Law: Income Tax Ordinance, 2001

Section: 120,113A,114,115(4),177,177(4)

Income Tax Ordinance (XLIX of 2001)----S. 177(4)---Audit---Selection of case for audit was declared illegal by the First Appellate Authority by following a of High Court on the ground that no notice was issued to the taxpayer before selection of case for audit and no further proceedings could be conducted---Department contended that there was no law requiring issuance of notice before selection of case for audit; and very requirement of issuance of notice before audit had been expunged by the Supreme Court of Pakistan and as such, no advantage could be taken from the relied by the First Appellate Authority---Validity---Judgment referred to by the Department may not again be preferred to that of High Court wherein it was held that pre selection notice was necessary while relying on of Supreme Court of Pakistan to the effect that even if the statute did not incorporate provision as to the issuance of notice yet the same should be read as having been provided for an action which was detrimental to one's interest may be taken only after confronting him as to the nature of action---Very findings of the High Court may have to be followed as to the requirement of the pre selection notice---Findings of First Appellate Authority were unexceptional and there being no force in appeal, the same was rejected by the Appellate Tribunal. Writ Petition No.4630 of 2009 rel./fol. Writ Petitions Nos. 960 of 2008 and 11166 of 2009 distinguished. Muhammad Umer v. C.I.T. 2009 PTD 284 and C.I.T. v. Fatima Sharif Textile, Kasur 2009 PTD 37 ref. THIS ORDER PASSED BY: MUHAMMAD JAHANDAR (JUDICIAL MEMBER).---This order shall dispose of the above mentioned appeal filed by the Revenue against an order dated 26-2-2010 passed by learned CIT(A-II), Islamabad. 2. Brief facts are that the case was selected for audit under section 177(4) of the Income Tax Ordinance, 2001 which was agitated by the taxpayer in appeal before learned CIT(A) on the ground that selection of the case for audit under section 177(4) is illegal because no notice was issued to the taxpayer before selection of case for audit and no further proceedings could be conducted. Learned CIT(A) after hearing appeal followed an order…

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