The Income Tax Ordinance, 2001







177. Audit.-  


(1)    The Central Board of Revenue, may lay down criteria for selection of any person for an audit of personís income tax affairs, by the Commissioner.


(2)    The Commissioner shall select a person for audit in accordance with the criteria laid down by the Central Board of Revenue under sub-section (1).


(3)     The Central Board of Revenue shall keep the criteria confidential.


(4)    In addition to the selection referred to in sub-section (2), the Commissioner may also select a person for an audit of the personís income tax affairs having regard to -


         (a)  the personís history of compliance or non-compliance with this Ordinance;

       (b) the amount of tax payable by the person;


       (c) the class of business conducted by the person; and

                 (d) any other matter which in the opinion of Commissioner is material for determination of correct income.


(5)    After selection of a person for audit under sub-section (2) or (4), 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.


(6)    After completion of the audit under sub-section (5) or sub-section (8), the Commissioner may, if considered necessary, after obtaining taxpayerís explanation on all the issues raised in the audit, amend the assessment under sub-section (1) or sub-section (4) of section 122, as the case may be.


(7)   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 where there are reasonable grounds for such audits, particularly having regard to the factors in sub-section (4).


(8)   The Central Board of Revenue may appoint a firm of Chartered Accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961), to conduct an audit of the income tax affairs of any person and the scope of such audit shall be as determined by the Central Board of Revenue on a case to case basis.


(9)    Any person employed by a firm referred to in sub-section (8) may be authorized by the Commissioner, in writing, to exercise the powers in sections 175 and 176 for the purposes of conducting an audit under that sub-section.