Law:

Section:

YAHYA AFRIDI, J.- M/s Rehman Cotton Mills Ltd, petitioner seeks the constitutional jurisdiction of this Court praying that:- "It is humbly prayed that the impugned notice purportedly issued under section 177 of the Ordinance may graciously be declare illegal, without lawful authority and without jurisdiction." 2. In essence, the grievance of the petitioner is that the audit of the petitioner's company could not be initiated by the worthy Commissioner under section 177 of the Income Tax Ordinance, 2001 ("Ordinance") without the balloting carried out by the Federal Board of Revenue ("FBR") under section 214C of the ibid. The main thrust of the learned counsel for the petitioner's company was the law laid down in decision of Chen One's case (2012 PTD 1815) and the reliance thereon by this Court in its decision in M/s Northern Bottling's case (W.P.No.1232 of 2012) decided on 17.01.2013, wherein this Court had held that:- "From the bare reading of the above noted provision of law as it was at relevant point of time it is to be noted that at original stage the power to select and conduct audit of the lax affairs of any person or class of persons was available with the concerned Commissioner alone. Subsequently, the Board was required to lay down criteria for selection of the cases for audit by the Commissioners and after selection of the case in the light of the criteria issued by the Board the Commissioners were to conduct audit. In addition to selection of the cases for audit in the light of the criteria issued by the Board, the Commissioners were also entitled to select cases in the light of the parameters provided in sub-section (4) of section 177 of the Income Tax Ordinance. 2001. However, even after substitution of section 177 vide Finance Act, 2004 the commissioners again started acting according to their own intents and without waiting for issuance of any criteria by the FBR and without completing the first phase of selection of cases for audit as per criteria to be laid down by the FBR started selecting the cases for audit. The matter was settled by the superior Courts and all actions taken by the commissioners were declared as not in accordance with law.…

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