14

Income Tax Authorities

Under Section 116 of the Income Tax Act, 1961 there are provisions regarding and
administration ofregulations by the authorities. They are as follows:
1. Central Board of Direct Taxes.
2. Director General-Chief Commissioner of Income Tax.
3. Director-Commissioner of Income Tax.
4. Additional Director-Additional Commissioner of Income Tax.
5. Joint Director-Joint Commissioner of Income Tax.
6. Deputy Director-Deputy Commissioner of Income Tax.
7. Assistant Director-Assistant Commissioner of Income Tax.
8. Income Tax Officer-Commissioner (Appeals).
9. Tax Recovery Officer-Additional Commissioner
(Appeals)
10. Inspector of Income Tax-Deputy Commissioner
(Appeals).
Power of CBDT (Central Board of Direct Taxes)
t is an independent organisation which is established under the finance ministry of Govem-
ment of India under Central Board of Revenue Act. 1963. It relates to all kinds of direct taxes
imposed by the State Government it is an only supreme administrative organisation in which all
kinds of direct taxes rules, regulation & administration is conducted/members are appointed by the
Central Government among one is appointed as the President. Power of the board is as follows:
1.
Appointment of Authorities Us 117 of the Income Tax Act, 1961 the Central
Government who so ever feels fit may appoint as the authority of the Board ormay appoint officers
belowtherank of Director-General, Chief Commissioner, Directoror Commissioners on the other
bandappointthe clerical employees who atleast will be appointed by the income tax officers (on
authorisation by the board).
all
I n the same way the officers or employee appointed will be deemed public servant and
as
rules and order regarding appointment will be enforced.
2. Control on Authorities: Under Section 118 of the Income Tax Act, 1961 control over tne
authority 1S made after government order along with that it also discriminate among officiais
seniority.
[Link] to the Subordinate Officer Under Section 119 of the Income Tax ACt, 1961
the board for proper functions may order its subordinate officials who will be bounded. e c p
Such types of order is for the guidance, any kind of order/rules (A) to finish any mattersper ia
Which is effected in the working of the Conversions Appeal cannot be given [New Bank O
 Income Tax Authorities I 313

snc2) 136
136 17R 679 Delhi. In the above the order given by the board is binding on all who
(1982)
Lid. ITR for the functioning but these type of order is not for the Courts [CIT u/s Swedish
are respo Co. Ltd. (1981) 127 ITR 148 Calcutta], but if the order of the board is
a r er e s p o n s i b l e

against the Act or is

EastAsia the :sesses then
assesses
then the
there orders can be misconducted [CIT u/s Ruby Traders Explorer Ltd.
ul for
220ITR 526
Calcutta].
(2004)
The Board u/s 192(2) for the following order general/special orders
of Collection of Tax & Tax Assessment.
I n relation to management
(2) In case of any party or fringe benefits.
(3) In case compulsion in general benefit.
of period in where time has expired in case dues refund
4) In relation with expiration
case

rebate etc.
80A U & u/s 14 59 to the difficulties in case of
(5) In relation with dues u/s
to to overcome

