Law: Income Tax Ordinance, 2001

Section: 114,120(1),120(1A),122(5),177,177(7),214 C

(A) Income Tax Ordinance, 2001 (XLIX of 2001) Sections: 120(1), 120(1A), 122(5), 177, 177(7) & 214C Assessments - Audit - Power of Commissioner to conduct audit - Selection for audit by Board - Amendment of assessments - Whether Power of Commissioner to conduct audit of any person is dependent upon decision of Board of Revenue or on his own discretion, Commissioner can make such selection - Question of - It is contended by the counsel of petitioners that power of Board to select persons for audit u/s 214C is only mode of selection of persons for audit and that where person specific audit is required to be undertaken, section 122(5) of Ordinance can be invoked and therefore, invoking section 120(1 A) for selecting taxpayer for audit was not justified - Validity - (1) Whether section 120(1A) vests in Commissioner, Power to select person for audit if there exists reasonable ground for doing so irrespective of fact that section 120(1 A) mentions words "conduct audit" and not "to select a person for audit" - Held yes. (2) Whether this power to conduct audit is granted to Commissioner so that where he feels necessary, he can bring any assessment under scrutiny - Held yes. (3) Whether this exercise would be impossible to do so, if such Power is considered to be solely dependent upon selection of person by Board u/s 214C - Held yes. (4) Whether additionally, second proviso to section 177 prohibits Commissioner from conducting audit after expiry of six years, whereas, there is no such prohibition when persons are selected for audit u/s 214C hence limitation contained in second proviso of section 177 is applicable to selection made by Commissioner u/s 120(1 A), but no such limitation is applicable when random selection is made u/s 214C - Held yes. (5) Whether if section 120(1 A) is interpreted in manner that Commissioner is not conferred with power to decide on his own to conduct audit of particular person then it means that audit has to be left to decision of Board of Revenue only u/s 214C - Held yes. (6) Whether power of Board to choose persons for audit is general power which is in addition to power of Commissioner u/s 120(1 A) - Held yes. (7) Whether law…

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