Law: Income Tax Ordinance, 2001

Section: 111(1)(c),120,121,121(1)(d),122,214C

ORDER This appeal has been filed by the taxpayer, who derives income from bricks. As per facts return for the year under appeal was filed under USAS declaring income of Rs. 450,000/-. This case was subsequently selected for audit by FBR through computer random ballot in terms of section 214C of the Income Tax Ordinance, 2001. Proceedings for assessment were initiated. A number of notices and letters were issued for the purpose of obtaining necessary details. Most of the details and supporting documents were filed by the taxpayer. However, at the concluding stage of proceedings nobody turned up before the assessing officer who had required the taxpayer to provide a certain details. The assessing officer accordingly framed assessment u/s 121(1)(d) of the Income Tax Ordinance, 2001. The department did not find the case in order since reply of the appellant to the issues confronted was not found to satisfactory and assessed income by estimating sales at Rs. 10,000,000/- applying GP rate @ 33.33 % making addition out of P & L account expenses at Rs. 81,993/- and addition u/s 111(1)(c) of the Ordinance at Rs. 174,000/- besides charging WWF at Rs.65,114/-. The taxpayer filed appeal against this assessment, contesting the legality of assessment u/s 121(1)(d) of the Ordinance. Learned CIR(A) Islamabad vide his impugned order No. 429/2015 dated 26.11.2015 upheld the treatment meted out by the assessing officer. The taxpayer being aggrieved filed 2nd appeal before this forum on the grounds enumerated in memo of appeal. At the very outset learner AR stated that the assessment order was passed u/s 121(1)(d) which is illegal and void. He vehemently submitted that once the deemed assessment is made under Section 120, the assessee cannot be assessed again under Section 121(1)(d) as it will lead to two different assessments of the assessee. Learned counsel submitted that Section 121(1)(d) does not provide that deemed assessment order under Section 120 stands nullified or cancelled by virtue of making a fresh assessment of the taxable income of the assessee under Section 121(1)(d). He argued that the only manner in which a deemed assessment order can be amended is provided…

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