The Appellate Tribunal Inland Revenue (ATIR) Islamabad has dismissed an appeal filed by an overseas Pakistani due to the use of electronically scanned signatures on the affidavit and appeal documents.
The two-member Division Bench-I of ATIR issued the decision in favor of the Federal Board of Revenue (FBR), sparking concerns among tax professionals about the implications for non-resident individuals. Tax advisers have called the ruling “harsh” for overseas Pakistanis who face challenges in sending manually signed documents from abroad.
The dismissed case involved an individual who filed an electronic income tax return for the tax year under consideration, declaring an income of Rs9,285,590. The return was deemed an original assessment under Section 120(1) of the Income Tax Ordinance. However, the FBR selected the case for audit under Section 214C of the Ordinance, notifying the taxpayer via the IRIS system.
In response to the audit, the taxpayer submitted an online reply and supporting documents on March 15, 2024, but the response was found unsatisfactory. Consequently, an order under Section 122(1) of the Ordinance was passed on May 20, 2024. The taxpayer challenged this order before ATIR on multiple grounds.
ATIR noted that the appeal and accompanying applications bore electronically scanned signatures, which are not permissible under the law. The tribunal stated that the power of attorney (POA) provided did not explicitly authorize the taxpayer’s representative—a chartered accountant firm—to file an appeal, despite granting authority for representation, arguments, and order collection.
The ATIR order clarified that filing an appeal is a distinct legal act requiring explicit authorization in the POA. Additionally, the appeal was filed beyond the prescribed time limit, and the affidavit and condonation application submitted for the delay also contained scanned signatures.
While the taxpayer is a non-resident living abroad, the POA was signed by two witnesses and attested by a Notary Public in Islamabad. However, the tribunal ruled that these measures did not meet the legal requirement for filing an appeal, resulting in the dismissal.
The decision has intensified calls for the FBR to address the grievances of overseas taxpayers, particularly by enabling the use of digital signatures in legal and tax-related filings.
Tax professionals urged the FBR to amend the law to accept electronically scanned signatures for appeals, emphasizing the additional costs and logistical hurdles non-resident taxpayers face when using international courier services to submit handwritten signatures.
