Amending Assessment Order as a Result of Audit under Section 177 of Income Tax Ordinance 2001

This Blog is written by Mr. Muhammad Nabeel Ahmed Ch, Senior Associate Taxation and Corporate Services. Please read this interesting blog and provide your valued comments.

Amending Assessment Order as a Result of Audit under Section 177 of Income Tax Ordinance 2001

The Commissioner may call for any record or documents including books of accounts maintained under this Ordinance or any there law for the time being in force for conducting audit of the income tax affairs of the person and where such record or documents have been kept on electronic data, the person shall allow access to the Commissioner or the officer authorized by the Commissioner for use of machine and software on which such data is kept and the Commissioner or the officer may have access to the required information and data and duly attested hard copies of such information or data for the purpose of investigation and proceedings under this Ordinance in respect of such person or any other person:

Provided that

  • the Commissioner may, after recording reasons in writing call for record or documents including books of accounts of the taxpayer; and
  • the reasons shall be communicated to the taxpayer while calling record or documents including books of accounts of the taxpayer:

“Provided further that the Commissioner shall not call for record or documents of the taxpayer after expiry of six years from the end of the tax year to which they relate.”

After obtaining the record of a person the Commissioner shall conduct an audit of the income tax affairs (including examination of accounts and records, enquiry into expenditure, assets and liabilities) of that person or any other person and may call for such other information and documents as he may deem appropriate.

After completion of the audit the Commissioner may, after obtaining taxpayer‘s explanation on all the issues raised in the audit, amend the assessment.

The fact that a person has been audited in a year shall not preclude the person from being audited again in the next and following years.

The Board may appoint a firm of Chartered Accountants or a firm of Cost and Management Accountants to conduct an audit of the income tax affairs of any person and the scope of such audit shall be as determined by the Board or the Commissioner on a case to case basis.

Where a person fails to produce any accounts, documents and records, required to be maintained under section 174 or any other relevant document, electronically kept record, electronic machine or any other evidence that may be required for the purpose of audit, the Commissioner may proceed to make best judgment assessment under section 121 of this Ordinance and the assessment treated to have been made on the basis of return or revised return filed by the taxpayer shall be of no legal effect.

I hope that the above mentioned comprehensive writing is useful for our honorable reader.

Muhammad Nabeel Ahmed