Tahseen Rehman Chartered Accountants

Income Tax Ordinance (Third Amendment) Act, 2026: Reforming ADR

The National Assembly has passed the Third Amendment Act, 2026, bringing structural changes to the Alternative Dispute Resolution (ADR) mechanism under Section 134A.

Summary of Key Changes:

Dissolution Timeline: The decision-making timeframe for ADR Committees has been extended from 60 to 90 days. If no decision is reached, the committee dissolves automatically, and the dispute reverts to regular adjudication.

Composition: Power to constitute the committee now rests solely with the Chairman of the FBR.

Appellate Rights: New provisions grant State-Owned Entities (SOEs) the right to appeal Committee decisions to the Supreme Court or the Federal Constitutional Court.

Understanding these procedural shifts is vital for effective tax litigation and dispute management.