ALTERNATIVE DISPUTE RESOLUTION
This mechanism of amending the grievances of taxpayers has been introduced by Finance Act, 2004. It is parallel to conventional appellate system as elaborated above.
The main features of this system are as follows:
Application of the Aggrieved Party
1. A person who has filed an appeal and the appeal is pending before an Appellate Authority is eligible to take advantage of Alternative Dispute Resolution System. Such an aggrieved party may apply to the Federal Board of Revenue for the appointment of a committee for the resolution of any hardship or dispute. The applicant will mention the details of the problem to be redressed. However, such an application cannot be entertained if prosecution proceedings have been initiated or where interpretation of question of law having effect on identical other cases is involved.
2. Composition of the Forum
The Board may upon examination of the application within 60 days of its receipt constitute a committee on a case to case basis for resolution of any hardship or dispute enumerated in the application. The committee shall comprise an officer of Inland Revenue and one or two persons out of a panel of Chartered Accountants or Cost Accountants, Advocates, Income Tax Practitioners or reputable taxpayers.
3. Mode of Proceedings and Disposal
The committee shall undertake an examination of the issue and may make pertinent enquiry, obtain expert opinion or get an audit conducted. Based on these findings the Committee will give its recommendations to the Board. The recommendations should be made within ninety days of its constitution in respect of resolution of the dispute. Otherwise the Board shall dissolve the Committee and constitute a new Committee which shall decide the matter within a further period of ninety days. In case of its failure also the -matter shall be taken up by the appropriate forum for decision.
In case the Committee gives its recommendations within the prescribed time the Board shall pass such orders on the recommendations of the Committee as may be appropriate within forty five days of the receipt of recommendations.
4. Power Exercised by Chairman.
The Chairman, Federal Board of Revenue, may also on the application of an aggrieved person pass the orders himself. In such case he will bypass the Committee. The Chairman if satisfied that there is an error in order or decision, may pass such orders and the justification for the same should be recorded in writing.
5. Effect of Orders of the Board
The orders passed by the Board in the light of recommendation of Committee shall be submitted before the authority, tribunal or the court where the appeal was pending. The Appellate Authority will consider the orders passed by the Board in the light of recommendations of the Committee and will pass the orders as deemed appropriate.
If the taxpayer is not satisfied with these orders,Dfa Ho he may continue to pursue the normal path of appeals before the relevant authority, tribunal or court. In such a case it will be assumed as if no order has been passed by the Board.
