Law: Income Tax Ordinance, 2001

Section: 111,111(1)(b),111(1)(d),122(1),122(5A),1 22(9),177

NOTES:Unexplained income or assets---Addition---Scope---Non issuance of separate notice under S.111 of the Income Tax Ordinance, 2001 and failure to confront the taxpayer with the proposed addition in order to require him to explain his position before making addition in his income is unlawful.C.I.R. Faisalabad v. Faqir Hussain and others 2019 PTD 1828 rel.ORDER In this Reference Application under Section 133 of the Income Tax Ordinance, 2001 (Ordinance of 2001) inter alia, following question of law is proposed for our opinion: - Whether on the facts and circumstances of the case, the Appellate Tribunal has not erred in law to delete the additions made under Sections 111(1)(b) and 111(1)(d) of the Ordinance, 2001 and to vacate the orders of authorities below? 2. The brief facts of the case are that the respondent-taxpayer derives income from real estate business and he declared income for the year as follows:  NarrationIncome in PkrIncome as declared349,500Property income as declared84,000The case of the taxpayer was selected for audit under Section 177 of the Ordinance, 2001 by the Director Intelligence and Investigation (I I), Multan which thereafter was amended under Section 122(1) of the Ordinance as follows:  NarrationIncome in PkrIncome as declared349,500Property income as declared84,000Addition under section 111(1)(d) on account of credit entries in Bank.42,590,522Addition under section 111(1)(d)23,000,000Amended income66,024,0223. In appeal, the present applicant (Commissioner Inland Revenue (Appeals) upheld the addition under Section 111(1)(d) of Ordinance, 2001 amounting to Rs.42,590,522/- and remanded the matter of addition under Section 111(1)(b) of Ordinance, 2001 with certain directions for the reasons and factors as embodied in order dated 03.12.2018, which order was challenged through appeal by the respondent-taxpayer before the learned Appellate Tribunal Inland Revenue, Lahore Bench, Lahore ATIR which was allowed in his favour vide order dated 22.5.2019; against which, the applicant-department filed the instant Reference Application before this Court. 4. The learned counsel for applicant states that the…

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