Administrative Review and Revenue Tribunal Appeal in Nepal — Income Tax Disputes

IRD Decision

↓

Administrative Review — Inland Revenue Department

↓

Revenue Tribunal

For an ordinary administrative review:

Filing deadline

30 days from receipt of the reviewable decision.

Required payment/deposit

100% of undisputed tax

25% of disputed tax

The Department generally has: 60 days

to decide the administrative-review application.

If the taxpayer remains dissatisfied—or IRD fails to issue a decision within the statutory period—the taxpayer may proceed to the Revenue Tribunal according to the law. The Income Tax Act provides the 30-day filing period, 25% disputed-tax deposit and 60-day decision framework.

What Is Administrative Review?

Administrative Review is an internal statutory review by the Inland Revenue Department of a decision falling within Section 114.

It is not simply an informal letter to the tax office.

The application should:

• identify the reviewable decision;

• clearly state grounds;

• identify factual errors;

• identify legal errors;

• quantify disputed tax;

• contain supporting evidence.

Deadline — 30 Days

The application must normally be filed: within 30 days from receipt of notice of the decision.

The relevant starting point is therefore the date the decision notice is received, not merely the date printed on the assessment order.

Retain evidence of receipt.

Missed 30-Day Deadline

If the normal period has expired, Section 115 provides a limited extension mechanism.

The taxpayer must apply for extension: within 7 days after expiry

and IRD may, where reasonable cause exists, extend the filing period by up to: 30 additional days from expiry of the original period.

This is discretionary.

Do not plan a tax appeal on the assumption that an extension will automatically be granted.

Administrative Review Deposit

Before proceeding with the administrative review, the taxpayer must pay:

Undisputed tax

100% plus:

Disputed tax

25%

IRD's current Section 115 materials expressly state this requirement.

Example

Total additional assessed tax: NPR 10,000,000

Taxpayer accepts: NPR 2,000,000

Taxpayer disputes: NPR 8,000,000

Required: Undisputed tax:

NPR 2,000,000 plus

25% disputed tax: NPR 2,000,000

Total relevant payment/deposit: NPR 4,000,000 subject to credit for qualifying amounts already deposited.

Filing Review Does Not Automatically Suspend the Assessment

Section 115 states that filing the administrative-review application does not automatically stop implementation of the underlying decision.

IRD has statutory power to suspend or otherwise affect implementation while the review is pending, but that is a separate matter.

Therefore:

Appeal filed ≠ automatic stay of tax recovery.

Where recovery exposure is material, obtain specific legal advice on interim relief.

IRD Decision Period — 60 Days

IRD normally has: 60 days from the date of the administrative-review application to give notice of its decision.

If IRD fails to give the decision within that period, Section 115 permits the applicant to proceed with a Revenue Tribunal appeal.

This deadline should be calendared on the day the review is filed.

Revenue Tribunal

A taxpayer dissatisfied with the Section 115 decision may appeal to the Revenue Tribunal under Section 116 and the Revenue Tribunal Act.

The Revenue Tribunal Act provides a normal appeal period of: 35 days from knowledge/receipt of notice of the relevant decision.

The exact trigger date should be documented carefully.

Revenue Tribunal Deposit / Bank Guarantee

For the Income Tax Act appeal, the current Section 116 structure requires: 100% of undisputed assessed tax

plus security for: 50% of the disputed tax, fee and fine

through deposit or qualifying bank guarantee.

The 25% disputed-tax amount already deposited for Administrative Review counts toward the 50% requirement.

Example

Disputed tax: NPR 8,000,000

Tribunal requirement at 50%: NPR 4,000,000

Already deposited for Administrative Review: NPR 2,000,000

Additional amount/security ordinarily needed to reach the tax portion of the required level: NPR 2,000,000 subject to fee/fine treatment and the specific case.

Fees and Interest in the Deposit Working

Classify the assessed tax, fees, interest and fines separately before calculating the security for an appeal. Use the current statutory provisions and any court order applicable to the case. A liability described informally as a “penalty” should not be assigned a deposit percentage without checking its legal basis.

The filing working should show the disputed and undisputed components, the statutory security requirement and credit for qualifying amounts already deposited. Keep the assessment, prior payment evidence and any deposit direction together.

A material Tribunal filing should therefore use the current statute plus current judicial interpretation, not an old checklist.

Copy of Appeal to IRD

After filing the Tribunal appeal, Section 116 requires a copy to be registered/provided to IRD within: 15 days from filing of the appeal.

Do not treat Tribunal filing as the final procedural step.

Tribunal Appeal Does Not Automatically Stop Recovery

Like Administrative Review, filing an appeal with the Revenue Tribunal does not automatically stay implementation of the underlying assessment.

Any required interim relief must be addressed separately.

Direct Tribunal Appeal

Where the Director General himself/herself has made the underlying reviewable decision in circumstances covered by Section 116(4), the statutory route permits appeal to the Revenue Tribunal without requiring the ordinary internal review of that same decision.

Appeal File — Recommended CMA Structure

Folder 1 — Assessment

• original return;

• audit notice;

• proposed adjustment;

• taxpayer response;

• amended assessment;

• Section 102 notice.

Folder 2 — Evidence

• ledger;

• invoices;

• contracts;

• bank evidence;

• correspondence;

• reconciliations;

• valuation;

• technical reports.

Folder 3 — Law

• Act;

• Rules;

• Finance Act;

• Directive;

• circular;

• relevant judgments.

Folder 4 — Administrative Review

• application;

• grounds;

• deposit voucher;

• evidence of filing;

• IRD decision.

Folder 5 — Revenue Tribunal

• appeal;

• deposit/bank guarantee;

• evidence;

• copy filed with IRD;

• Tribunal notices/orders.

Tax Dispute Deadline Checklist

• Record assessment date

• Record notice-received date

• Calculate 30-day review deadline

• Calculate possible extension window

• Separate disputed/undisputed tax

• Pay 100% undisputed amount

• calculate 25% disputed deposit

• File Administrative Review

• retain acknowledgement

• Calendar 60-day IRD decision date

• Record review-decision receipt date

• Calculate 35-day Tribunal deadline

• calculate 50% security requirement

• Credit prior 25% deposit

• File Tribunal appeal

• Provide appeal copy to IRD within 15 days

• Address stay/recovery separately

Common Errors

Counting 30 days from assessment date instead of receipt of notice

Failing to separate disputed and undisputed tax

Assuming Administrative Review automatically suspends collection

Depositing another full 50% at Tribunal without giving credit for the earlier 25%

Ignoring the 35-day Revenue Tribunal deadline

Forgetting the 15-day copy-to-IRD requirement

Using an unverified classification of tax, fees, interest or fines in the deposit working

Further guidance and practical checks

Tax litigation is deadline-driven. A strong legal position can still fail procedurally if the taxpayer misses the filing period or statutory deposit requirement. Seek professional advice immediately after receiving a material assessment.