MUHAMMAD SAJID MELIMOOD SETHI , J. Through this Reference Application unde r Section 133 of the Income Tax Ordinance, .2001 ("Ordinance of 2001 "), following question of law, asserted to have arisen out of impugned - order dated. 11.05.2012, passed by the Appellate Tribunal Inland Revenue, Lahore Bench, Lahore ("Appellate Tribunal "), has been proposed for our opinion:- "Whether on the facts and in the circumstances of the case, the Appellate Tribunal Inland Revenue was justified in holding, the order u/S. 122(1) passed in the case selected for audit u/S. 177(4)(a)&(d) as illegal despite the fact that the intimation, disclosing criteria/reasons for selecting the case. for the purpose of audit in terms of Section 177 was made to the taxpayer duly incorporated in the assessment order as per ratio settled in the judgment of Supreme Court of Pakistan reported as 94 Tax 317?"
2. During arguments, it surfaced that identical cases selected for audit relating to tax years 2004 to 2008 were sent back to department by Hon'ble Supreme Court of Pakistan in Chairman, F.B.R. and others v. Idrees Traders' and others (2012 PTD 693 ).
3. Learned counsel for the parties have jointly requested that this case may be sent to applicant-department for complying with directions by Hon'ble apex Court in Idrees T raders case ( supra ).
4. In view of the consent by learned counsel for the parties, applicant-department is directed to comply with the directions of Hon'ble Supreme Court of Pakistan, which are reproduced hereunder:-
(i) The department is directed to follow the policy in letter and spirit, which has been reproduced hereinabove and if the letters have not been withdrawn, reasons should be assigned and after providing opportunity to the respondents, it be clearly pointed out to them that their cases are not covered unde r the policy and they may apply afresh if need be.
(ii) If the department intends to proceed, then sufficient opportunity be given to the taxpayers to put up the pleas so that no prejudice may cause to them in any manner .
5. This Reference Application is disposed of in the light of direction in the judgment noted supra .
6. Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per Section 133(5) of the Income Tax Ordinance, 2001.