FBR Proposes Committees To Screen Tax Cases

The Federal Board of Revenue (FBR) has proposed the creation of Independent Case Scrutiny Committees to stop weak or unnecessary tax cases from being taken to higher courts, according to SRO 1138(I)/2026, which contains draft amendments to the Income Tax Rules, 2002.

Introduced through the Finance Act 2026 for all federal taxes, these committees will examine cases before references are filed in High Courts or petitions are submitted to the Supreme Court or the Federal Constitutional Court.

The objective is to ensure that only cases involving sound legal grounds, significant questions of law, or substantial revenue implications proceed to higher judicial forums.

According to sources, tax field formations often filed appeals regardless of their legal merit because officials feared accountability investigations, suspension, or disciplinary proceedings if they chose not to pursue a case.

The proposed system is intended to improve the standard of tax litigation, reduce unnecessary legal disputes, maintain consistency in the department’s legal stance, and strengthen the FBR’s overall litigation management.

Three committees will be established, each assigned a specific territorial jurisdiction.

Every committee will be chaired by a retired judge of the Supreme Court, Federal Constitutional Court, or a High Court. Other members will include an advocate with at least 15 years of experience in tax and commercial litigation before superior courts, along with a serving or retired Inland Revenue Service officer of BS-20 or above.

The committees will decide whether a case justifies filing a reference or petition and will periodically review pending litigation to determine whether continuing the case remains in the government's revenue interest.

They will also maintain a database of settled legal issues and judicial precedents to ensure consistency in future litigation while identifying legal and administrative gaps that may require legislative reforms.