income Tax Reference to High Court is filed against the order of Appellate Tribunal Inland Revenue under Section 133 of Income Tax Ordinance which says as under :-

133. — (1) Subject to section 126A, within thirty days of the communication of the order of the Appellate Tribunal or, as the case may be, the Commissioner (Appeals), the aggrieved person or the Commissioner may file a reference, in the prescribed form along with a statement of the case, before the High Court, stating any question of law or a mixed question of law and facts arising out of such order:

Provided that the applicant shall also file complete record of the Appellate Tribunal or, as the case may be, the Commissioner (Appeals) within fifteen days of preferring an application under this section.

Explanation.– For the removal of doubt it is clarified that reference against order of the Commissioner (Appeals), communicated after the date of commencement of the Tax Laws (Amendment) Act, 2024 (V of 2024), shall lie before the High Court notwithstanding the proceedings pending prior to the date of commencement of the said Act.

(2) The statement to the High Court referred to in sub-section (1), shall set out the facts, the determination of the Appellate Tribunal or, as the case may be, the Commissioner (Appeals) and the question of law or a mixed question of law and facts which arises out of its order.

(3) Where, on an application made under sub-section (1), the High Court is satisfied that a question of law or a mixed question of law and facts arises out of such order referred to in sub-section (1), it may proceed to hear the case.

(4) A reference to the High Court under this section shall be heard by Special Bench or the Special Benches, as the case may be, to be constituted by the Chief Justice, as deemed necessary for hearing cases under this section, comprising of not less than two judges of the High Court and, in respect of the reference, the provisions of section 98 of the Code of Civil Procedure, 1908 (Act V of 1908), shall apply, so far as may be, notwithstanding anything contained in any other law for the time being in force.

(5) The Special Bench shall decide a reference within six months from the date of its filing.

(6) The High Court shall establish a case management system to ensure that sufficient number of Special Benches are constituted, so as to ensure that a reference filed under this section is decided within the stipulated six months.

(7) The High Court upon hearing a reference under this section shall decide the question of law or a mixed question of law and facts raised by the reference and pass judgment thereon specifying the grounds on which such judgment is based and the Appellate Tribunal’s order or, as the case may be, the Commissioner (Appeals)’s order shall stand modified accordingly.

(8) The High Court shall send a copy of the judgment under the seal of the High Court to the Appellate Tribunal or, as the case may be, the Commissioner (Appeals).

(9) Notwithstanding that a reference has been made to the High Court, the tax shall be payable in accordance with the order of the Appellate Tribunal or, as the case may be, the Commissioner (Appeals):

Provided that the tax recovery shall not be made by the Commissioner for thirty days from the date of communication of the order of the Appellate Tribunal or, as the case may be, the Commissioner (Appeals):

Provided further that, if the amount of tax is reduced as a result of the judgment in the reference by the High Court and some amount of tax is found to be refundable, the High Court may, on application by the Commissioner within thirty days of the receipt of the judgment of the High Court that he wants to prefer petition for leave to appeal to the Supreme Court, make an order authorizing the Commissioner to postpone the refund until the disposal of the appeal by the Supreme Court.

(10) On an application filed in a particular reference and after affording an opportunity of being heard to the Commissioner, the High Court may stay recovery of tax, subject to deposit with the assessing authority of not less than thirty percent of the tax determined by the Appellate Tribunal or, as the case may be, the Commissioner (Appeals). Where recovery of tax has been stayed by the High Court by an order, such order shall cease to have effect on the expiration of a period of six months following the day on which it was made unless the reference is decided or such order is withdrawn by the High Court earlier.

(11) Section 5 of the Limitation Act, 1908 (IX of 1908), shall apply to an application made to the High Court under sub-section (1).

(12) An application under sub-section (1), by the aggrieved person other than the Commissioner, shall be accompanied by a fee of fifty thousand rupees.

(13) No application filed by the Commissioner under subsection (1) shall be entertained unless it is accompanied by a written authorization by the relevant Chief Commissioner.

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