Law: Income Tax Ordinance, 2001

Section: 21(c),21(m),111,111(1)(a),111(1)(2),122( 1),122(5),122(9),128(5),174(2),176,214C

INCOME TAX ORDINANCE, 2001 (XLIX OF 2001)--Sections: 21(c), 21(m), 111, 111(1)(2), 122(1), 122(5), 122(9), 128(5), 174(2), 214C, 176 - Amendment of assessments - Selection for audit by Board - Unexplained income or assets - Deductions not allowed - Notice to obtain information or evidence - Record - Procedure in appeal - AOP, running hospital - Failure to furnish evidence in support of salaries paid and expenses during audit proceedings - Show cause notice - Additions made by DCIR and passing of order under section 122(1)/122(5) of Ordinance - Deletion of additions by CIR(A) in Appeal - Validity - FACTS Brief facts of the case as gathered from the record are that the taxpayer is an AOP engaged in the business of running a hospital. The return of income was filed declaring income at Rs. 6,912,104 which was selected for audit under section 214C of the Income Tax Ordinance, 2001 by the FBR. Audit proceedings were initiated and an I DR u/s. 176 was issued. In response to which adjournment was sought and extension of time was granted. A show cause notice u/s. 122(9) was issued against the taxpayer who filed the explanation though his counsel and found not plausible by the DCIR and the proceedings culminated in passing the order u/s. 122(1)/(5) of the Income Tax Ordinance, 2001. Being aggrieved and dissatisfied with the treatment meted out by the DCIR, the taxpayer preferred appeal before the learned CIR(A) who vide his impugned order mentioned supra, held that the DCIR had not followed the audit proceedings/procedures as laid down by the Hon'ble Lahore High Court in its reported as (2017) 115 Tax 84 and also on merit deleted the addition u/s. 174(2) made on account of salaries, additions made u/s 21(c) read with section 174(2) on account of expenses and addition made u/s. 111(1)(a) of the Income Tax Ordinance, 2001. Feeling aggrieved and dissatisfied with the impugned order passed by the learned CIR(A) now the department has come up in appeal before this Tribunal. ARGUMENTS During proceedings before this Court, learned D.R. has contended that the Commissioner Inland Revenue (Appeals) was not justified in deleting the additions made u/s 174(2) on account of salaries…

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