Law: Income Tax Ordinance, 2001

Section: 120,121(1)(d),172(4),174(2),177(10),214( C)

Law: Constitution of Pakistan, 1973

Section: 10A

ORDER M. M. AKRAM (Judicial Member): The titled appeal has been filed by the appellant/taxpayer against an order No.1336/2018 dated 19.04.2018 passed by the learned Commissioner Inland Revenue (Appeals-III), Rawalpindi for the Tax Year 2014 on the grounds as set forth in the memo of appeal. 2. Briefly stated, the relevant facts for disposal of appeal are that the appellant is an individual and derives income from sale of petroleum products under the name and style of M/s Mirjal Petroleum, Attock. The appellant filed his income tax return declaring incomes under three heads i.e. business income at Rs. 212,772/-, property income at Rs.158,840/- and agricultural income at Rs.180,000/-. The return so filed by the appellant by fiction of law deemed to be considered as assessment order under section 120 of the Income Tax Ordinance, 2001 (the Ordinance). The case of the appellant was selected for audit under section 214C of the Ordinance by the Federal Board of Revenue. In consequence thereof, the audit proceedings were initiated by the concerned Assessing Officer and reminders notices were also issued from time to time but the appellant did not comply with theses notices. Accordingly, there was no option with the Assessing Officer to issue a show cause notice under section 121(1)(d) of the Ordinance whereby the appellant was confronted with the intention to disallow the purchases under section 174(2) of the Ordinance to the tune of Rs.5,262,126/- against declared at Rs.26,321,628/- and with total disallowances under profit and loss expenses amounting to Rs.222,259/-. On the due date, the taxpayer himself attended the office and contended that during the year under consideration the company blocked his supply due to low sales as such the petroleum products were purchased from various petrol pumps. He was asked to produce proof of purchases and on his request the case was adjourned to 26-02-2018. On the due date, neither the taxpayer appeared, nor filed any application for adjournment. Since the taxpayer has failed to file any documents in support of his version, the Assessing Officer ultimately framed the best judgment assessment in the light of the provisions of…

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