(a) Income Tax Ordinance (XLIX of 2001)---

----Ss. 114, 120 & 177---Central Board of Revenue's Circular No.5, dated 30-6-2003---General Clauses Act (X of 1897), S. 24-A---Return under "Universal Self-Assessment", acceptance of---Selection of return for audit---Scope---Return under S.114 of Income Tax Ordinance, 2001 by virtue of S.120 thereof would become assessment order the moment same was filed and receipt thereof was acknowledged by department after finding same to be complete and in absence of issuance of notice under S.120(3) to assessee---Commissioner did possess discretion of selecting any person for audit having regard to categories of persons detailed in S.177 of Income Tax Ordinance, 2001---Clause (d) of S.177 of Income Tax. Ordinance, 2001 was much wider in scope as compared to other clauses thereof---Such discretion was open to excessive use and abuse of power---Where wide-worded powers conferring discretion existed, there would always remain need to structure discretion---For an action under S.177 of Income Tax Ordinance, 2001, Commissioner was bound to detail the basis of his selection, give reasons for selection, mention clause thereof under which return was selected for audit-- General audit of assessee would result in prejudice to him as he would become subject to scrutiny even regarding his meals and wearing-- Before exercising powers under S. 177 of Income Tax Ordinance, 2001, Commissioner was bound to give notice to assessee, in spite of absence of specific provision of notice in such law-- Absence of any reason in order/intimation of selection for audit would depict non-application of conscious judicial mind by Commissioner before issuing same, rather would appear to have acted mechanically---Order/notice of Commissioner lacking such essentials required by law would be deemed as abuse of exercise of vested discretion and would not be sustainable at law---Principle illustrated.

Director Food, N.-W.F.P. and another v. Messrs Madina Flour and General Mills Pvt. Ltd. and 18 others PLD 2001 SC 1; Aman Ullah Khan and others v. The Federal Government of Pakistan through Secretary, Ministry of Finance, Islamabad and others PLD 1990 SC 1092; Mst. Sattan and others v. Group Captain Masroor Hussain Officer Commanding P.A.F. Station Sargodha Cantt. PLD 1962 Lah. 151; Abdul Rashid v. Government of the Punjab through the Chief Conservator of Forests, Lahore and 2 others 198.5 CLC 199; Mst Abeda Begun: v. Government of Pakistan and others 1985 CLC 2859; Muhammad Tufail v. Government of Punjab 1990 MLD 327; Gul Muhammad and 8 others v. Puxal and 2 others 1991 CLC 229; Messrs Murree Brewery Company Limited v. Director-General, Excise and Taxation and 3 others 1991 MLD 267; Fateh Muhammad v. Mushtaq Ahmad and 9 others 1981 SCMR 1061; Mst Zahida Sattar and others-1v. Federation of Pakistan and others PLD 2002 SC 408; Assistant Collector Customs and others v. Messrs Khyber Electric Lamps and 3 others 2001 SCMR 838 and Government of N.-W.F.P. through Secretary and 3 others v. Mejee Flour and General Mills (Pvt.) Ltd. Mardan and others 1997 SCMR 1804 rel.

(b) Notice---

---- Notice to party to be proceeded against---Scope---No one is to be condemned unheard---Provision of notice to the person, against whom one proposes to proceed, has to be read in every statute irrespective of the fact that no such provision is incorporated therein.  

Mst. Sattan and others v. Group Captain Masroor Hussain. Officer Commanding P.A.F. Station Sargodha Cantt. PLD 1962 Lah. 151; Abdul Rashid v. Government of the Punjab through the Chief Conservator of Forests, Lahore and 2 others 1985 CLC 199; Mst. Abeda Begum v. Government of Pakistan and others 1985 CLC 2859; Muhammad Tufail v. Government of Punjab 1990 MLD 327; Gul Muhammad and 8 others v. Puxal and 2 others 1991 CLC 229; Messrs Murree Brewery Company Limited v. Director General, Excise and Taxation and 3 others 1991 MLD 267; Fateh Muhammad v. Mushtaq Ahmad and 9 others 1981 SCMR 1061; Mst. Zahida Sattar and others v. Federation of Pakistan and others PLD 2002 SC 408 and Assistant Collector Customs and others v. Messrs Khyber Electric Lamps and 3 others 2001 SCMR 838 rel.

