They are wrong. You can renew a license which expired up to 7 years ago but at hefty cost.
See charges here: Islamabad Traffic Police | Official Website
Post expiry, renewal after 3 years but before 7 years will cost you PKR2000.
ITP dumbf**** keep saying different things on various issues. Even when you have to add a category to an existing license, e.g. adding license for bike to existing car license, the ITP facebook group rep says you just need to appear for driving test only and pay fresh driving license fee only but people at ITP office say that you need to start over, get learner for bike category, give sign test again followed by driving test after which you get to apply for normal license just to add one category to existing license. It is a retarded and discouraging approach which is totally against what ITP ideally should stand for.