The Islamabad High Court (IHC) has suspended a single bench’s decision that had set aside the Federal Board of Revenue’s (FBR) authority to issue monitoring notices under Section 175C of the Income Tax Ordinance 2001.
A division bench comprising Justice Khadim Hussain Soomro and Justice Muhammad Asif issued the order while hearing an intra-court appeal filed by the FBR. Advocate Hafiz Ehsan Ahmed Khokhar represented the revenue body.
The single bench had earlier ruled that notices under Section 175C could only be issued by providing specific reasons. However, the FBR argued that such conditions were not part of the law. Counsel for the FBR clarified that notices under this section are issued solely for monitoring purposes and carry no penal effect.
During proceedings, the FBR’s lawyer pointed out that the poultry sector had been brought under the monitoring regime, where only 2.5% tax had been paid on sales worth Rs25 billion. He emphasised that if any adverse order were passed following monitoring, taxpayers would be given a full opportunity to defend themselves.
With the suspension of the earlier ruling, the FBR has regained its authority to issue notices under Section 175C for monitoring purposes.