(c) General Clauses Act (X of 1897)---

----S. 24-A---Exercise of statutory powers by authority/officer-- Principles stated.

Under a law, a power to make any order or to give any direction conferred on any authority, officer of person, has to be exercised reasonably, fairly, justly and for advancement of the purpose of the enactment. If such an authority does not demonstrate application of its anxious mind to the case by giving reasons, one cannot assess that the order has been passed in advancement of the purpose of the enactment under which the same is passed. Section 24-A of General Clauses Act, 1897 requires, as far as necessary, giving of reasons for making an order or issuing any direction.  

Col. (Retd.) Ayub Ali Rana v. Dr. Carlite S. Pune and another PLD 2002 SC 630 and Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others 1998 SCMR 2268 fol.

(d) Income Tax Ordinance (XLIX of 2001)---

----Ss. 208 & 215---Press release (Circular) issued by Central Board of Revenue subsequent to filing of return by assesses---Effectiveness---Such press release would not work retrospectively as same was not in knowledge of assesses at the time of filing of their returns.  

Sadiq Brothers Poultry, Rawalpindi v. Appellate Additional Commissioner I.T./W.T., Rawalpindi 2003 PTD 122 and 2003 PTD 1780 rel.

Dr. Ilyas Zafar, Shahbaz Ahmed Butt, Shafqat Mehmood Chohan and Muhammad Latif Qureshi for Petitioners.

Shahid Jamil Khan, Legal Advisor for Respondent.

Date of hearing: 21st July, 2004.

JUDGMENT

This judgment proposes to decide 131 Constitutional petitions, detailed in the schedule appended herewith and are being decided through single judgment as all these petitions arise in similar circumstances, against the same set of respondents, raise similar questions of law and facts and are directed against alike order passed by the Commissioner Income Tax (CIT) under section 177 of Income Tax Ordinance, 2001, selecting cases of all the writ petitioners for general audit.

2. Precisely, relevant facts are that the petitioners filed their income tax returns under section 114 of the Income Tax Ordinance, 2001 within the time fixed by the respondents, by paying the due tax, before hand. The writ petitioners were not served with any notice in terms of section 120(3) of the Ordinance (ibid) and thus, their returns of total income declared in the returns filed by them, were to be considered as assessment orders by the operation of law, ordained by section 120 of the said Ordinance. These returns were named as "Universal Self- Assessment" by the Central Board of Revenue (C.B.R.) in its Circular No.5, dated 30-6-2003. According to this circular concept of universal assessment as embodied in section 120 of the Income Tax Ordinance, 2001, all the returns of income, other than those revised under subsection (6) of section 114, filed for the tax year, 2003 and onwards, were to fall in this category. Central Board of Revenue itself mentioned in its circular that the returns qualifying for acceptance under this scheme, shall be deemed to be the assessment made and issued by the Commissioner on the date those returns were furnished.

3. The Commissioner Income Tax, in the light, of directions issued through letters, dated 10-3-2001 and 12-3-2004 issued by the Member Audit, exercising his powers under section 177 of the Ordinance, 2001 passed orders on 4-5-2004 that income tax returns of the petitioners filed under Universal Self-assessment" have been selected for audit. This order reads as under:--

"In accordance with the provisions under section 177 of the Income Tax Ordinance, 2001, your return for Tax year, 2003 has been selected for an Audit."

