Law: Income Tax Ordinance, 2001

Section: 18(1)(d),21(l),111,111(1)(b),122(1),122( 5),122(5)(i),122(5)(ii),122(5)(iii),122( 9),174(2),177,177(6)

Law: Income Tax Rules, 2002

Section: 68,231F

INCOME TAX ORDINANCE, 2001 (XLIX OF 2001)---Sections: 18(1)(d), 21(l), 111, 111(1)(b), 122(1)(5), 122(5)(i)(ii)(iii), 174(2), 177 177(6) - Income Tax Rules, 2002, Rule 68 231F - Amendment of assessments - Taxpayer is involved in the manufacturing and marketing of textile yarn - Selected for audit - Additions made and demand created by DCIR - Impugned order confirmed by the ACIR - Validity - The contention of the appellant is that DCIR had no jurisdiction to pass order in terms of section 122(5)(i)(ii)(iii) and could not also make additions u/s 125(5) 111 without issuing specific notices - Scope - FACTS Brief facts of the case as gathered from the record are that the taxpayer is an unlisted public company which is involved in the manufacturing marketing of textile yarn. The was selected for audit under section 177 of Income Tax Ordinance, 2001 by the Commissioner Inland Revenue, Hyderabad for the tax year 2010. Therefore, the audit proceedings were initiated. The Deputy Commissioner Inland Revenue, Hyderabad passed order under section 122(1)(5) of the Income Tax Ordinance, 2001 and created demand of Rs.21,387,431. Being aggrieved and dissatisfied with the treatment meted out by the DCIR, taxpayer Hied appeal before the first Appellate Authority/ CIR(A). who vide his impugned order confirmed the action of the DCIR. Again feeling aggrieved and dissatisfied with the order of the learned CIR(A) now the Appellant/Taxpayer has filed appeal before this forum.� A.R. ARGUMENTS: At the very outset, the learned AR first argued the ease on the points of law which are summarized as under: PRELIMINARY LEGAL AND JURISDICTIONAL OBJECTIONS: > After concluding the audit proceedings no notice under section 177(6) of Income Tax Ordinance > No notice under section 122(1)(5) was issued specifying the clauses which were applicable as such the jurisdiction was not assumed in accordance with law. > Notices under rule 68 was not issued requiring the books of accounts and other relevant documents > No specific/independent notice u/s 111 was issued for making the addition under section 111 rendering the addition liable to be deleted. The learned AR argued that the Assessing…