Law: Income Tax Ordinance, 2001

Section: 122(5A),120,210

(a) Income Tax Ordinance (XLIX of 2001)---Ss. 122(5A), 120 & 210---Amendment of assessment---Discrepancies noticed were: that advertisement expenses needed to be amortized; that no lease assets had been declared but lease rentals were claimed and that commercialization fee paid to Development Authority was claimed as a revenue expense---Order passed under S.120(1) of the Income Tax Ordinance, 2001 was considered by the Additional Commissioner Inland Revenue to be erroneous and also prejudicial---Notice under S.122(9) read with S.122(5A) of the Income Tax Ordinance, 2001 was issued and proceeded to amend the already completed assessment by making certain additions towards the original assessed net loss---Taxpayer contended that for attracting provisions of S.122(5A) of the Income Tax Ordinance, 2001, it was the Commissioner who had to consider that the assessment order was erroneous in so far as it was prejudicial to the interest of revenue; that he intended to amend the assessment order but in no way such exercise had to be executed by the Additional Commissioner Inland Revenue; that after doing so, the Commissioner may delegate his power in writing, under S.210(1) of the Income Tax Ordinance, 2001, to any officer of Inland Revenue subordinate to the Commissioner, all or any of the powers or functions conferred upon or assigned to the Commissioner under the Income Tax Ordinance, 2001; and that as Additional Commissioner Inland Revenue and not the Commissioner had considered that the assessment order passed under S.120 of the Income Tax Ordinance, 2001 was erroneous and was also prejudicial to the interest of revenue and issued the show cause notice under S.122(9) read with S.122(5A) of the Income Tax Ordinance, 2001, such act of the Additional Commissioner Inland Revenue was not sustainable in law---Validity---Section 122(5A) of the Income Tax Ordinance, 2001 envisaged that Commissioner was under legal obligation to consider and apply his conscious mind that the assessment order passed under S.120 of the Income Tax Ordinance, 2001 was erroneous and that was also prejudicial to the interest of revenue---After having considered so, the next step was that the…

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