Sources told Business Recorder that the selection of income tax case through computer ballot has been stayed by the LHC. The LHC has directed the department to submit comments on the case. The petitioner argued that the case has been selected for audit through computer-based balloting by the FBR.
The FBR has not mentioned the section of the Income Tax Ordinance under which the selection has been made. The FBR has also not disclosed the reasons for selection of the case for audit. Further more, the computer based balloting has no legal support.
There is only one section ie, 177 of the Ordinance, 2001, which empowers the income tax authorities to select the case for audit. The section revealed that the Commissioner is the sole authority, which is competent to select the case for audit. Therefore, instant selection made by the FBR is 'coram non judice'.
The petitioner further stated that the selection has been made through computer based balloting which showed that the competent authority has not applied mind while selecting the case for audit, therefore selection is illegal and unlawful. The petitioner is running a CNG station and its income covered under Final Tax Regime (FTR) in terms of section 234A read with 115(4) of the Ordinance, 2001.
Under income tax circular C. No 4(36) ITP/2002,dated 5-10-2009,where in the FBR has notified that FTR cases other than individual shall not be selected for audit and discrepancy, if any found in such cases shall be addressed through amendment of assessment as provided under the income tax law which is binding upon the income tax authorities. The LHC observed that the contentions raised by the petitioner needs consideration. In the meantime, LHC further observed that the department shall not proceed in the matter till finalisation of the decision.