve the matter promptly but also imposed a fine of Rs. 100,000 on the official. The fine must be paid to PTA within one month, sources added. Justice Babar Sattar emphasized the mandatory requirement of issuing notices to taxpayers before such deductions. He ordered FBR to adhere to legal procedures and ensure the matter is resolved within the court-mandated timeline.