oppositive matters.
of work, function.
Jurisdiction u/s 120 of the Income Tax : (1) The board have power
4.
authorities. (2) The board may appoint Director-General
or
power& responsibilities over its officials. (3) The board may provide such special power
to
Director for the work/functions of other
Commissioner may be appointed for following
Director-General or Chief Commissioner that deputy
on a written order.
the power of the assessing officer
124 of the Income Tax Act, 1961 if dispute
is
5. Transfer of Settlement of Disputes: u/s it will be
Commissioner or Commissioner then
between Director-General, Director or Chief
will be Overcomed the board. Similarly, ifany by
other dispute
overcome by personal compromises,
officer is there then assessing officers under same
if it is between the
dispute region ofofassessing
a
then dispute will be settled by them in
Chief Commissioner or Commissioner
Director-General, and the board can transfer it to any
other case if the officials are not satisfied hen by the board ITR 129
Co. u/s Chairman (BD) (1990) 185
Assessed Officer (Section 12) Sameer Leasing
an
Delhi].
128 of the Income Tax Act, 1961 may provide
or
6. Disclosure of Information : Section ofticials of
for the responsibilities, by any
information asked in relation of any assessed by
SCIOse
the board, or by any officials.
1961 for the function &
Rules : Section 295 of the Income Tax Act,
7. Power to Make of India) can frame or make any
board (for whole of India or any part
dministrable of the Act the both houses of Parliament for
Central Government in front of the
Which is kept by the
acceptance. Commissioner
Commissioner or
rector-General Director, Chief
or
or Directors and u/s
the Income Tax Act, 1961 Director-General
Under section 2(21) of the Act Section 117(1) a
Commissioner means under
)Chief Commissioner and u/s 2(16) such post and who
work under the rules &
Central Government on
The functions of power
On appointed by the stated by the board.
of the board by the jurisdictions of whom is
dlon
are as below:
Commissioner on
rank of the Assistant
1. Appointment of all the officers below the authorisation by the board can appoint
the Central Government and on
authorisation by (Section 117)
assistant employees.
314 I Income Tax Authorities

2. They have power to give order to lncome Tax Authorities. [Section 110/2
3. They have power to give up the work of Assistant Joint Commisei
1Ssioner
or income.
case of a
special area, person
4. Thev have power to transtfer the assIstant between two subordinate asse:
ordinate assessing officer:
[Section 127)1
5. They have power to appoint deputy direetor, Assistant director, Assistant Commicot.
or Income Tax Offices for Search and
Seizure. (Section 132) 5sioner
6. Have power to ask for Balance sheet and other accounts from the officers
authorize the Deputy Director, Assistant Commissioner and Income Tax officer to asemay
the above accounts. (Section 132A) for
7. Power to ask for the information and books under the Act. (Section 133)
8.
8. Power under the Act for search/investigation which is their with the Income Tax Officers
TS.
(Section 135)
9 Power to give order to Chief Commissioner/Commissioner for such information which is
received by the Income Tax officials under the Act. (Section 138)
10. They have power after the 4 years of assessment u/s 148 for re-assessment notice
approval. (Section 151)
11. They have power to present tax refund which is stopped by the Income Tax Officers.
(Section 241)
12. They have final power of computation of interest for the delayed period in case of Tax
refund. (Section 244A)
13. They have power to give order in case of Late tax refund and tax payable by the assessee.
(Section 245)
have
14. If there is any Govt. loss due to any order given by the assessing officer then they
power to look into the matter justifiably. (Section 263)
ask for record in case ot
15. The commissioner except the above re-consideration order can

any and after listing may order any order. (Section 264)
16. u/s 27(1) 4(3) the Commissioner have power to reduce or forgive any penalty. (Sectiot

273(A) r
17. The Director-General or Chief Commissioner u/s 271(1) they have powerto
reduce the penalty (in case of income escaped 5,00,000 or more). [Section 275A(-NO
18. They have power to overcome the order to any seizure. (Section 2818
or Deputy
Additional Director/Commissioner Joint or
Director/Commissioners

Director/Commissioner or Assistant Director/Commissioner

Under section 2(21) of the Income Tax Act, 1961 the additional director or n or Joint
Deputy director or Assistant director and under section (19A) Addition Cohe Act.|Section
ion

Commissioner or Deputy Commissioners or Assistant Commissioner means undeark under

117(1)] a person appointed by the Central Government on such post and who w owers

