Law: Income Tax Ordinance, 2001

Section: 121(1)(d),177,177(7)

Law: Constitution of Pakistan, 1973

Section: 19A

Law: General Clauses Act, 1897

Section: 24A

JUDGMENT Petitioner has challenged notice dated 02.08.2017 (Annex-I) issued under Section 121(1)(d) read with Section 177 of the Income Tax Ordinance, 2001 ("Ordinance of 2001") proposing an exparte assessment order on alleged default of petitioner to provide documents to conduct audit for tax year 2015. 2. Learned counsel for the petitioner submits that earlier a show cause notice dated 16.06.2017 was issued, in response to which, reply was filed electronically on 24.06.2017. It is contended that petitioner was selected for audit for tax year 2014, and audit was completed, however, the petitioner is again selected for audit for tax year 2015. It is argued that successive selection for tax year 2015 is against the law laid down by this Court in Defence Housing Authority v. Commissioner Inland Revenue etc. (2015 PTD 2538) and Nestle Pakistan Limited etc. v. The Federal Board of Revenue, etc. (2017 PTD 686). It is contended that judgment in Nestle case has been upheld by learned Division Bench of this Court, therefore, petitioner's selection for successive year i.e. 2015, without giving any reason is illegal. Adds that respondents are expected to proceed against the petitioner without attending to legal objections raised in the above noted application and another application dated 23.04.2017. 3. Heard at preliminary stage, record perused. 4. The judgments in the DHA and Nestle cases, supra, were given by interpreting subsection (7) of Section 177 of Ordinance of 2001, and corresponding provision is other Federal Taxing Statue, which requires the Audit Officer/Commissioner to give reasons while selecting a person for audit again in the next and following year. The subsection is reproduced hereunder:- (7) The fact that a person has been audited in a year shall not preclude the person from being audited again in the next and following years where there are reasonable grounds for such audits. The judgment in ICA No.338 of 2017, delivered by learned Division Bench of this Court is examined. While deciding appeals against the judgment in Nestle case. the judgment has been modified expressly regarding cut off date to compete audit. A direction is given to FBR for…

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