This blog is written by Mr. Mohsin Alizai, Supervisor Taxation and Corporate Services. Please read this interesting and analytical blog and provide your valued comments.

Procedure for rectification of order u/s 221: Ego in the way of justice

Section 221 of the Income Tax Ordinance 2001 provided for rectification of order passes by Commissioner, Commissioner (Appeals) and Appellate Tribunal Inland Revenue on their own motion or on rectification application filed by the tax payer.


When any order is received by the taxpayer and it appears to be erroneous, the taxpayer files rectification application u/s 221 of ITO 2001 identifying mistakes apparent from the record. Rectification order is issued by the adjudicating officer after providing hearing opportunity to the taxpayer.


As we know that humans are subject to error and it should be rectified as and when discovered. Practically many bureaucratic hurdles are faced by taxpayer while obtaining rectification orders form the adjudicating officer as generally it is observed that adjudicating officers are reluctant to rectify mistakes in order passed by them.


There seems to be a lacuna in the procedure for obtaining rectification order as the order for rectification is to be passed by the same officer who has issued the original order. It is just like an accountant auditing Financial Statements prepared by him which brings self-review threat in to play.


The procedure needs amendment to facilitate the taxpayer. The law should provide for a penal decision on rectification application instead of the same officer issuing rectification order. The penal may comprise of an independent officer along with the adjudicating officer. This change in procedure will increase impartiality and transparency in the procedure along with removing bureaucratic hurdles.


Mohsin Alizai