T he i
provisions of the boards the work areas of whom is specified by the board.
areas ahead
 Income Tax Authorities I 315
Pawer to supply order to tne ASSessing Officer. [Section 119(31
The Joint Commissioner or Deputy Commissioner
have all powers under the Act
regarding Code of Civil Procedure, 1908.
The loint Director, Assistant Director or [Section 131(1)1
Deputy Director have power to ask for book of
accounts and other documents. [Section 131(la)l
AOn approval by the board the Deputy
Directory
Assistant Commissioner for search and seizure. may appoint
the Assistant Director
or
The Deputy Director, Deputy Commissioner, Assistant Director and
Assistant
Commissioner have all powers to call for information. (Section 133)
6. The Deputy Director, Deputy Commissioner or Assistant Director or Assistant
Commissioner have power to investigate all officer, places under his
(Section 133A) jurisdiction.
7. The Joint Commissioner or Officer appointed by them have power to check loan
certificate or Mortgage, Accounts and have power to take its copy. (Section 134)
8. The Joint Commissioner under the Act have powers to ask assessing officers to
investigate. (Section 135)
9 The Joint Commissioner during the process of tax assessment have power to investigate
the Accounts and documents and also have power to give relevant orders to the assessing
officers. (Section 144A)
10. The Deputy Director, Deputy Commissioner, Assistant Director or Assistant Com
missioner in case of reasonable reasons have power to cancel the registration. (Section
144B)
11. They have power to use the Income Tax power given. (Section 215A)
Income Tax Officers
Section 2(25) of the Income Tax Act, 1961. The Income Tax officer means under the Act
(Section 117) appointed Income Tax Officer. The first Class Income Tax officer is appointed by the
Central Govt. and Second Class official appointment is made by the Commissioner of Income Tax
who will work under the board and whose jurisdiction is decided by the board. Their powers and
functions are as follows:
1. Power to investigate and to present books as evidences to keep it in their custody.

(Section 137)
the income tax officer can search,
On authorisation by the director of commissioner
can
2.
and money balance for their hiding. (Section
place and can seize the documents/books 103 17 R. 579)
132 Jagmohan Mahazan US CIT (1976)
balance sheet and other books of
3 The Income Tax officer has the power to investigation
reason/Law under officer appointed (Section 132A),
accounts which is in any other
the procedure of the Act have power to detain property,
4 The Income Tax Officer for
(Section 132B)
5. The Income Tax officer under the
Act are the Olficers to call for relevant information etc
(Section 133)
buildings under his to investioate
The Income Tax officer has power to enter all
area to
6.
information. (Section 133A)
capture important
316 Income Tax Authorities

7. The Income Tax officer also have the power to check the registers of any conmpany, make
to take its copy. (Section 134)
signatures and
The Income Tax officer has the power to issue Permanent Account Number (PAN),
8.
(Section 139).
9. The Income Tax officer has powers of regular assessment on income particular provided

by the assessee. (Section 143)

10. The Income Tax officer in special condition have power to do Best Judvem
ment
Assessment. (Section 144)
11. If in the knowledge of Income Tax officer, if total income is exempted from assessme
then following the rules u/s 148 to 153 he has power to de re-assessment. (Section 147
12. The Income Tax officer has power to present book of Account before the assessmen..
(Section 142)
13. If there is any fault or mistake in order given them in case of knowledge, he has the
power to rectify the fault/mistake in four years after the relevant assessment year
(Section 154)
14. If as per the Income Tax officer deduction of tax at there is not to be made then by/on
application by the assessee the income tax officer can order for recovery of tax of source
at low rate or no recovery can also be ordered. (Section 197)
15. If the assessee has not paid advance payment of tax in a previous year and he is liable for
advance payment of tax then the Income officer betfore lst March/any time may
Tax
order and issue notice for advance payment of tax.
16. If any assessee has not made payment related to the relevant previous year the income tax
officer by way of tax recovery officer can do the recovery u/s 226. (Section 222)
17. If the assessee have made payment of tax more than the specified and then its refund will
be made by the Income Tax offices. For such týype of refund no type of claim is required
but if deduction of tax at source is made and assessee income is not taxable then he has to
make (recovery) for the tax refund. (Section 237)
18. If under the Income Tax under any proceeding on the assessee's appeal any amount is to
be returned then in this relation there is no need of application. (Section 240).
19. If the assessee has done mistake in audit of the account, presentation of documents on
order of the Income Tax Officer then for each and every mistake 10,000 amount of tax
payable will be taken as a penalty. [Section 271(b)]
20. Person getting deduction of tax at source has to take/apply TAN (Tax account numbers)
Trom the Income Tax Officer & have to quote TAN on each & every document
recorus
books etc. if such a mistake is made 7 10,000 will be imposed as penalty. (Sectnou
272BB)
Tax Recovery Officer
m
Dylax recovery officer we mean u/s 2(44) of the Income Tax Act, 196l a person
O T u e r or
recovery of Tax is given by the Chief Commissioner or CommisS oner. the
not make a payment of tax penalty etc. or fails to pay tnc29
officer af
liability,
rEcovering officer
recovering after preparing the certificate of due amount
by hisTax,
a n a 232 and under List-II provision Income sig penalty recoveiy
enalty recover
made.
 Income Tax Authorities I 317

