ATIR Dismisses Appeal of Overseas Pakistani Over Use of Electronically Scanned Signature

Appellate Tribunal Inland Revenue (ATIR) Islamabad has conveyed to the overseas Pakistanis that their appeals against the Federal Board of Revenue (FBR) would be dismissed at initial stage in case they file Power of Attorney (POA)/affidavit with electronically scanned signatures.  A two-member bench of the ATIR Division Bench-I has issued an order against a non-resident individual. The order stated that the POA annexed with the appeal, which is also signed using a scanned signature, does not explicitly authorize the said chartered accountancy firm to file the appeal on behalf of the appellant.  According to the prescribed procedure, the appeal must be filed by the appellant personally, bearing their handwritten signature and verification; otherwise, it cannot be considered properly filed by the aggrieved person. In response, the taxpayers’ representative explained that the appellant is a non-resident, currently residing abroad and rendering services outside Pakistan for several years.  Details of the case disclosed that the taxpayer, an individual, filed an electronic return of income for the tax year under consideration, declaring an income of Rs. 9,285,590. This return was deemed an original assessment under Section 120(1) of the Income Tax Ordinance. However, the FBR, exercising its powers under Section 214C of the Ordinance, selected the taxpayer’s case for audit, with intimation provided via the IRIS system.  In response, the taxpayer submitted an online reply on March 15, 2024, along with supporting documents, which were found unsatisfactory. Consequently, an order under Section 122(1) of the Ordinance was passed on May 20, 2024. Feeling aggrieved by this order, the appellant has now approached this Tribunal, challenging the impugned order on multiple grounds.  The Authorized Representative (AR) for the appellant was confronted with the issue that the appeal, along with the miscellaneous applications, had been filed using an electronically scanned signature of the appellant, which is not permissible under the law.  The ATIR order said that while the POA authorizes the said chartered company to represent the appellant, engage in proceedings, present arguments, and collect the appellate order, it does not expressly empower them to file an appeal. Filing an appeal is a distinct legal act and must be explicitly authorized in the POA.  Moreover, it is noted that the appeal was not filed within the prescribed time. The appellant submitted an application for condonation of delay along with an affidavit. However, both the application and the affidavit bear scanned signatures of the appellant.  Additionally, it is noted that the appellant, being a non-resident, is currently out of the country. Despite this, the POA is signed by two witnesses and attested/authenticated by Notary Public, Islamabad. This raises concerns regarding procedural propriety and adherence to legal standards. While courts generally consider the Doctrine of Substantial Compliance in procedural matters, the observations, in this case, leave no alternative but to dismiss the appeal on the grounds that it was not filed by the appellant or an authorized representative, it concluded.