In pursuance to the order by the Central Board of Revenue, notices were issued to the petitioners intimating them, selection of their income tax returns for audit, of which aggrieved, the petitioners filed the Constitutional petitions before this Court assailing the order/notice by the Commissioner Income Tax. The respondents in response to the notice by this Court have appeared through their counsel. Since short point of interpretation of provisions of section 177 of the Ordinance, 2001 was involved in all these petitions, those were admitted to regular hearing and by concurrence of the parties, were taken up for final disposal.

4. All the counsel .for the writ petitioners argued the case on alike lines and main arguments were addressed by Messrs Dr. Ilyas Zafar, Shahbaz Ahmed Butt, Shafqat Mehmood Chohan and Muhammad Latif Qureshi, Advocates. In their submissions, the income tax returns once having been accepted in form of assessment orders by virtue of section 120 of the Income Tax Ordinance, 2001, the same could not be reopened and that too, without notice/hearing of the concerned assessee and that without giving reasons and without detailing under what clause of the section 177 of the Income Tax Ordinance, 2001, their cases have been selected for audit. According to the learned counsel for the petitioners, Commissioner Income Tax was required under law to give reasons before passing an order under section 177 of the Ordinance (ibid) but the order impugned in all the writ petitions being sketchy and without any reason is not sustainable at law in view of section 24-A of the General Clauses Act, 1897. It was also submitted that the Commissioner Income Tax at the time of assumption of jurisdiction under the above referred provisions of law was needed to act judiciously, by applying conscious judicial mind to the cases and after giving opportunity of hearing, was to pass a speaking order but this was not done, negatively reflecting on the orders impugned. Learned counsel for the petitioners further elaborated their arguments by asserting that the Commissioner. Income Tax had no jurisdiction to select any income-tax return for total audit, the same having been culminated in an assessment order under section 120 of the Ordinance and thus, reopening of cases is not only arbitrary/fanciful but the same is also discretionary and opposed to Constitutional warrantees, in the sense that once the assessee who had already been audited in the preceding year, cannot be again subjected to the agony of audit and that too, without any just cause or reason. According to the submissions of the learned counsel for the petitioners, the orders impugned are opposed to Circular No.5, dated 30-6-2003 issued by the Central Board of Revenue, as well, which in itself has the force of law and was binding on the Commissioner Income Tax, being its subordinate functionary thus, the impugned orders are not sustainable. It was also urged on behalf of the petitioners that income tax returns under "Universal Self-Assessment" were filed in September, 2003 and the parameters given for selection of return for audit on 13-52004 are illegal, without lawful authority and jurisdiction, as those could not act retrospectively. Relying on the judgments of the Hon'ble Supreme Court in the case of Director Food, N.-W.F.P. and another v. Messrs Madina Flour and General Mills Pvt. Ltd. and 18 others (PLD 2001 SC 1) it was contended that discretion vesting in an authority discharging administrative, judicial or quasi-judicial functions, has to be exercised within the, framework of the statute giving such discretion, in an intelligible and reasonable manner by giving reasons. Reference was also made to the alighted judgment of the Hon'ble Supreme Court in the case of Col. (Retd.) Ayub Ali Rana v. Dr. Carlite S. Pune and another (PLD 2002 SC 630) with the argument that discretion vesting in an individual has to be exercised by, application of judicial mind based on relevant consideration, in adjust and proper manner to advance the cause of justice and not whimsically or arbitrarily Regarding maintainability of Constitutional petitions, judgment by a Full Bench of the Karachi jurisdiction in the case o: Messrs Pak Saudi Fertilizers Ltd. v. Federation of Pakistan and others (2002 PTD 679) was heavily emphasised.