Income Tax Inspector

Income Tax Inspector means a person u/s 2(28) of the Income Tax Act who is appointed u/s
117(1) by the Income Tax Commissioner, the Income Tax Inspector has to do all those work which
is asked by the Commissioner from time-to-time or by such Income Tax Officer or Assessing
Officer in whose subordianteship he is in.
Tax Assessment Officer
Under section 2(7A) of the Act by Tax Assessment officer we mean under section 117 the
person below appointed by the Central Government who have been instructed for tax assessment by
the board or any order of area/special tax assessment is given:
1. Additional Director/Commissioner,
2. Joint Director/Commissioner,
3. Deputy Director/Commissioner,
4. Assistant Director/Commissioner,
5 Income Tax Officer.
In the jurisdiction given by the board the tax assessment officer has the power to use all
powers in case of tax assessment, tax recovery, refund or penalty in case there are inspector of
Income Tax who work of the Tax Assessment officer.

Appealet Authority
There are judicial officials who are appointed by the Central Government. In case of any
then
proceeding of the Income Tax any of if not
order, decision, fine. penalty
any partyis
he can appeal at the Appealet Authority. In this relation the following authorities are appointed:
satisfied
1. Income Tax Commissioner (Appeals).
2. Additional Commissioner (Appeals).
3. Deputy Commissioner (Appeals).
1. Income Tax Commissioner (Appeals)
Commissioner (Appeals) means under
Under section 2(16A) of the Income Tax Act, 1961 the
such post by the Central Govenment and that who
the Act Section 117(1) a person appointed on
the board the work jurisdiction of then will be by the
will work under the Control and Direction of
order. On direction with which there is interference in the
board but the board will not order such
an

Appellate work.
Their powers are as follows :

the Act for search and investigate and it makes a person

1. The Authorities has power under
form of bookS of accounts civil procedure 1908 all
t or to present evidence in
is received. (Section 131)
power ofjudiciary
regard the stated in court matters. (Section 133).
2. Power to call for information
and register of compay m case wnere matters is stated in court
3 Power to receive copy
for investigation. (Section 134)
has to receive
4 If any amount is payable by the assessee and ne also any refund then
the refund.
from (Section 245)
amount payable will be adjusted
 318 Income Tax Authorities

5. In any other matters so stated the commission or (appeals) have been as below
1) If the assessee is not satisfied by their assessing officer then he may appeal at the
Commission (appeals) and then the Commissioner (appeals) may give order to the
tax assessing officer regard his order to re-decide the matter.
In case of penalty on an assessee against it he can appeal Commissioner (appeals).
(ii)
He may give order to the tax assessing officer regarding his order to re-decide the
matter.
(111) In case of penalty on an assessee against it he can appeal to Commissioner (appeals)
where it can be justified or he can cancel it on by revising it or may increase the

penaltyor decrease it but before increasing or decreasing the penalty the

may
assessee present his part.
will be given proper time to
(iv) Power to give any right decision related to appeal. (Section 251)
2. Deputy Commissioner (Appeals)
(19B) of the Income Tax Act, 1961 by Deputy Commissioner (appeals)
we
Under section
mean u/s 117(0) a person who is appointed by the Central Govemment on
that post and who work
the board but the
under the Control & Direction of the board the jurisdiction of which to be stated by
In these
board will not issue any order or directions with which its appealite authority is hampered.
sections 131. 133, 134 and 25l in relation
power function those provisions are there which are under
with Commissioner (appeals).
CERTAIN SPECIAL POWERS

