Law: Income Tax Ordinance, 2001

Section: 122,177,177(1),177(1)(a)(d),177(2),172(4 ),214C

Law: Federal Excise Act, 2005

Section: 45,46

Law: Sales Tax Act, 1990

Section: 25,25(2)

Sections: 122, 177, 177(1), 177(1)(a)(d), 177(2), 177(4) 214(C) - Audit - Selection of case for audit by the Commissioner - Discretionary powers of Commissioner - Record or documents not requisitioned nor reasons of selection for audit communicated to taxpayer before selecting case for audit - Notice issued validity - Constitutional petition - FACTS The notice issued under section 177 of the Income Tax Ordinance, 2001 (the Ordinance) for selecting the case of the petitioners for audit has been called into question in this writ petition and in the connected petitions mentioned in �Schedule A� attached with this . It is the case of the petitioners that the Commissioner Inland Revenue (the Commissioner) before selecting the case for audit is required to call for record or documents from the taxpayer and to communicate to him the reasons for doing so. ARGUMENTS To support their case, the petitioners place reliance on the proviso to section 177. The petitioners also plead that the discretionary power vesting in the Commissioner is unbridled and is required to be structured. The respondents plead that the text of section 177 does not support the case of the petitioners and that the notice simpliciter cannot be impugned in the constitutional jurisdiction of this Court. The petitioners contend that the proviso to sub-section (1) qualifies the power of the Commissioner to select the case of a taxpayer for audit by postponing and deferring it after the supply of the requisitioned record for which reasons are to be recorded and communicated to the taxpayer. Mr. Mansoor Awan, Advocate contended that the proviso shall apply to the entire main provision contained in section 177(1) and, therefore, unless the record is summoned along with communication of reasons the Commissioner cannot exercise the power for selection for audit. Some of the learned counsel also placed reliance on sub-section (2) of section 177 to contend that it is only after obtaining the record that audit could proceed. It was also argued that unbridled discretionary� powers cannot be given to the Commissioner to call for the record from the taxpayer and that the discretion vesting in him must be…

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