5. Learned counsel for the respondents refuted the arguments of the petitioners, supported the impugned orders passed by the Commissioner Income Tax and urged that this notice is not, as a matter of fact an order and is an intimation to the assessee regarding selection of his return for audit and thus, it required no reasons to be given therein. He further submitted that under section 177 of the Ordinance, before issuance of notice or confronting the taxpayer for the purposes of selection of his return, his hearing is not a requirement of law because no prejudice by selection of the returns of the petitioners is caused to them. According to his submissions, unless and until a prejudice is shown by the assessee, he cannot maintain a Constitutional petition. He further submitted that the audit simply means verification of the declaration of the taxpayer and in case of any, inconsistency, the matter will be dealt with in accordance with section 122 of the Ordinance for amending the assessment order. Learned counsel for the respondents further elaborated his arguments by alternatively saying that requirement of a notice and that of a speaking order, are satisfied in the cases in hand, because a press release was issued on 13-5-2004 laying the parameters for toe selection of the cases for audit wherein reasons have been given for such selection. It was also submitted on behalf of the respondents that section 24-A of the General Clauses Act, 1897 is not applicable to the cases in hand because the action under section 177 of the Ordinance has not caused any prejudice to the assessee. Replying to the arguments of the petitioners regarding exercise of discretion by the Commissioner Income tax, it was submitted that the discretion has correctly and lawfully been structured, according to the guidelines laid down by the Hon'ble Supreme Court in the case of Aman Ullah Khan and others v. the Federal Government of Pakistan through Secretary, Ministry of Finance, Islamabad and others (PLD 1990 SC 1092). Learned counsel for the respondents made a comparison of the provisions of old Income Tax Ordinance, 1979 with the new Ordinance, 2001 to contend that earlier under section 62 of the Ordinance, 1979, the "Self -Assessment Scheme" was available subject to 20% increase of income, from the last year's declared or assessed income and in spite of this increase, assessees were subject to general audit of his return according to the formula given therein, whereas under the present Ordinance assessee need not increase his previous income by 20% and is only liable to audit in case, he is covered by section 177 of the Ordinance, 2001. According to his submissions, the concept of audit envisaged by section 177 of the Income Tax Ordinance, 2001, though is "new in this country but is being applied in different countries like United States of America etc. where it has worked with success. Referring the assessment order mentioned in section 120 of the Income Tax Ordinance, 2001 it was explained that by it no vested right is created in taxpayer that he cannot be audited/asked to substantiate his version by producing supporting documents under section 177 of the Ordinance. It was also urged that the department has a right to check the veracity of declared version of the assessee and the same cannot be denied having been provided by the statute and that the rationale behind section 177 is only to give caution to the taxpayer, to file correct return which, otherwise is his legal and moral obligation. Reference to the Circular, dated 11-6-2004 by the Central Board of Revenue was also made for the submission that classes of business can be made for the purposes of audit because all the assesses are liable to audit under the Ordinance, 2001.

6. I have anxiously considered the respective arguments of the learned counsel for the parties and have examined the record, appended herewith. The relevant provision of law under which the impugned order/notice was issued by the Commissioner Income Tax is section 177 of Ordinance, 2001 which reads as under:--

"Audit:--(1) The Commissioner may select any person for an audit of the person's income-tax affairs having regard to:--

(a) the person's 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 that the Commissioner considers relevant.

(1-A) After selection of a person for audit under subsection (1), 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.

(1-B) After completion of the audit under subsection (1-A) or subsection (3), the Commissioner may, if considered necessary, after obtaining taxpayer's explanation on all the issues raised in the audit, amend the assessment under subsection (1) or subsection (4) of section 122, as the case may be.

(2) 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 (1).

(3) 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 by case basis.

(4) Any person employed by a firm referred to in subsection (3) may be authorized by the Commissioner, in writing, to exercise the powers in sections 175 and 176 for the purpose of (conducting) audit under, that subsection."

