How to Object to an IRD Assessment You Disagree With

Getting an assessment order from the Inland Revenue Department that you believe is wrong isn't the end of the road — Nepal's tax law gives you a structured, multi-stage path to challenge it. But every stage comes with a strict deadline and a mandatory deposit, and missing either can cost you your right to object at all. This guide walks through the administrative review process, the escalation to the Revenue Tribunal, and what actually happens to your payment deadline while you're disputing.

Stage One: Administrative Review Before the Revenue Tribunal

Before you can take a disputed assessment to the Revenue Tribunal, the law requires you to first seek administrative review from the Inland Revenue Department itself, under Section 115 of the Income Tax Act, 2058. This isn't a formality — it's reviewed by an officer senior to the one who issued the original assessment, and it's a genuine opportunity to argue points that may have been inadequately considered, submit additional documentation, and seek a penalty waiver where an under-declaration was made in good faith.

Your application should clearly and specifically state the grounds of your objection, supported by whatever documentary evidence backs your position — invoices, bank statements, contracts, or prior correspondence with IRD. A vague objection without specific grounds is far more likely to be rejected outright.

Deadline to File Your Objection

You must file your administrative review application within 30 days of receiving the assessment order, though an extension can be requested on reasonable cause shown — don't assume an extension will be granted automatically, and file as early as possible rather than relying on one. If the IRD doesn't issue a decision within 60 days of your application, the review is deemed rejected by law, and you become entitled to escalate to the Revenue Tribunal even without an explicit decision.

If you're dissatisfied with the actual decision IRD does issue, you have 35 days from receiving that decision to file your appeal with the Revenue Tribunal under Section 116. Whichever route applies — deemed rejection or an adverse decision — the clock starts running the moment the relevant event occurs, so track these dates carefully.

Required Deposit / Pre-Payment Rules

Filing an objection in Nepal isn't free of financial commitment — you're required to deposit a portion of the disputed amount as a condition of the review or appeal proceeding at all:

• Administrative review (Section 115) — you must deposit 100% of any undisputed tax, plus 25% each of the disputed tax, interest, additional fee, and penalty amounts.
• Revenue Tribunal appeal (Section 116) — you must submit the undisputed amount in full, plus 50% of the disputed tax, charge, and fine, either as a cash deposit or a bank guarantee.
• Credit for prior deposit — if you already deposited 25% at the administrative review stage, that amount is generally credited toward the larger 50% required for the Tribunal appeal, so you're only topping up the difference rather than paying twice.

These deposits exist regardless of how strong you believe your case is — they're a procedural pre-condition to being heard, not a penalty for a weak argument. Budget for this deposit requirement before deciding to object, since it directly affects your cash flow during the dispute.

What Happens Beyond the Revenue Tribunal

If you remain dissatisfied after the Revenue Tribunal's decision, a limited right of appeal exists to the Supreme Court of Nepal — but strictly for cases involving a substantial question of law, not simple factual disagreement over figures. A petition for leave to appeal must generally be filed within 35 days of the Tribunal's order, and the Court must be satisfied the case genuinely raises a significant legal issue before it will even hear it.

Frequently Asked Questions

Q1. Does filing an objection pause the payment deadline?

No, generally not. The law is explicit that enforcement of the underlying decision is not automatically affected simply by filing an administrative review application or a Revenue Tribunal appeal. You still need to make the required deposit (100% of undisputed amounts plus the relevant percentage of disputed amounts) at each stage, and IRD can generally continue recovery action on amounts outside what you've formally disputed and deposited for. Filing an objection buys you a review process — it does not, on its own, buy you a blanket pause on payment.

Q2. What if I miss the 30-day deadline for administrative review?

An extension can be requested on reasonable cause shown, but it isn't guaranteed. Missing the deadline without a valid extension generally means you lose the right to the administrative review stage for that assessment, which can also affect your ability to later reach the Revenue Tribunal, since Tribunal appeals are built on top of a completed (or deemed-rejected) administrative review. File as early as possible rather than waiting until close to the deadline.

Q3. Can I negotiate a settlement instead of going through the full process?

In some cases, yes — IRD has shown openness to negotiated settlements and mediation as alternatives to a full formal hearing, particularly for reducing time and cost on both sides. This doesn't replace the formal deadlines and deposit requirements described above, but it's worth raising with your CA or lawyer as a parallel option while your formal objection is in process.

Disagreeing with an IRD assessment is a normal, structured part of Nepal's tax system — but the process rewards speed and preparation. Know your 30-day and 35-day deadlines, budget for the required deposits at each stage, and build your documentary case before you file rather than after. A well-prepared administrative review resolves most disputes without ever needing to reach the Revenue Tribunal.