A. RAHIM FOODS (PVT.) LTD., LAHORE vs COMMISSIONER INLAND REVENUE, LTO, LAHORE S

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A. RAHIM FOODS (PVT.) LTD., LAHORE VS COMMISSIONER INLAND REVENUE, LTO, LAHORE S. 131(5), Second & Third Provisos---Letter No.5030/DDJ/PE&CB/PRa dated 29.04.2025, issued by Director General, Directorate of District Judiciary of Lahore High Court---appeal before appellate Tribunal Inland Revenue, filing of---Stay, grant of---Extension of stay---Scope---Statutory period---Scope---appellant/Taxpayer (applicant) sought extension of the stay order granted by the appellate Tribunal Inland Revenue (Tribunal) while having already availed stay for 270 days---applicant filed application whereas Director General, Directorate of District Judiciary of Lahore High Court issued directions qua stay vide Letter No.5030/DDJ/PE&CB/PRa dated 29.04.2025 ('directions-in-question')---Validity---[Per Nasir Mahmud, Member]---Pursuant to directions-in-question, instant application seeking extension of stay cannot be granted as it is an admitted fact that the legally stipulated period of 90 days had already expired; therefore, in the subsistence of directions-in-question, further extension of stay could not be allowed---Per Rao Muhammad Nasir Jamil, Member] Taxpayer filed appeal before the Tribunal (on 16.05.2024) and fulfilled his responsibility by engaging in the hearing of case before the Tribunal---The main appeal was previously fixed (on 02.10.2024) but sent for re-hearing due to non-functioning of relevant Division Bench---after that said / relevant Bench had been re-constituted by the Chairman (vide his order dated 09.05.2025) which started functioning on 12.05.2025, the Miscellaneous application for stay had been fixed before the Bench on 22.05.2025, however, the main appeal was yet to be fixed before the said Bench owing to huge burden of appeals, the case of the appellant was still pending adjudication and the fixation of hearing of case had not been done so far---In such situation there did not seem to be any fault of the taxpayer, therefore, he could not be denied stay against recovery---Moreover, to get refund in case of any recovery done by the Department against any tax due which would be still sub-judice before the Tribunal if the case would go in favour of the taxpayer---Practically, the same was not free from hardship and huge expenses---Though tax law prohibits to grant stay upto 90 days, yet the Tribunal has inherent power to grant stay beyond statutory period where the decision is pending---Direction to issue stay upto a maximum limit is directory and not mandatory---Reliance by the other Member, hearing this case, on directions-in-question was mis-placed while referring against grant of stay in the present case---Para iv of the directions-in-question stated that "The Presiding Officer shall not extend stay orders beyond the period stipulated under the law" from which it was crystal clear that the matter was to be dealt under the law whereas under the law the 3rd proviso of S.131(5) of the Income Tax Ordinance, 2001, opened a window and relaxed the condition as enumerated in 2nd proviso by stating that where an appeal was not decided within the statutory period by the appellate Tribunal, the stay order under the 2nd Proviso shall not cease to have effect till finalization of the appeal by the appellate Tribunal---Since serious difference of opinion had arisen in the present case, hence, the matter may very kindly be referred to the Chairman for nomination of any third/ refree Member or constitute a Full Bench to resolve the relevant questions/propositions arising in wake of directions-in-question---application for extention of stay was disposed of accordingly.

A. RAHIM FOODS (PVT.) LTD., LAHORE vs COMMISSIONER INLAND REVENUE, LTO, LAHORE S — 2026 PTD 367 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

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