Examination of the above produced provision of law, no doubt equips the Commissioner Income Tax with the powers to select any person for an audit having regard to four categories of persons detailed therein. Clause (d) of subsection (1) of section 177 gives discretion to the Commissioner to audit any person on the basis of any other matter which he considers relevant. This clause (d) of subsection (1) of section 177 is quite wider in scope, as compared to, other clauses wherein categories/classes of different persons have been mentioned but is more demanding as Commissioner Income Tax has to detail the matter/basis of his selection and has to give reasons which he considered relevant for this exercise. Any way, while invoking powers under section 177 of the Income Tax Ordinance; 2001, the Commissioner Income Tax is not only required to mentioned the clause of the above-referred law under which the assessee was selected for audit but was also supposed to give reasons for such selection because his return having been filed under section 114 of the Ordinance (ibid) was to be treated as an assessment order under section 120 of the Ordinance which is reproduced for the convenience:--

"Section 120: Assessments: (1) Where a taxpayer has furnished a complete return of income (other than a revised return under subsection (6) of section 114) for a tax year ending, on or after the 1st day of July, 2002.

(a) the Commissioner shall be taken to have made an assessment of taxable income of the taxpayer for that tax year, and the tax due thereon, equal to those respective amounts specified in the return; and

(b) the taxpayer's return shall be taken for all purposes of this Ordinance to be an assessment order issued to the taxpayer by the Commissioner on the day the return was furnished.

7. Besides the provisions above produced, Circular 5 of the Central Board of Revenue, dated 13-5-2004 is also self-explanatory on the point that the income tax returns filed under the "Universal Self-Assessment" shall be deemed to be the assessment orders. Relevant portion of Circular 5, is as under:--

"The concept of Universal Self-Assessment is embodied in section 120 of the Income Tax Ordinance, 2001. Accordingly, all returns of income, other than the revised returns under subsection (6) of section 114, filed for the tax year, 2003 onwards shall be returns of Universal Self-Assessment. In view of clause (b) of section 120 a return qualifying for acceptance under Universal Self-Assessment shall be deemed to be the assessment order made and issued by the Commissioner on the date the return was furnished."

This provision leaves no ambiguity regarding the fact that return of an assessee filed under section 114, at the strength of section 120 of the Income Tax Ordinance, 2001, becomes an assessment order the moment it is filed and receipt thereof is acknowledgement by the department, by operation of law, if found to be completed and no notice under subsection (3) of the latter mentioned section is issued. The primary point which hinges for determination is as to whether after once having passed an assessment order by accepting the returns, the same could be reopened for audit or otherwise, without notice hearing of the assessee and that too, without giving any reason, without pointing out any of the clauses of section 177 of the Ordinance, as to under what clause and category he is being subjected to scrutiny. The abrupt answer is No, it cannot be done because under clause (a), audit can be done keeping in view the person's history of compliance or non-compliance with the Ordinance, while proceeding under clause (b), the amount of tax payable by the person has to be kept in mind, under clause (c), class of business conducted by the assessee, has to be considered and under the remaining clause (d), Commissioner can proceed against any person for any other reason which is considered by him to be relevant. Under last mentioned clause, unless the Commissioner Income Tax narrates reasons for the action of picking the persons for audit, his order would not reflect his mind, which is not the intention of law, as the same is obvious from the language of clause (d). This brings me to hold that Commissioner Income Tax can proceed against any person but while so doing he has to mention under the clause of section 177(1) of the Ordinance, 2001, under which he proposed to proceed and at the same time, he has to give reasons for the action against the assessee because his assessment order is to be reopened and declaration in the return is to be scrutinized which is an order adverse to the provisions of section 120 of the Ordinance (ibid).

