Law: Income Tax Ordinance, 2001

Section: 121(1)(d),177,177(10)

ORDER QAMAR-UL-HAQ BHATTI (JUDICIAL MEMBER): Vide this appeal, the taxpayer-appellant has assailed the order No.46 passed by the learned Commissioner Inland Revenue (Appeals-II), Lahore dated 17.03.2015 in respect of tax year 2011 on the following grounds: 1) That, since the selection of the case for audit made u/s 177 was without lawful jurisdiction, the impugned order passed was also illegal and unlawful. 2) That, the ex-parte order passed by the assessing officer u/s 121(1)(d) dated 29-12-2014 for which neither any notice was issued nor served was patently illegal and unlawful. 3) That, when the show cause notice was admittedly complied with by the assessing officer there was no justification available with the assessing officer to proceed ex-parte. 4) That, the order passed without considering the reply of the assessee admittedly filed on 14-11-2014 was the worst example of high handedness and misapplication of law. 5) That, the revenue receipts estimated at Rs.1,08,86,354/- against declared receipts at Rs.54,43,177/- are without lawful jurisdiction and against the scheme of new Income Tax law. 6) That, the expenses allowed at Rs.25,00,000/- on adhoc basis against claim of Rs.75,78,596/- are against the principles laid down by the higher judicial forums. 2. Both the learned representatives appearing at the bar have been heard and the relevant available record perused. 3. Facts giving rise to the instant appeal are that the taxpayer- appellant, an AOP, derives income from maintenance and repair of Motor Vehicles filed its income tax return for the tax year 2011 declaring income at Rs.1,304,235/- which was deemed to be an assessment order in terms of section 120(1) of the Income Tax Ordinance, 2001. Later on, the case was selected for audit under section 177 of the Ordinance, 2001 and in this regard intimation was sent to the taxpayer by the learned Commissioner Inland Revenue. During the course of audit proceedings, books of account coupled with allied documents, were requisitioned and on examination thereof, certain issues/discrepancies were observed which were also confronted to the taxpayer/appellant through show cause notice issued u/s 121(1 )(d) read…

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