Audit (Depends on income, assets) 177(1) The commissioner call for the records or the documents of the person including books of accounts under this ordinance and the law for the time being in force for conducting audit for the tax affairs of the person. The Commissioner may, after recording reasons in writing call for record or documents including books of accounts of the taxpayer; and The reasons shall be communicated to the taxpayer while calling record or documents including books of accounts of the taxpayer: The Commissioner shall not call for record or documents of the taxpayer after expiry of six years from the end of the tax year to which they relate. 177(2) After obtaining the record of the person under sub section 1, where the necessary record of the person is not maintained. The commissioner shall conduct an audit of the income tax affairs of that person and call for the documents and information as may deem appropriate. 177(2A) The commissioner may conduct the audit through video links and other methods as prescribed by the board. 177(2AA) Where the Taxpayer has not furnished the records and documents including the books of account. Taxpayer has furnished the incomplete records and documents including the books of account. Unable to provide the sufficient explanation regarding the defects in the records and documents. It shall be construed that taxable income has not been correctly declared and the Commissioner shall determine taxable income on the basis of sectoral benchmark ratios prescribed by the Board. Sectoral Benchmark Ratios Financial Ratios Net Profit Ratios Production Ratios Gross Profit Ratios 177(6) After the compilation of the audit, the commissioner after obtaining the explanation of taxpayer on all the issues raised in the audit, issue the audit report containing audit observations and findings. 177(7) If the person has been audited in a year, then he shall not audited in upcoming 5 years. For example, a person has been audited in 2001, then he cannot audit till 2027, in this duration of 5 years. 177(8) The board or commissioner may appoint the firm of Chattered Accountant as may defined under the Chartered Accountant Ordinance, 1961 or the firm of Cost and Management Accountants under the Cost and Management Ordinance, 1961, to conduct the audit of the tax affairs of the taxpayer and the scope of such audit shall be determined by the board and commissioner on the bases of case. 177(9) An person employed by the firm referred to the sub section 8, may be authorize by the commissioner, in writing exercise the powers of section 175and section 176 for the purpose of conducting the audit. 177(10) Notwithstanding, anything is sub section 2 and 6, where the person fails to produce before the commissioner, Chartered Accountant or Cost and Management accountant appointed by the board or commissioner to conduct an audit, any documents, records or accounts to maintain under section 174 (Records) and any other relevant data or documents as kept electronically may require by the Chattered Accountant or Cost and Management Accountant for the purpose of audit and the determination of income and tax due. The commissioner may proceed the best judgment under section 121 of this ordinance. The assessment has been made on the bases or returns or revised return made. 177(11) The board may appoint as many as Special Audit Penal necessary, compressing one or two members of An officer or officers from Inland Revenue. A firm of chartered accountant as defined under chartered accountant ordinance, 1961. A firm of cost and management accountant as defined under Cost and Management Ordinance, 1961. Any person as may be directed by the board to conduct the audit including forensic audit, the income tax affairs of a person or classes of the person. The scope of such audit shall be determined by the board and commissioner on the bases of case. The tax audit expert deployed under the audit assistance program of an international tax organization or the tax authority outside the Pakistan. 177(12) Special audit penal under section 1 shall be headed by the officer or officers of Inland Revenue. 177(13) The powers under section 175 & 176, for the purpose of conducting order shall be exercised by the officer and officers on Inland Revenue, who are the members of special audit penal authorized by commissioner. 177(14) Notwithstanding, anything is sub section 2 and 6, where the person fails to produce before the commissioner, Special Audit Penal under sub section 11 to conduct an audit, any documents, records or accounts to maintain under section 174 (Records) and any other relevant data or documents as kept electronically may require by the commissioner and penal for the purpose of audit and the determination of income and tax due. The commissioner may proceed the best judgment under section 121 of this ordinance. The assessment has been made on the bases or returns or revised return made. 177(15) If any one member of the special audit panel, other than the Chairman, is absent from conducting an audit, the proceedings of the audit may continue, and the audit conducted by the special audit panel shall not be invalid or be called in question merely on the ground of such absence. 177 (16) Functions performed by an officer or officers of Inland Revenue as members of the special audit panel, for conducting audit, shall be treated to have been performed by special audit panel. 177 (17) The Board may prescribe the mode and manner of constitution, procedure and working of the special audit panel.