Hi saatwik,
I'm not specialized in audio technology (I guess you are speaking about audio applications), but I can guess that if FIR filter are not used, this is because the same result is obtained more simply with IIR.
Of course, peak and notch filters can be made in FIR. But:
a) if the filter is sharp (high Q) a great order is needed
b) if you want to adjust the sharpness (Q) or the center frequency, all the coefficients must be changed.
Instead, simple peak filters can use IIR of 2nd order. The Q is adjusted changing only one coefficient, and the center frequency is adjusted changing another one.
The gain can be easily adjusted in both cases (IIR or FIR).
I hope this help you.
Regards
Z