Law: Income Tax Ordinance, 2001

Section: 120,122(1),122(4),122(5),122(5A),122(6), 122(8),122(9),131,177,214C

Per Ch. Shahid Iqbal Dhillon, Judicial Member; Muhammad Raza Baqir, Accountant Member, dissenting (a) Income Tax Ordinance (XLIX of 2001)- -Ss. 120, 122(1), 122(4), 122(5), 122(5-A), 122(6), 122(8), 122(9), 131, 177 214-C Amendment of assessment-Taxpayer was selected for audit in terms of S. 214-C of Income Tax Ordinance, 2001; subsequently, show-cause notice was issued to the taxpayer wherein he was confronted with certain discrepancies; which later on were added to the income of the taxpayer through amended assessment-Said order of Assessing Authority was assailed by the taxpayer on the ground that procedure laid down in S.177 of Income Tax Ordinance, 2001 for conducting the audit had not been followed even from the initiation of proceedings as the taxpayer was not communicated the reason before requisition of record for the purpose of audit, which was mandatory provision of S.177 of Income Tax Ordinance, 2001-Validity-Section 177 of Income Tax Ordinance, 2001, did not in itself provide any power to modify assessment, or redetermine the income of taxpayer-Point which was to be kept in mind was that it was not the return of income which was being processed by Adjudicating Authority during audit; authority actually was to decide a deemed assessment, which by process of law had acquired a sanctity-Finalized assessment, could not be modified or disturbed in continuation of the proceedings of audit under S.177 of Income Tax Ordinance, 2001-Selection of audit, even conducting of audit, would not mean or include as assessment or amended assessment alteration or modification of assessment-No 'definite information' was found to have been available within the meaning of S. 122(5) read with S. 122(8) of Income Tax Ordinance, 2001-Appeal of the taxpayer was allowed and order in appeal as well as order-in-original, amendment order under S. 122(1), 122(5) of the Income Tax Ordinance, 2001 were annulled, in circumstances. Minority view Chenone Stores Ltd. v. The Federation of Pakistan 2012 PTD 1815; 2007 PTD 2601; 2011 PTD (Trib.) 321; 2010 PTD 1506; 2001 SCMR 838; 1993 PTD 756 and 2013 PTD 884 ref. Per Muhammad Raza Baqir, Accountant Member disagreeing with Ch. Shahid…