The Federal Board of Revenue (FBR) has proposed a new system to stop weak tax cases from reaching Pakistan’s higher courts by setting up independent committees to review appeals before they are filed.

The proposal, issued through draft amendments to the Income Tax Rules, 2002 under S.R.O. 1138(I)/2026, aims to reduce unnecessary litigation and ensure that only cases involving substantial legal questions or significant revenue implications are taken to the High Courts, Supreme Court, or the Federal Constitutional Court.

Under the proposed framework, the FBR will establish three Independent Case Scrutiny Committees with jurisdiction across different regions of the country.

Each committee will comprise:

• A retired judge of the Supreme Court, Federal Constitutional Court, or a High Court as chairperson.
• A lawyer with at least 15 years of experience in tax and commercial litigation.
• A serving or retired Inland Revenue officer of BS-20 or above.

Besides deciding whether new appeals should be filed, the committees will also review pending tax cases to determine whether continuing litigation remains in the government’s interest. They will maintain a database of court precedents and settled legal issues to improve consistency in tax litigation and recommend legislative or administrative reforms where needed.

Under the draft rules, Commissioners Inland Revenue will have to refer cases to the committees within 10 days of receiving decisions from the Appellate Tribunal Inland Revenue or a High Court. Each referral must include complete case records, proposed legal questions, revenue impact, relevant judicial precedents, and the commissioner’s recommendations.

The proposal also introduces a fast-track mechanism for cases nearing statutory filing deadlines. In such situations, the committee’s chairperson may grant temporary approval to file an appeal, which must then be reviewed by the full committee within 30 days. The committee may later recommend withdrawing the appeal if it no longer serves the public interest.

To improve transparency, the committees will publish annual summaries of their recommendations without disclosing taxpayer identities.

Committee members will initially be appointed for one year, with extensions based on performance. The FBR will also have the authority to remove members in cases involving conflicts of interest, misconduct, or breaches of confidentiality.

Under the proposed remuneration structure, the chairperson will receive Rs. 1.2 million per month plus Rs. 25,000 per case, capped at 20 cases per month. The advocate member and retired Inland Revenue member will each receive Rs. 800,000 per month along with Rs. 12,500 per case.

The committees will submit annual performance reports to the FBR detailing the number of cases reviewed, litigation outcomes, success rates, revenue implications, and recommendations to improve Pakistan’s tax litigation system.