dated 21.07.2026 to publish Draft Rule 231CB proposed to be inserted in the Income Tax Rules, 2002 regarding Independent Case Scrutiny Committees

Government ofPakistan Revenue Division Federal Board of Revenue *** Islamabad, the 2l't July, 2026. NOI'IFICATION S.R.O. l138(I)/2026.- The following draft of certain further amendments in the Income Tax Rules, 2002, which the Federal Board of Revenue proposes to make in exercise of the powers conferred by sub-section (4) ofsection l33A read with sub-section (1) of section 237 ofthe lncome Tax Ordinance,2001 (XLIX of200l), is hereby published for information of all persons likely to be affected thereby and. as required by sub-section (3) ol'the said section 237, notice is hereby given that objections or suggestions thereon, if any. may for consideration of the Board be sent within three days of publication of the amendments in the official Gazette. Any objections or suggestions which may be received from any person, before the expiry of the aforesaid period, shall be taken into consideration by the Federal Board ofRevenue, namely: - Draft ame ndments In the aforesaid rules, after rule 231CA, the following new rule shall be inserted, namely: - "231C8. Independent case scrutiny committees. - ( 1) This rule shall provide for constitution ol independent case scrutinl committees. (2) In this rule, unless there is anlthing repugnant in the subject or conlext, - (a) "Chairman" means the chairman of the independent case scrutiny Committee; (b) "Commissioner" means as defined in clause (13) of section 2 of the Income Tax Ordinance 2001 (XLIX of200l); (c) "Committee" means any of the Independent Case Scrutiny Committees constituted under these rules for specified territorial iurisdiction; (d) "petition" means a petition to the Supreme Court under Articlel85(3) of the Constirution of the Islamic Republic ol Pakistan or Federal Constitutlonal Court, arising from any of the tax laws; (e) "reference" means a reference to the High Court under Section 133 of the Income Tax Ordinance, 200 I (XLIX of 200 I ); (0 "Secretary" means an officer ollnland Revenue nominated by the Board for the purposes of the Committee; (g) "Serving member of the Committee" means an in service officer of BS 20 or above oflnland Revenue service; and (h) "tax laws" means the Inconre Tax Ordinancc. l00l (XLIX ol 2001). the Clustoms Act, 1969 (lV of 1969), the Salcs Tax .Act. 1990, and rhe Federal [.,xcisc Act, 2005 and includc.s anr rules. regulations. or notillcations issued lhereunder. (3) The Board by an order shall constitute the following committees with powers, functions and jurisdiction, namely: - 1,

Committce No. I S. Mem ber Statu s Functions and Jurisdiction No. (i) to timely examine each case an( recommendation to file ol A retired Judge of the make I Supreme Court, Federal Chairman otherwise a relerence belore the High Court. a petition before the Supreme Constitutional Court or any Court or Federal Constitutional Court; of the High Courts of Pakistan (ii) to review pending references and determine An Advocate having not petitions periodically to of litigation is less than fifteen years' whether continuation warranted in the interest of revenue; experience in tax and (iii) to maintain a database of settled commercial litigation legal questions and relevant precedents2 before the High Courts Member and/or the Supreme Court to guide future litigation decisions and ensure consistencyl and ofPakistan (iv) to identifo slstemic issues requiring legislative or administrative intervention and recommend appropriate A senior serving or retired measures to theBoard. officer of the IRS of BS 20 Jurisdiction: References to be filed -) or above Member before Islamabad High Cotut and CPLAs before the Supreme Court and Federal Constitutional Court by LIO tslamabad. CTO Islamabad. RTO lslamabad. RTO Peshawar. RTO Abbonabad DG &[ lslanrabad and its Directorates