I. Regarding Discovery and Evidence

1. Section 131(1) : The Chief Commissioner. Commissioner (appeals), Joint Commissioner,
Assistant Officer have powers from Code of Civil
Deputy Commissioner (appeals) and Tax
procedures (1908) which are:

1. Search and investigation.

presence and oath on basis of
2. Along with an officials banking Co. and person's physical
statement.
other documents.
3. To present the books of accounts and
4. To issue Commission.
have reasons that in their jurisdiction any person or
2. Section 131(1A): If the below officers the
in relation with investigates may use all
of persons have evaded any income then (he)
group under any income the officer of list:
above powers, however any proceeding in such matter is
1. Director-General 2. Director
3. Joint Director 4. Assistant Direct

5. Deputy Director 6. Authorised Authorities u/s 132(1).

authorities think fit below then they
ection 131(3) : Along with that of the below stated
can take the documents and books of account under their own custody
1. Director-General/Chief Commissioner
2. Director/Commissioner (Appeals)
3. Joint Director/Joint Commissioner (Appeals)
 Income Tax Authorities I 319

4. Deputy Director
5. Assessing Officers/Deputy Commissioner (Appeals)
6. Tax Assessing Officer
7. Authorised Authority u/s 132(1).
But Joint Director, Deputy Director or Tax Assessing officer should have to give reasons
regarding and it is to be kept for more than 15 days then permission from Chief Commissioner or
Commissioner beforehand is to be taken.
I1. Regarding Search and Seizure (Section 132)
If the Director-General or Chief Commissioner or Director or Commissioner or Joint Director
or Joint Commissioner approved by the board have reasons to belief on the information that:
1. Any person to whom u/s 131(1) Summon or u/s 142(1) information for books of accounts
or other documents he has failed to present it.
2. Any person to whom along summon or information served or is to be served and who
will not deposit the documents and books of accounts for investigation.
3. Such a person who have some gold, silver ornaments or wealth which have not been fully
or partly declared or is not to be declared.
Can appoint the subordinate officials for the below works:
(a) If the stated officers (in relation to (3)) have reason to believe then he can enter any
place, building, vehicle, ship, Aeroplane etc. can do search in such a case where there is
no keys and can break any box, almirah, safe, door etc.
(b) If the investigation officer have reasons to believe that a person had hidden any book or
documents stated in item no. (3) then such a person who has entered building, place.
vehicle, ship, aeroplane etc. or have left it or is entering, he can check him, can seize the
item so revealed (Kchose u//s Sab-Thangat 1980) 23 TIR S.C.).

(c) If a person have books of accounts or any other document or electronic items under
Information Technology Act, 2000 u/s 2(01) then he can also check that.
(d) He may make sign on the documents and books of accounts and take a copy of that.
(e) He can make a list of the above searched items but if that document is in form of business
stock then it will not be seized.

(f) The Authorized authority may call the police of any official of the Central Government
for his help.
due to those weights it cannot be seized then the
(g) If the goods searched is harmful or
person in whose custody goods are there, he may instruct that is not to transfer those
assets without permission.
(h) During search and seizure the books of accounts of documents in whose custody is found
or items declared in item no. (3) their weight which will act as a proof along will that it
will be considered that the in form of those documents are right and in transfer whose
have is written he is the actual owner.
320 I Income Tax Authorities

III. Regarding Books of Accounts (Section 132-A)

If books of accounts. documents or precious items which have been escaped and is important
of an officer then the
in relation with the proceeding of the income tax act and is under the custody
can ask such documents and books of accounts and can provide
it. Section 133-
authorized authority
B. the property seized cannot be clubbed of tax purpose.

