Law: Income Tax Ordinance, 2001

Section: 177,177(4)

Law: Constitution of Pakistan, 1973

Section: 199

Income Tax Ordinance (XLIX of 2001)---S. 177(4)--CBR Circular No.1 of 2004 dated 24-7-2004---Constitution of Pakistan (1973), Art.199---Constitutional petition---Universal Self-Assessment Scheme---Assessee had filed its return of income under Universal Self-assessment Scheme and had paid tax due---Department selected the case of assessee for audit in terms of S.177(4) of Income Tax Ordinance, 2001 and issued notice---Assessee, in terms of CBR Circular No.1 of 2004 dated 24-7-2004 had revised its income tax return by increasing 20% higher tax as compared to the tax payable on the original return but the department, instead of accepting the revised return of assesses, selected the case for audit under S.177(4) of the Income Tax Ordinance, 2001---Contention of the assessee was that the assessee having complied with the terms of CBR Circular No. 1 of 2004, department was bound to accept the revised return---Validity---Held, department having failed to rebut the contentions raised by the assessee, constitutional petition of the assessee was to be allowed by High Court and thus notice in question was declared to be illegal, unlawful and without lawful authority. Commissioner of Income Tax and others v. Fatima Sharif Textile, Kasur and others (2006) 94 Tax 317 and Messrs Iftikhar Brothers, Civil Quarters Road, Sheikhupura v. Central Board of Revenue through Chairman, Islamabad and another 2006 PTD 2452 ref. ORDER ALI AKBAR QURESHI, J.---Through this Constitutional petition, the petitioner has challenged the validity of a notice bearing No.C.I.T/Audit-II/242 Annexure-B whereby the Return for the Tax year 2003 declaring income at Rs.1,65,000 has been selected for audit. It is stated in the petition that the petitioner filed its Income Return for the year 2003 declaring Income at Rs.1,65,000 under Universal Self Assessment Scheme and due tax was paid. The respondent No.2 without any cause and reason selected the case of the petitioner for audit in terms of section 177(4) of the Income Tax Ordinance 2001 and issued the notice, impugned herein. The respondent on 24-7-2004 issued a circular whereby the Federal Board of Revenue to facilitate the non-Cooperate Tax Payer and…

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