Law: Income Tax Ordinance, 2001

Section: 111,111(1),122,122(1),122(5),122(5)(ii), 122(9),133(1),

JUDGMENT: MUHAMMAD SAJID MEHMOOD SETHI, JUSTICE:---.--- This consolidated judgment shall decide instant Reference Application, along with connected Reference Applications i.e. I.T.R No.6141, 25832 , 28864 of 2022, I.T.R Nos.22372, 56087, 57714, 57717, 59532, 59533, 60628, 61406, 61934, 66542, 67607, 69139, 72983 , 72984 of 2021, 118 of 2014, 160 of 2011, PTR No.323 of 2013 and I.C.A Nos.18875 , 18877 of 2022, as common questions of law and facts are involved in these cases. 2. Through these Reference Applications under section 133(1) of the Income Tax Ordinance, 2001 (“the Ordinance of 2001”), following questions of law, asserted to have arisen out of impugned orders passed by learned Appellate Tribunal Inland Revenue, Lahore Bench, Lahore (“Appellate Tribunal”), in instant and connected Reference Applications, have been proposed for our opinion:- 1. Whether the learned Appellate Tribunal has erred in law by deleting the additions made under Section 111 of the Ordinance while holding that a separate and specific notice is required for addition under Section 111 when there is no specific provision in the Ordinance requiring separate notice under Section 111 of the Ordinance? 2. Whether learned Appellate Tribunal IR has overlooked the scheme of law that Section 111 of the Ordinance cannot be read in isolation without making reference to Section 122(1), 122(5)(ii) and 122(9) of the Ordinance? 3. Whether the learned Appellate Tribunal IR fell in error by failing to appreciate that in view of insertion of the ‘Explanation’ in section 111 of the Income Tax Ordinance, 2001 vide Finance Act, 2021 the issuance of a separate notice under section 111 was not required for amendment of an assessment under section 120 of the Ordinance? The Intra Court Appeals involve legality or otherwise of issuance of notice under Section 111 subsequent to notice issued under Section 122(9) of the Ordinance of 2001. 3. Learned Legal Advisors for applicant-department submit that learned Appellate Tribunal was not justified to annul the additions made by learned fora below on the ground of non-issuance of separate notice under Section 111 of the Ordinance of 2001 to the taxpayer. They add…

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