ommittee No. 2 s. ember Status Functions &,Iurisdiction No. (i) to timely examine each case and make recommendation to file or otherwise a reference before the High Cou(. a petition before the Supreme Court or Federal Constitutional Courtl A retired Judge of the I Chairman (ii) to review pending references and Supreme Court. Federal petitions periodically to determine Constitutional Court or any whether continuation of litigation is of the High Courts ol warranted in the interest ofrevenue: Pakistan (iii) to maintain a database of settled legal questions and relevant precedents to guide future litigation decisions and ensure consistency; and (iv) to identily systemic issues An Advocate having requiringlegislativeor administrative not less than fifteen intervention and recommend appropriate years' experience in tax and measures to the Board- commercial litigation 2 before the High Courts Memher Jurisdiction: References to be filed and/or the Supreme Court before Lahore High Court and CPLAs of Pakistan before the Supreme Court and Federal Constitutional Court by LTO Lahore. LTO Multan. CTO Lahore, RTO Lahore, RTO Rawalpindi, RTO A senior serving or retired Gujranwala" RTO Faisalabad, RTO officer of the IRS ol BS 20 Multan, RTO Bahawalpur, RTO Sialkot. -) or above Member RTO Sargodhaand RTO Sahiwal.

Committee No. 3 S Member Status & Jurisdiction No. lnro"tion. retired Judge of hairman I Supreme Court. Federa onstitutional Court or an f the High Courts o akistan An Advocate having not les! than fifieen years' experienc! in tax and commercial ') litigation before the Higt Member Courts and/or the Supremd Court of Pakistan A senior serving or retired officer of the IRS ol BS 20 -) Member or above

(4) The Secretary as defined in clause (f) of sub-rule (2) of these rules shall provide secretariat and administrative support to the Committee and shall- (a) convene meetings with the appioval ofthe Chairman, circulate the agenda, maintain minutes and records ofproceedings; (b) coordinate with the concemed field formations and obtain records, comments, briefs or any other information required by the Committee; (c) communicate the decisions, recommendations and directions of the Committee to the concemed Commissioners and field formations, and ensure necessary follow-upl (d) maintain the records. database and correspondence ofthe Committee; (e) keep the concemed Commissioners informed regarding the proceedings of cases before the Committee: and (0 perform such other functions as may be assigned by the Committee, the Chairman or the Board. (5) The Committee may co-opt a Chartered Accountant .rs a non-voting member, where it is deemed necessary. The remuneration ofsuch non-voting member shall be determined by the Board. (6) The Board may, for the purpose of identifuing suitable candidates, constitute a Search Committee, the composition, terms of reference and procedure whereof shall be determined by the Board. (7) Proceedings and records placed belore the Committee shall be confidential. Any member having a conflict of interest in a matter shall recuse himself, and such recusal shall be recorded in the minutes. (8) The Secretary shall convene meetings. circulate agenda. maintain minutes and a case register or docket, and communicale recommendations of the Committee to the Commissioner concerned. (9) The Commissioner having jurisdictions for the purposes of this rule shall, within ten days ofreceipt ofthe order olthe ATIR or the High Court, refer a case for pre-filing scrutiny, and the Secretary shall place such cases before the Committee accordingly. (10) The referral shall contain all material particulars including the manner of reference, documents required, revenue implications involved, questions of law requiring interpretation, precedents and settled law, basis of the case. the original decision, the appellate decision, where applicable, and the recommendations of the Commissioner concemed, where applicable, and all relevant documents shall be attached thereto.

