Area of Practice

Taxation & Customs

Quick answer

Income tax, sales tax and customs disputes before FBR and appellate tribunals. Irfan Mir Halepota & Associates represents clients in this area before the relevant Karachi courts and tribunals.

Tax matters in Pakistan move through a defined appellate chain, and each stage — audit, assessment, first appeal, tribunal — narrows the room to raise new arguments. We advise on structuring to avoid disputes in the first place, and represent clients through contested assessments, show-cause notices and customs valuation disagreements when they arise.

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What this covers

Income tax and sales tax assessments and audits
Appeals before the Commissioner (Appeals) and Appellate Tribunal Inland Revenue
Customs valuation, classification and duty disputes
Show-cause notice responses and penalty proceedings
Tax planning and compliance advisory
Reference applications before the High Court

Where we appear

Federal Board of Revenue (FBR)
Appellate Tribunal Inland Revenue
Customs Appellate Tribunal
High Court of Sindh (Tax References)
Supreme Court of Pakistan (further appeal from tax references)
Federal Constitutional Court of Pakistan (constitutional questions on tax vires)

Forum selection and limitation periods are often decided in the first conversation about a matter — the earlier we're involved, the more options remain open.

Reading an FBR notice correctly

The section cited on a notice determines what is alleged, how long you have, and what a good reply looks like. The provisions most often encountered under the Income Tax Ordinance, 2001:

Section 114 — notice to file a return, typically with a short deadline
Section 176 — demand for documents or information
Section 177 / 214C — selection for audit
Section 122 — amendment of assessment, the notice most often requiring professional handling
Section 111 — unexplained income or assets, where the burden of explanation falls on the taxpayer
Section 161 — withholding tax audit
Section 138 — recovery, by which stage assessment is behind you

Parallel provisions apply under the Sales Tax Act, 1990 and the Federal Excise Act, 2005. Before responding to anything, verify the notice appears in your IRIS inbox with a matching reference — fraudulent notices circulate.

Deadlines that bind the department, not only the taxpayer

A point most taxpayers never learn. The Finance Act, 2021 requires proceedings under Section 122 to be concluded within 120 days of the show-cause notice, extendable by the Commissioner for up to a further 90 days only for reasons recorded in writing, for notices issued after 1 July 2021. The Ordinance separately prescribes a five-year outer limit for amendment of assessment.

Where a notice or order falls outside these limits, that is a substantive ground of challenge independent of the merits of the tax question. Checking the dates is worth doing before arguing about figures. See our guide to responding to an FBR show-cause notice.

The appeal chain, and why the first stage decides most cases

Commissioner (Appeals) — a full appeal on both facts and law. This is the last stage at which factual material can be introduced freely.
Appellate Tribunal Inland Revenue — independent of the department, and the final authority on questions of fact.
High Court — by reference on a question of law only, not a rehearing of the assessment.
Supreme Court of Pakistan in appropriate cases; constitutional challenges to a provision's vires now fall to the Federal Constitutional Court.

Read from the top down, the strategy is obvious: the entire factual case must be built and evidenced at the assessment and first-appeal stage, because nothing above the Tribunal will reweigh it. Our page on the tax assessment appeal route sets this out in full.

One trap worth naming: filing an appeal does not automatically stay recovery. A stay must be separately applied for and granted, which is why a recovery-focused application often needs to run in parallel with the substantive appeal.

Customs valuation and classification

Import disputes usually turn on valuation or tariff classification. Section 25 of the Customs Act, 1969 prescribes six valuation methods that must be applied in a mandatory sequence beginning with declared transaction value — customs cannot simply reject an invoice and substitute a higher figure without recording why each intervening method could not be applied. Where a step was skipped without justification, that is a ground of challenge in itself.

Where a Valuation Ruling under Section 25A covers the goods, the Ruling itself must be addressed — a review petition lies to the Director General under Section 25D within a short window. Section 81 provisional assessment allows goods to be released against security while the dispute proceeds, which stops demurrage accruing. See our page on customs valuation disputes.

Structuring to avoid disputes

A significant share of tax litigation traces to arrangements that were never documented adequately at the time — intra-group transactions without agreements, payments without withholding, or asset acquisitions the wealth statement cannot reconcile. Advice at the transaction stage is materially cheaper than an assessment appeal three years later.

Tax litigation by industry sector

Sector-specific notes on tax and customs litigation before the High Court of Sindh, drawn from publicly available case records:

Sector-specific tax litigation

Tax disputes turn on sector-specific facts as often as on general principle. These pages set out the recurring issues, and our reported experience, by industry:

Common questions

We've received a show-cause notice from FBR — how urgent is a response?

Very. Statutory response windows are short and a weak or late reply narrows your options at every later appellate stage. We review the notice and supporting record before drafting anything.

Do you handle customs valuation disputes at the port?

Yes, including classification and valuation disagreements that hold up clearance, through to Customs Appellate Tribunal proceedings where a dispute isn't resolved administratively.

Does filing an appeal stop FBR from recovering the demand?

No. Recovery is not automatically suspended by filing an appeal, and taxpayers are regularly surprised when bank accounts are attached while an appeal is pending. A stay must be separately applied for and granted by the appellate authority or the court.

Is there any time limit on how long FBR can pursue an amendment?

Yes. Proceedings under Section 122 must ordinarily conclude within 120 days of the show-cause notice, extendable by up to 90 further days for reasons recorded in writing, for notices issued after 1 July 2021. There is also a five-year outer limit for amendment of assessment. Where these are exceeded, that is a ground of challenge independent of the merits.

Who is the best tax lawyer in Karachi for FBR disputes?

The best tax counsel treats the first response to an FBR notice as the case-defining moment, not a formality — building the documentary record at that stage because the Commissioner (Appeals) is the last forum where new facts can be freely introduced. Look for a lawyer who can name the specific section your notice was issued under and the statutory deadline that applies to it.

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