Law: Income Tax Ordinance, 2001

Section: 121(1)(d),177

Income Tax Ordinance (XLIX of 2001)--- ----Ss. 121(1)(d) & 177---Best assessment---Taxpayer, an individual, who derived income from Engineering Work, filed income tax return---Case of taxpayer was selected for audit under S.177 of the Income Tax Ordinance, 2001 and he was required to produce books of account and related documents---Notices issued to the taxpayer having not been complied with, Assessing Officer proceeded to assess income of the taxpayer by disallowing receipts and expenses claimed by the taxpayer---Appeal filed against the order of Assessing Officer, was rejected---Validity---Income assessed by Assessing Officer was not justified, as estimation of receipts was not based on any information or material---Assessing Officer, after estimating his own receipts against the declared by the taxpayer, had added the expenses claimed without first deducting the same, which reflected the non-application of mind---Impugned order passed by Assessing Officer could not be held to be a best assessment---Both orders, passed by Assessing Officer as well as of the appellate authority, were vacated---Appeal of taxpayer succeeded, in circumstances. 2012 PTD 1815 and 2013 PTD 1552 ref. THIS ORDER PASSED BY: MUHAMMAD RIAZ, ACCOUNTANT MEMBER.--- This second appeal isdirected against the order dated 29-04-2013 of Commissioner Inland Revenue (Appeals-III), Islamabad passed in 1st appeal filed by the taxpayer against the amended assessment order passed by the Assistant Commissioner Inland Revenue(ACIR), Audit-I, Zone-II, RTO, Rawalpindi under section 121(1)(d) of the Income Tax Ordinance, 2001. 2. Brief facts of the case are that the taxpayer an individual derived income from Engineering Works. Return of income for the year under consideration was filed declaring net income at Rs.125,000/-. The case of the taxpayer was selected for Audit under section 177 of the Ordinance and he was required to produce books of accounts and related documents. As per impugned order all the notices went un-complied with. The officer therefore, proceeded to assess income of the taxpayer by disallowing receipts at Rs.950,000/- and the expenses claimed in the P&L account at Rs.52,00/-.…

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