a (l l) The Board may for reasons to be recorded in writing transfer the jurisdiction of case from one scrutiny committee to another Committee. (12) The Committee may call for any record, document. brief. or clarification from any offrce or field formation through the Secretary. (13) The Committee shall convene on a daily basis. whether in person or online. and shall prioritize its workload so as to ensure that every recommendation is finalized within a period of fifteen days from the date ofreferral: Provided that where, lor reasons to be recorded in writing, a recommendation cannot be finalized within the said period. the Committee may extend the said period to such further time but not beyond limitation period provided in the law as may be necessary, subject to intimation to the Board. (14) Where the Committee recommends non-pursuance of any case, the Secretary shall intimate the Commissioner concemed for compliance ol such directions. (1s) The quorum for a meeting of the Commitees shall be two Members, including the Chairman. (16) The decision shall be taken by majority vote and shall be recorded in writing: any dissenting opinion. ifrecorded by a Member. shall lorm part ofthe official record. (17) While making decision of filing of reference or petition, the committee shall keep in view the binding precedents set up by the Supreme Court ofthe Pakislan or Federal Constitution Court, revenue involved in the particular case or other similar cases and interpretation of law and facts ofthe case. (18) If the Committee may not render a decision within the prescribed timeline (including any extension granted), the case shall be deemed to have been cleared for filing, subject to compliance with all other applicable legal requirements and the Secretary shall record in writing that the prescribed period has been lapsed and intimate Commissioner concemed accordingly. (19) Where the period of limitation for filing a reference or petition is expiring within fifteen days, or where there is imminent and substantial revenue loss requiring urgent intervention. the matter shall be placed before the Chairman as an emergency case. (20) The Chairman may, after prima facie satisfaction of urgency, approve filing of reference or petition.

(21) Any emergency approval granted under sub-rule (19) shall be subject to post-facto review by the full Committee within thirty days of the decision and the committee may decide to withdraw the case if the law and facts so permits. (22) The Committee shall cause to be published, on a yearly basis, anonymized summaries of its recommendations, excluding confidential commercial information and taxpayer identifuing details. The published summaries shall include the questions of law considered, the decision criteria applied, and the recommendations made. (23) The Secretary shall maintain a searchable database of published decisions for reference by field formations and to ensure consistency in future decisions. (24) Members shall hold office for a term of one year which may be extendable for a further term on continued fitness and satisfactory performance. as may be decided by the Board. (25) Chairman or any Member may resign lrom his office at any time by writing under his hand addressed to the Board with thirty days notice. (26) Chairman or any Member may be removed by the Board on grounds of conflict of interest, misconduct, breach of confidentiality, or inability to perform functions, after providing an opportunity of being heard. (27) The Chairman and Members of each Committee shall be paid fees as follows:- (a) the Chairman shall be entitled to a monthly fee of twelve hundred thousand rupees, and in addition thereto, a per case fee of twenty-five thousand rupees in respect of which a recommendation is made, whether in favour of filing or otherwise, subject to a maximum of twenty cases per month; (b) the-Advocate Member shall be entitled to a monthly fee of eight hundred thousand rupees, and in addition thereto. a per case fee of twelve thousand and five hundred rupees in respect of which a recommendation is made, whether in favour of filing or otherwise, subject to a maximum of twenty cases per month; (c) where a retired officer of Inland Revenue is nominated as a Committee member, he shall be entitled to a monthly fee of eight hundred thousand rupees, and in addition thereto, a per case fee of twelve thousand and five hundred rupees in respect of which a recommendation is made, whether in favour of filing or otherwise, subject to a maximum of twenty cases per month; (d) the remuneration ofthe support staffshall be determined by the Board; and (e) The serving Board Member and the Secretary shall not be entitled to additional

remunerationl except as provided in rules related to reward and honorarium. (28) All Members shall be entitled to TA/DA for official travel as admissible to a grade 2l officer of the Federal Govemment. (29) The Committee shall submit an annual report to the Board by the 31st of March each year, covering the preceding financial year and shall consist of, - (a) the number ofcases reviewed, and recommendations made (to file, not to file. or to withdraw); (b) the ourcome offiled references and petitions (decided in favour, against, pending, or settled); (c) analysis of success rate and factors contributing to favorable or unfavorable outcomesl (d) revenue implications of decisions made pursuant to Commiuee recommendations; (e) identification of recurring legal issues and systemic problems requiring legislative or administrative intervention; and (0 recommendations for improving litigation management and enhancing the effectiveness of the Committee. (30) The annual report shall be placed before the Board for consideration and appropriate action.". tF.No.l (2)R&S/20261 (Muhammad A in Qureshi) Secretary (Rules & SROs)