Law: Income Tax Ordinance, 2001

Section: 122,122(1),122(4),122(5),133

Income Tax Ordinance (XLIX of 2001)----Ss.122, 133--Audit, selection for--Definite information--Pre-condition--Case of respondent/taxpayer was selected for audit by Commissioner Inland Revenue--Validity--Adjudicating authority i.e. Commissioner Inland Revenue in violation to legal provision as it stood then on 01-07-2009 selected case of respondent / taxpayer for audit taxpayer and subsequently under S. 122(1), (5) of Income Tax Ordinance, 2001 created an additional tax liability--In order to initiate such like proceedings “definite information” was required--Merely on the basis of presumptions and assumptions proposed income was supposed which was against the mandate of S. 122(5) of Income Tax Ordinance, 2001--Without any definite information within the scope of S. 122(5) of Income Tax Ordinance, 2001 proceedings were initiated and merely on the basis of assumptions the liability was created--High Court declined to interfere in the matter as Appellate Authority and Appellate Tribunal Inland Revenue rightly recorded findings against the decision of adjudicating authority--Reference was dismissed in circumstances. Messrs Chenone Stores Ltd. v. Federal Board of Revenue 2012 PTD 1815; Shahnawaz’s case 2011 PTD 1558 and CIR v. Khan CNG and Filling Station 2013 PTD 884 rel. JUDGMENT: MUHAMMAD AAMIR NAWAZ RANA, JUSTICE:---.--- Through this Income Tax Reference, following questions of law have been brought before this Court by the Commissioner Inland Revenue Zone-I, Regional Tax Office, Quetta (applicant): Questions of law: (1) Whether on the facts and circumstances of the case, the Learned Appellate Tribunal Inland Revenue was justified in holding that the CIR did not have the jurisdiction to select the case for audit under section 177(2) in view of the amendment made in Finance (Amendment) Ordinance 2009 dated 28-10-2009. (2) Whether on the facts and circumstances of the case, the Learned Appellate Tribunal Inland Revenue was justified in holding that the CIR/DCIR may amend the assessment under section 122(1), (4)/(5) after fulfilling the requirement of law, subject to definite information within the meaning of section 155(5) read with 122(8) of the Income Tax…

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