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I.T.A. No.524/KB of 2013, decided on 30th May, 2014.

----Ss. 122 & 177---Amendment of assessment---Revenue contended that First Appellate Authority erred in cancelling the order passed under S.122(1) of the Income Tax Ordinance, 2001 on the basis of decision of High Court which had already been rescinded by the Supreme Court and further erred in holding that the selection of case for audit as unconstitutional, illegal and without lawful authority when the Zonal Commissioner Inland Revenue had the inherent powers under S.177 of the Income Tax Ordinance, 2001 to proceed the case for audit as had been held by the High Court---Validity---First Appellate Authority had discussed the matter at length regarding the selection of case for audit under S.177 of the Income Tax Ordinance, 2001 in view of directions given in the judgment of High Court---Order of First Appellate Authority was upheld by the Appellate Tribunal and appeal filed by the department was dismissed. Writ Petition No.393 of 2012; Civil Appeals Nos.1032 to 1082 of 2012 and Writ Petition No.4203 of 2013 ref. 2012 PTD 1815 and 2013 PTD 1552 rel. Muhammad Umar Farooq for Applicant. Muhammad Mehtab Khan for Respondents. Date of hearing: 30th May, 2014.

This Income tax Appeal has been filed by the appellant department against the order No. 07/A-IV, dated 20-2-2013, passed by CIR(Appeals-IV), Karachi, The, appellant/department has agitated on the following grounds:-- 2. That the learned Commissioner Inland Revenue (Appeals-IV) has erred in cancelling the order passed under section 122(1) on the basis of the decision in Writ Petition No. 393 of 2012 passed by the Honorable Lahore High Court whereas the said decision has already been rescinded by the Honorable Supreme Court of Pakistan vide Civil Appeals Nos. 1032 to 1082 of 2012 (and in others/ dated 3-1-2013. 3. That the learned Commissioner Inland Revenue (Appeals-IV) Karachi has erred in holding that the selection of case for audit as unconstitutional, illegal and without lawfull authority when the Zonal Commissioner Inland Revenue has the inherent powers under section 177 of the Income Tax Ordinance, 2001 to process the case for audit as has been held in a decision of Honourable High Court Multan Bench in Writ Petition No. 4203/2013 dated 9-4-2012." 2. Mr. Muhammad Umar Farooq D/R appeared on behalf of the appellant/department while Mr. Muhammad Mehtab Khan, Advocate represented the Respondent taxpayer. 3. During the course of hearing, the learned DR argued that the learned Commissioner Inland. Revenue (Appeals-IV) has erred in cancelling the order passed under section 122(1) on the basis of the decision in Writ Petition No. 393 of 2012 passed by the Honorable Lahore High Court whereas the said decision has already been rescinded by the Honorable Supreme Court of Pakistan vide Civil Appeals Nos.1032 to 1082 of 2012 (and in others) dated 3-1-2013. The further argued that the learned Commissioner Inland Revenue (Appeals-IV) Karachi has erred in holding that the selection of case for audit as unconstitutional, illegal and without law full authority when the Zonal Commissioner Inland Revenue has the inherent powers under section 177 of the Income Tax Ordinance, 2001 to process the case for audit as has been held in a decision of Honourable High Court Multan Bench in Writ Petition No. 42031 of 2013 dated 9-4-2012. 4. On the other hand, Mr. Muhammad Mehtab Khan, Advocate representing the Respondent taxpayer vehemently opposed the contention made by the learned DR. He argued that the order passed by the learned CIR(A) is well within the framework of law and there is no illegality, regularity and infirmity in the same. 5. I have heard the learned representatives from both sides and perused the impugned order of learned CIR(A), order of OIR and available record of the case. The AR of the respondent relied upon the judgments vide 2012 PTD 1815 (Lah. H.C.) and 2013 PTD 1552 (Pesh. H.C.) which clearly support the taxpayer, I am of the considered view that the learned CIR(A) has discussed the mutter at length regarding the selection of case for audit under section 177 of the Income Tax Ordinance, 2001 in view of directions in judgment of Lahore High Court, therefore, I find no interference with the impugned order of the learned CIR(A) which is upheld, hence the appeal filed by the department is dismissed. 6. The appeal is disposed of in the manner as indicated above. CMA/114/Trib. Appeal dismissed.

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