Published by Tax and Law Consultants (TLC), Lahore
Updated: October 19, 2026
The FBR Tax Dispute Resolution Rules 2026 introduce revised procedures for Alternative Dispute Resolution (ADR) in Pakistan through S.R.O. 1827(I)/2026, dated October 15, 2026. These changes concern Rule 231C of the Income Tax Rules, 2002, and provide updated procedural requirements for eligible taxpayers seeking resolution of tax disputes.
The notification substitutes Rule 231C of the Income Tax Rules, 2002, establishing revised procedures for taxpayers seeking resolution of eligible tax disputes under Section 134A of the Income Tax Ordinance, 2001.
These changes are particularly relevant for businesses, companies, individuals and tax professionals dealing with disputes involving the FBR.
1. What Is Alternative Dispute Resolution (ADR)?
Alternative Dispute Resolution is a statutory mechanism through which eligible tax disputes may be addressed by an Alternative Dispute Resolution Committee (ADRC).
The framework provides an alternative route to conventional litigation, subject to the eligibility requirements and legal procedures prescribed under Section 134A.
The objective is to facilitate the resolution of eligible disputes through a structured committee-based process.
2. Major Changes in FBR Tax Dispute Resolution Rules 2026
A. Revised Application Procedure
Under the substituted Rule 231C, an aggrieved person seeking ADR must submit a written application to the FBR using the prescribed form.
The application should contain relevant details of the dispute, the taxpayer’s legal or factual position, and the supporting documents required under the applicable provisions.
B. Nomination Requirements
The revised rules require the applicant to provide details of the nominated person, including:
- CNIC copy
- Contact number
- Permanent address
- Email address
- Required undertaking
The taxpayer’s nominee must also provide the names of three retired judges in accordance with the applicable statutory provisions.
C. Committee Remuneration
The revised rules prescribe the following one-time remuneration for eligible committee members:
| Disputed Tax Liability | Chairperson | Each Eligible Member |
|---|---|---|
| Up to Rs. 50 million | Rs. 300,000 | Rs. 150,000 |
| Above Rs. 50 million | Rs. 500,000 | Rs. 250,000 |
These remuneration provisions exclude an Inland Revenue officer not below BS-21 and are subject to the terms of the notification.
D. Dissolution of the Committee
Where a committee becomes defunct or is dissolved due to certain administrative, legal or procedural reasons not attributable to the parties, the rules provide that remuneration is not payable and amounts already advanced or deposited must be refunded to the respective parties within 15 days.
E. Replacement or Unavailability of Committee Members
A chairperson or member who becomes unavailable or cannot serve due to a conflict of interest or another reason must formally inform the FBR within seven days from the notification of the committee’s constitution.
The notification also addresses reimbursement of amounts received in advance.
3. How Do These Changes Affect Pakistani Taxpayers?
The revised framework highlights the importance of careful preparation before initiating an ADR application.
Taxpayers should ensure that their documentation is complete, the dispute is eligible under Section 134A, and the required nomination formalities have been fulfilled.
Businesses dealing with significant tax assessments or pending disputes should evaluate the ADR route alongside their existing appeal and litigation options.
Importantly, filing an ADR application should not be treated as automatically suspending recovery proceedings or replacing other legal remedies. The effect on pending appeals and related proceedings must be assessed under the applicable statutory provisions.
4. Documents Taxpayers Should Prepare
Depending on the nature of the dispute, taxpayers may need:
- Taxpayer identification details and NTN
- Relevant assessment or disputed tax orders
- Statement of facts and legal grounds
- Details of pending appellate proceedings, if any
- Proposed basis for settlement
- Nominee details and supporting identification
- Undertakings and other prescribed documents
Professional review is advisable before submission.
5. Frequently Asked Questions
Q1. What is SRO 1827(I)/2026?
It is an FBR notification dated October 15, 2026, substituting Rule 231C of the Income Tax Rules, 2002 concerning the procedure for Alternative Dispute Resolution.
Q2. Can every taxpayer use ADR?
Not automatically. Eligibility depends on the requirements of Section 134A and the nature of the dispute.
Q3. Does ADR automatically cancel an existing tax demand?
No. The legal effect of ADR proceedings depends on the applicable statutory provisions and the circumstances of the case.
Q4. Is professional assistance necessary?
Although taxpayers should assess their individual circumstances, professional assistance can help with eligibility review, documentation and procedural compliance.
6. Professional Tax Dispute Assistance in Lahore
At Tax and Law Consultants (TLC), Lahore, we assist individuals, businesses and companies with Pakistan taxation and regulatory compliance matters.
Our services include:
- Income Tax Return Filing
- FBR Notice Responses
- Tax Assessment and Documentation Support
- Tax Dispute and Appeal Assistance
- Sales Tax Registration and Compliance
- NTN Registration and Business Tax Consultancy
If you have received an FBR notice or are considering available remedies in a tax dispute, professional guidance can help you understand the relevant procedures and documentation requirements.
Contact Tax and Law Consultants (TLC), Lahore
Website: https://tlczee.com
This article is based on the FBR notification dated October 15, 2026, and is intended for general information. Application of the rules depends on the facts of each case and the relevant statutory provisions.
Official Reference:
Federal Board of Revenue — S.R.O. 1827(I)/2026, dated October 15, 2026.
Read Official FBR Notification-SRO 1827(I)/2026
