Law: Income Tax Ordinance, 2001

Section: 114,120,177,177(1)

Income Tax Ordinance (XLIX of 2001)----S.177---Audit---Essential requisites of exercise of powers under S.177, Income Tax Ordinance, 2001---Notice which failed to disclose any reason for conducting audit of the assessee's return was illegal and void---Department was at liberty to undertake audit of the assessee by taking essential legal steps strictly in accordance with law. Ch. Muhammad Hussain v. Commissioner of Income Tax, Sialkot 2005 PTD 152 fol. JUDGMENT UMAR ATA BANDIAL, J.---This petition challenges notice, dated 27-5-2004 issued by the respondent No.2 informing the petitioner that its income tax return for the tax year 2003 under the Universal Self-Assessment Scheme has been selected for audit under section 177 of the Income Tax Ordinance, 2001 ("Ordinance"). Thereafter the respondent No.3 by notice, dated 16-6-2004 has required the petitioner to attend his office with complete tax account and supporting details/documents for completion of audit of the petitioner's return for the tax year 2003. 2. The learned counsel for the petitioner contended that the question whether audit can be initiated by the respondents under section 177 of the Ordinance without disclosure of grounds has been answered in the negative by a detailed judgment of this Court given in the case of Ch. Muhammad Hussain v. Commissioner of Income Tax, Sialkot 2005 PTD 152 wherein similar impugned action was declared illegal. The petition was admitted to regular hearing by order dated 22-12-2004 on the strength of the aforesaid judgment. The respondents were directed to file their written statement within four weeks. The case has been fixed for hearing today when the duly appointed counsel for the respondents has not entered appearance. However, Mr. Ilyas Khan, the learned Senior Legal Advisor of the respondent-Department was present in Court and rendered assistance on the legal issue raised in the petition. He accepts that the impugned single line order for audit,…

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