Law: Income Tax Ordinance, 2001

Section: 120,121(1)(d),122(2),177(10)

(a) Income Tax Ordinance (XLIX of 2001)---Ss. 120, 121(1)(d) ,  122(2) [as they existed prior to the amendments made by Finance Act, 2010]---Best assessment order under section 121(1)(d) of the Income Tax Ordinance, 2001 (‘the Ordinance’)---Such order cannot be made in cases where deemed assessment order has already been made under section 120 of the Ordinance---In the present case respondent-tax payer had submitted its income tax returns for the Tax Years 2005 and 2006; these returns were deemed to have been accepted under section 120 of the Ordinance and, therefore, section 121 of the Ordinance would not apply---Another additional ground prevented action to be taken against the respondent, which was the ‘five years’ limitation period provided in section 122(2) of the Ordinance, and since five years had expired action could not be initiated had also written to the Deputy Commissioner, Inland Revenue, to identify the ‘specific year’ but he did not respond to such legitimate query---Instead the Deputy Commissioner, Inland Revenue elected to proceed unilaterally and did so without providing an opportunity of a hearing to the respondent, which was yet another transgression of the law---Petitions for leave to appeal were dismissed and leave was refused. Commissioner Inland Revenue, Zone-III, RTO Rawalpindi v. Abdullah Khan (Civil Petitions Nos. 526 and 19 other petitions of 2013) ref. (b) Income Tax Ordinance (XLIX of 2001)--- ----S. 177(10)---Audit---Best assessment---Section 177(10) of the Income Tax Ordinance, 2001---Said section could not be given retrospective effect. ORDER: QAZI FAEZ ISA, JUSTICE:---.--- To understand the controversy and how it commenced it would be appropriate to reproduce the following from order dated 19 February 2011 of the Deputy Commissioner of Inland Revenue: ‘Intimation regarding selection of case was sent to taxpayer vide letter No. LTU/DC.(A) 06/1902 dated 08.10.2010. In response to said letter taxpayer through its AR contended that since multiple years have been selected for audit, therefore specific year should be mentioned for which compliance could be made.’ The said order of the Deputy Commissioner was assailed before the…

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