' SYED MANSOOR ALI SHAH, J. --- This order shall decide the instant petition, as well as, the connected matter bearing W.P. No. 5674/2015 as both the petitions raise similar questions of law and facts.
2. The petitioners have impugned Audit Policy, 2014 for Tax \Year 2013 issued by respondent FBR.
Learned counsel for the. Petitioners submits that the petitioners fall in the corporated non- corporate sectors, respectively. Their grievance is that non-filers of sales tax have not been included in the Audit Policy, as a consequence, the said Policy is discriminatory and bad in law. In support of the said contention, it is submitted that on the basis of the figures obtained from the FBR, the total NTN holders in the country are 3.5 million whereas the persons filing income tax returns are only 844 885, therefore, a large number of persons have been excluded from audit thus giving them a premium for not complying with the law. In support of this argument, he further submits that under Section 214C of the Income Tax Ordinance, 2001 read with the Division Bench judgment of this Court reported as Messrs lttefaq Rice Mills v. Federation of Pakistan and others (2013 PTD 1274) audit has to be "person-based" whereas the present Audit Policy is "return-based" which is, therefore, in violation of the above statutory provision. In the end, he submitted that there is no reason for excluding the salaried class from audit while including the petitioners under the said Policy.
3. Learned counsel for the respondent alongwith the departmental representative submitted that according to the present capacity and resources available to FBR, approximately 12% of the total returns or taxpayers can be audited and, therefore, FBR has to frame a strategic policy which can best capture the interest of revenue keeping in view the above limitations. Audit is to verify tax compliance by the taxpayers and the focus of the Policy is persons or classes of persons keeping in view the revenue potential and the risk perception in a tax transaction. It is for this reason that non- filers of tax returns are not the subject-matter of the Audit Policy. He, however, adds that there is a separate legal mechanism for dealing with non-filers.
4. I have heard the learned counsel for the parties and gone through Audit Policy, 2014.
5. Section 214C of the Income Tax Ordinance, 2001 provides that FBR can select taxpayers for the purposes of audit on the basis of parametric or random ballot. Audit Policy, 2014 provides for selection of taxpayers through ballot on random basis after exclusion of certain classes. The Board under Section 214C of the Ordinance is fully empowered to exclude certain classes of taxpayers before selecting the others for audit through random ballot. This exclusion is a Policy issue and, inter alia, structured on the basis of risk perception and revenue potential in a particular tax transaction. In the present case, the objection is that as non-filers have been wrongly excluded from the ambit of audit and persons from salaried classes are excluded, hence, the petitioners are being discriminated by being included for audit. There is no illegality if FBR, keeping in view its audit objectives, frames a Policy, which excludes certain persons or classes of persons from audit.
Needless to say,. That any such Policy must be based on reason besides being fair, transparent, just and equitable. In the present case, non-filers and salaried class do not fall under high risk perception according to the FBR an form a separate class, hence, their exclusion does not amount to any discrimination.
6. No other reason or ground has been agitated to challenge the fairness, equity or transparency of Audit Policy, 2014. Framing of a strategic Audit Policy is a fiscal and monetary exercise which has to be best left to FBR with the caveat that the Court can review such a Policy if it fails on the score of fairness, equity or transparency. In the present case, the grounds agitated before this Court do not establish that Audit Policy, 2014 is unfair or discriminatory. Therefore, there is no force in the submissions made by the learned counsel for the petitioners. The instant petition and connected W.P. No. 5674/2015 are, therefore, dismissed with no order as to costs.