[Link] Call for Information (Section 133)

Commissioner
For the proper function of the Income Tax Act the Commissioner, Deputy
Commissioner may ask for the below
(appeals). Joint Commissioner, as well as Tax Assessment
information
1. Any firm partner name, address and profit/sharing rates.
From any Hindu Undivided Family name of Karta, members and their addresses.
when work
From any Trust or Agent name and address of such persons from
is
3.
authorised.
4. From any assessee names, addresses of those persons to whom he has paid
1,000 or

more in form of rent, interest, commission, royalty etc.

to whom
5. From any person as a agent, dealer's names and addresses of those persons
transfer of securities is done, name and orders where transfer of securities are made any

receipt or payment made for etc.

officers-any such infor
6. From any person, Banking Company, Cooperative book or
mation or documents which is important for under the Act.
will not be
If under the act any proceeding is not pending then under section use of power
179 Tax
done without approval of director or commissioner (Cooperative Bank Ltd. Vs CIT 2003,
man 335).
V. Regarding Survey (Section 133A)
1. The income tax officials (Commissioner, Joint Commissioner, Director, Assistant
Director, Deputy Director, Tax Assessing Officer and Tax Recovery Officer can
enter
with
including business and profession) any place or area under their jurisdiction along
that also enter in a place of business or professions of a person in their jurisdiction apart
from that any other place stated by the Income Tax officials.
Can enter a place for investigation in case of business provinces betfore the sunset and
after sunrise.
Can ask for the books of accounts and other documents for verification from the owner of
3
business of profession/employees for from any other person and may make sign and can
take a copy of it.
4. On the place of verification may give the order for the investigation of Cash, Stock and
other important documents etc. can may make a list.
take a
statement of any person for the proceeding under
the Act and may give order
.May
to provide other information.
6. Under the Act the Search officer cannot reveal the Cash, Stock or other valuable
close that place and seal it lShyam
documents from the place of survey & neither can

Jewellers Vs. Chief Commissioner (1990) TLR 696].

Inrormation of expenses on household, ceremonies, events is receive then afterwards

stated from assessee be taken

or any other person can
 Income Tax Authorities I 321

Information
(Section 133
Certain Commissioner,
Assistant Director, Deputy Director Tax
officers (Joint call the relevant information
arding o ffico
under their act to
specified officers)
tax
x

[Link] Income I n c o m e

Assessment Officer
he Offi or can enter any place where business/profession is
specified area
Assessmer i s d i c t i o n or in
place the officer may ask to
their
in hours. From this
c a r r i e d .

can
enter at business employees.
lace they documents from the owner or
t h a t pla« ooks,
At information, (Income-tax ial)
official) cannot
cannot replace any
replace any
2
relevant informati

relevant the
information provides
items.
Section
Secti
a c c o u n t s o r any
other precious
der
Under this
this
books of
3 cash stock, d o c u m e n t ,
THEORETICAL QUESTIONS|
their
Income Tax Act, 1961 ? Explain
under the Bareilly 2011)
(LU2010, BHU 2011,
described
authorities

What are the various

1 ?
Functions
Powers and (LU2011)
the following:
on Taxes.
. Write notes of Central Board
of Direct
Function
() Powers and their power and
Functions.
Officer and Powers and
Functions.
(i) Tax Assessing and their
Commissioner (appeals)
(11) Income Tax Tax Act,
1961:
provisions of Income
. Describe the
Evidence.
(LU2011)
Discovery and
(i) Regarding (LU2011)
Seizure
() Regarding Search and of Central Board
powers
Gii) Regarding Survey. Explain the Agra
2010)
income tax
department. 2008, 2010:
(LU
authorities of the which these
can

ne in
of circumstances

of Direct Taxes. Seizure' ? Explain the

of search
and
seizure.

(LU 2009)
'Search and in respect
mean by
officers
authorised
be cond Wnat are the powers
of
of
conducting
objectives (LU 2008)
Give the
?
6. Tax 'Surveys'
in this regard. ?
What are the different types of
Income
of the
authority
of
mistakes

such limitations rectification (LU 2008)

1. survey Explain
dnthethe rights and in respect of
What
What
arethe
the provisions«of Income
are Tax Act,
1961
regarding
search

provision
the provisi0
the E (LU 2015)

8. Taxes
T axes
Explain
? Explain
What do you Direct
of D irect

survey
meanby Central Board
and also differentiate them.
Survey