Selection of cases for audit: LHC declares notices to taxpayers 'ultra vires'

ISLAMABAD: The Lahore High Court (LHC) has declared that the notices issued to the taxpayers for selection of cases for audit, subsequent to the deletion of Section 214D of the Income Tax Ordinance 2001, are clearly ultra vires, and are held to be without lawful authority.

The LHC has set aside the notices issued by the FBR in the writ petitions WP 49412/2019.

According to the LHC order, the notices purportedly issued under Section 214D, were challenged informing the case of the petitioner has been selected for audit as per Section 214D.

The only ground urged is that notices have been issued subsequent to the deletion of Section 214D through Finance Act, 2018, which took effect from July 1, 2018.

Hence, no notices subsequent to the date of repeal of Section 214D could have been issued to the petitioner since, no such powers vested in the officer, who has issued the notices.

The preposition has not been rebutted by the counsel for the respondents/department as undoubtedly through Finance Act, 2018, Section 214D was omitted.

Hence, the power was not available to be exercised by the officers subsequent to the omission.

The notices are clearly ultra vires and are held to be without lawful authority. Consequently, these petitions are allowed and the notices are set aside, the LHC added.

Copyright Business Recorder, 2020