Law: Income Tax Ordinance, 2001

Section: 120,120(1A),122,177,177(1),177(2),214C

Law: Civil Procedure Code (V of 1908)

Section: OrderXXXIX,Rules1,Rule2

Income Tax Ordinance (XLIX of 2001)- -Ss. 177, 214C & 120-Audit-Nature-Selection for audit-Scope- Audit in itself was not an adverse action and / or order; particularly in a system where tax return was filed by taxpayer under self-assessment, which was to be treated as an assessment order of the Commissioner under S.120 of the Income Tax Ordinance, 2001-Conduct of audit was not even an inconvenience if taxpayer fulfilled its statutory duty by maintaining record under the Income Tax Ordinance, 2001. Civil Appeal No. 1171 of 2013; Messrs Pfizer Pakistan Ltd. Through Company Secretary and others v. Deputy Commissioner and others PLD 2016 PTD 1429 and Pakistan Telecommunication Company Ltd. v. Federation of Pakistan 2016 PTD 1484 rel. THIS ORDER PASSED BY: MUHAMMAD JUNAID GHAFFAR, JUSTICE:---.--- This is an application under Order XXXIX, Rules 1 and 2, C.P.C., whereby, the Plaintiff seeks a restraining order against the Defendants from taking any adverse action against it pursuant to impugned Notices. Learned Counsel for the Plaintiff has contended that through impugned Notices at Page-35 onwards the Department intends to audit Income Tax Returns of the Plaintiff under Section 177(1) of the Income Tax Ordinance, 2001 and has called for various records and documents for which the department has not authority or jurisdiction. Per learned Counsel the Plaintiff is a Company based in and an operated from Netherlands and as per Article 7 of the Treaty between Netherlands and Pakistan, the Plaintiff is not liable to pay any tax in Pakistan, and therefore, no audit can be conducted by the department. As to objection raised by the office in respect of deposit of 50% of the disputed amount with the department as directed by the Hon'ble Supreme Court vide Judgment dated 27.06.2018 passed in Civil Appeal No. 1171/2013, learned Counsel submits that the ratio of the said judgment is not applicable in the instant matter as there is no demand or assessment so far made by the department. On the other hand, learned Counsel for the department submits that mere notices have been impugned and restraining order has been obtained, whereas, if the Plaintiff is exempted as claimed on…

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