8. Learned counsel for the respondents attempted to negate the assertions of the petitioners by urging that no notice is needed before proceeding under section 177 of the Ordinance, because by the exercise of audit, no prejudice is caused to the assessee. Though this contention has no substance in it and cannot be accepted even on its face value because general audit of a person does result in prejudice to the assessee as he becomes subject to scrutiny even regarding his meals and wearing yet the law itself provided that the return filed by the assessee would amount to an assessment order and when the department opts to reopen the case for scrutiny/audit/detailed analysis a notice to the assessee has to be given before proceeding adverse to his interest, in spite of absence of specific provision of notice, in the said law. Law regarding notice to the concerned party is settled by this time and the superior judiciary of country is consistent on the question of giving notice to the concerned persons before proceedings against him, besides the applicability of principles of natural justice whereunder no one is to be condemned unheard. The Hon'ble Supreme Court of this country has very graciously mandated that provision of notice to the person against whom you propose to proceed, has to be read in every statute irrespective of the fact that no such provision is incorporated therein. Reference in this behalf can be conveniently made to a chain of judgments, a few of those are in the cases of Mst. Sattan and others v. Group Captain Masroor Hussain, Officer Commanding P.A.F. Station Sargodha Cantt. (PLD 1962 Lahore 151), Abdul Rashid v. Government of the Punjab through the Chief Conservator of Forests, Lahore and 2 others (1985 CLC 199), Mst Abeda Begum v. Government of Pakistan and others (1985 CLC 2859), Muhammad Tufail v. Government of Punjab (1990 MLD 327); Gul Muhammad and 8 others v. Puxal and 2 others (1991 CLC 229), Messrs Murree Brewery Company Limited v. Director-General, Excise and Taxation and 3 others (1991 MLD 267), Fateh Muhammad v. Mushtaq Ahmad and 9 others (1981 SCMR 1061) and Mst. Zahida Sattar and others v. Federation of Pakistan and others (PLD 2002 SC 408).

9. In the case of Assistant Collector Customs and others v. Messrs Khyber Electric Lamps and 3 others (2001 SCMR 838) manufacturer of the electric bulbs imported raw material for their product which was exempted from payment of customs duty but the Customs authorities issued demand notice under section 32 of the Customs Act, 1969 requiring short assessed duty on the ground that the imported goods were components and not the raw material. The notice was challenged in Constitutional jurisdiction of the High Court where maintainability of writ petition was challenged in view of appeal provisions in the statute but the writ was issued by the High Court holding demand notice to be void, having been issued without notice. Matter was graciously considered by the Hon'ble Supreme Court and judgment of the High Court was maintained and it was held that demand notice was defective and not maintainable as it did not reflect whether the alleged untrue declarations/statements were collusive or inadvertent and. did not contain specific particulars relating to the provisions under which it was issued. It was further observed that notice being not in conformity with law was rightly struck down by the High Court. This alighted judgment of the Hon'ble Supreme Court applies to instant case with all force and I respectfully following the dictum laid down, hold that Commissioner Income Tax is bound to issue notice to the assessee before exercise of his powers under section 177 of the Ordinance (ibid).

10. Adverting to the structure of impugned order/notice, it is not denied during the course of hearing of the case that there is no other independent order at the back of the order/notice impugned, giving detailed reasons selecting the petitioners or their returns for audit. The order impugned, reproduced in the factual part of this judgment, demonstrates that besides the fact that no clause of section 177(1) of the Ordinance is mentioned therein, no reason of any kind have been given for the impugned selection. Absence of reasons/logic of any kind, in the impugned order clearly depicts non-application of conscious judicial mind by the Commissioner Income Tax before issuing it, who by so doing appears to have acted mechanically. I would have readily accepted the assertion of the learned counsel for the respondents that it is merely an intimation of selection for audit, had there been some independent speaking order on its back but in absence of it the argument has no credence in it for determination. Assuming for the sake of arguments that it is an intimation of audit to the assessee even in that case reasons should have been detailed therein for an action under section 177 of the Income Tax Ordinance, 2001. To my mind, whatever it may be, order, notice or intimation, it is defective for the reasons detailed above and cannot be sustained because under law a power to make any order or to give any direction conferred on any authority, officer or person, has to be exercise reasonably, fairly, justly and for advancement of the purpose of the enactment. If such an authority does not demonstrate application of its anxious mind to the case by giving reasons, one cannot assess that the order passed in advancement of the purpose of the enactment under which the same is passed. We can conveniently refer to section 24(a) of the General Clauses Act, 1897 which requires, as far as necessary, giving of reasons for making an order or for issuing any direction. The Hon'ble Supreme Court in the cases of Messrs Airport Support Services v. The Airport Manager, Quaid-e-Azam International Airport, Karachi and others (1998 SCMR 2268) and Col. (Retd.) Ayub Ali Rana v. Dr. Carlite S. Pune (PLD 2002 SC 630) mandating that where a statute confers any power to an authority, the same should be exercised reasonably, fairly and justly for the advancement of the enactment and the concerned authority must reflect reasons for its order or direction and in case those reasons are lacking, the affectee can demand, the same by having the order annulled.

