Law: Income Tax Ordinance, 2001

Section: 120,120,122,177

Law: Constitution of Pakistan, 1973

Section: 199

Law: Finance Act, 2010

Section: 214

Income Tax Ordinance (XLIX of 2001)---Ss. 120, 122, 177 [as amended by Finance Act (XVI of 2010)] & 214---Constitution of Pakistan, Art. 199---Constitutional petition---Selection for audit---Self-assessment finalized under S. 120 of Income Tax Ordinance, 2001---Notice issued to assessee after more than one year of filing of tax return requiring him to produce record/ documents pertaining to several assessments for conducting tax audit by Commissioner---Petitioner's plea was that power to select case for tax audit vested in Federal Board of Revenue by virtue of S. 214(c) of Income Tax Ordinance, 2001, thus, Commissioner had no power to issue such notice; that impugned Notice was time barred; and that by virtue of Circular dated 5-10-2009 issued by Federal Board, selection of case for tax audit for multiple tax years was illegal---Validity---After substitution of S. 177 of Income Tax Ordinance, 2001 by Finance Act, 2010, Commissioner ceased to have power to select case for tax audit, rather same vested in Board exercisable through random computer ballot or on parametric basis---Impugned notice could be issued within financial year in which return was filed, but not thereafter---Board through said Circular (dated 15-10-2009) had deprecated practice of selecting cases for past tax years---Such instructions of Board were binding on Commissioner---Principles---High Court accepted constitutional petition in circumstances. Messrs Chenone, Stores Ltd. v. Federal Board of Revenue 2012 PTD 1815 ref. Utman Ghee Industries v. Commissioner of Income Tax 2002 PTD 63 and Chairman FBR and others v. Idrees Traders and others 2012 SCMR 597 = 2012 PTD 693 rel. JUDGMENT MIAN FASIH-UL-MULK, J.---Messrs Northern Bottling Company (Private Limited) Industrial Estate Jamrud Road, Peshawar through its Secretary has filed instant writ petition against letter No.245 dated 28-2-2011 of the Commissioner Inland Revenue (Audit-II) Regional Tax Office, Peshawar, informing him to submit documents/ information under section 177(1) of the Income Tax Ordinance, 2001 (hereinafter called the Ordinance) to the ACIR IX Audit Division-II, who will be conducting audit of his Income Tax affairs under…

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