Law: Income Tax Ordinance, 2001

Section: 122(1), 111(1), 177(10), 177, 122, 111, 214D,177(6)

APPELLATE TRIBUNAL INLAND REVENUE, LAHORE BENCH, LAHORE SUMMARY; Core point The Appellate Tribunal Inland Revenue (ATIR), Lahore, annulled both the assessing officer's amendment order dated 31.12.2020 and the CIR (Appeals) order dated 16.09.2021 because the officer had no lawful jurisdiction to amend an assessment that had already been amended under section 122(5A). The taxpayer's appeal for tax year 2016 was therefore allowed on jurisdictional/legal grounds, without deciding the merits of the disputed additions. What happened The taxpayer, an automotive-parts manufacturer, filed its tax year 2016 return declaring income of Rs. 30,962,756, treated as a deemed assessment under section 120(1). The case was selected for audit under section 214D; after audit proceedings, the officer passed an amendment order under section 122(1) on 31.12.2020, adding approximately Rs. 372.56 million and determining income of Rs. 403.52 million. The CIR (Appeals) confirmed nearly all additions, deleting only the provident-fund addition of Rs. 5,747,031 and an exchange-loss addition. The taxpayer then appealed to ATIR. Why the Tribunal allowed the appeal   Issue Tribunal's finding Jurisdiction to amend The deemed assessment under section 120(1) had already been amended on 19.07.2017 under section 122(5A). Once amended, it merged into the amended assessment; therefore, the officer could not again amend the original deemed assessment under section 122(1). Correct legal route An already amended assessment can be further amended only under section 122(4), not section 122(1). "Definite information" requirement Section 122(5) requires definite information of escaped income, under-assessment, excessive relief/refund, or misclassification before amendment. The Tribunal held that the officer neither properly conducted the audit nor acquired such definite information. Non-production of record If the taxpayer genuinely failed to produce books/records, the legally required course was a best-judgment assessment under section 121(1)(d) read with section 177(10), not an amendment under section 122(1). Key legal principle A section 120(1) deemed assessment loses its…