11. I have already remarked in the foregoing paragraph that the Commissioner Income Tax did possess discretion of selecting any person for audit under the provisions subject of scrutiny which are also, open to excessive use and abuse of power and viewing such wide-worded powers, the Hon'ble Supreme Court graciously laid down principles governing exercise of the discretion in many cases like Aman Ullah Khan and others v. The Federal Government of Pakistan through Secterary Ministry of Finance, Islamabad and others (PLD 1990 SC 1092), Government of N.-W.F.P. through Secretary and 3 others v. Mejee Flour and General Mills (Pvt.) Ltd. Mardan and others (1997 SCMR 1804) and Director Food N.-W.F.P v. Madina Flour and General Mills (PLD 2001 SC 1) by holding that discretionary decision has to be made according to rational reasons which means findings of primary facts, based on good evidence and that wherever wide-worded powers conferring the discretion exists, there remains always the need to structure the discretion which means regularizing of the so created discretion by organizing it, requiring the exercising authority to give reasons, so that decision may achieve the high quality of justice. The seven principles laid down by those judgments, for structuring discretion are, open plans, open policy statements, open rules open findings, open reasons, open precedents and fair informal procedure. The order impugned if tested on the touchstone given by the Hon'ble Supreme Court, it falls to the ground, as none of those has been followed by the Commissioner Income Tax.

12. Adverting to the parameters given by the Central Board of Revenue for audit, it is an open secret that the press release in this behalf was issued on 13-5-2004 conveying the parameters for corporate/non-corporate returns though these parameters were also not mentioned in the impugned order yet the claim of the respondents that the writ petitioners were selected for audit on the basis of those parameters given by the Central Board of Revenue, in itself shows that the Commissioner Income Tax selected the cases without applying his own independent mind, through a mechanical process, being oblivious of his own powers under section 177 of the Ordinance, 2001. It goes without saying that non-mentioning of the basis for selection, the reasons or parameters in the impugned order, is not only an attempt to trap the unwary assessee but, has also a tint of discrimination in it which is prohibited under the provisions of the Constitution of this country. The press release, dated 13-5-2004 issued by the Central Board of Revenue subsequent to the filing of the returns by the assessees is of no legal consequence as it could not work retrospectively, as those were not in the knowledge of the assesses at the time of filing of their returns. Reference in this behalf can be made to the judgments of this Court in the case of Sadiq Brothers Poultry, Rawalpindi v. Appellate Additional Commissioner. I.T/W.T., Rawalpindi 2003 PTD 122 and 2003 PTD 1780. In both these cases, the circular issued by the Central Board of Revenue specifying certain categories of the assesses whose cases were selected for special audit for the assessment year, 1998-99 were held to be unjustified and it was ruled that all the categories of assesses should have been given information well before filing of their returns under the "Self-Assessment Scheme" with an added finding that such circular after filing of self-assessment returns are illegal exercise of discretion vesting in the Revenue Authorities.

13. For the reasons noted above, I have no hesitation to hold that the impugned order/notice is defective as the same lacks the essentials require by law to be noted therein which at the same time is abuse of exercise of the vested discretion and thus, the same is not sustainable at law and is declared to be illegal/void and non-existent. Before parting with the judgment, I must observe that the Commissioner Income Tax can initiate fresh proceedings of audit strictly in accordance with law and according to the observations made above. Resultantly, all the writ petitions mentioned in the schedule appended herewith, are accepted and writ, as prayed is issued, with no order as to costs.

H.B.T./M-695/LPetitions accepted.