Power and functions of Income Tax Authorities

THE POWER AND FUNCTIONS OF INCOME TAX AUTHORITIES:

CBDT:

1. The board can declare any association whether incorporated or not and whether Indian, or Non Indian as company under the provision of Section 2(17)

2. The board has power to determine the jurisdiction of various authorities mentioned in this act. (Section 118)

3. The board may issue directions for the exercise of powers and performance of the functions by all or any of these authorities. While issuing such direction the Board will keep in mind any of the following criteria such as: territorial area, persons or classes of person, incomes or classes of incomes and cases or classes of cases. (section 120(1) and (3)

4. The board may authorise by general or specific order, director general or director to perform the powers of any of the income tax authorities. (section 120)

5. The board may authorise any of the authorities to exercise its power concurrently with any pother authority. In case such notification is issued by the board, the lower authority in rank shall exercise such powers as are directed to it by higher authority. (Section 120 (5))

6. The board may empower director general or chief commissioner or commissioner to authorise deputy commissioner or deputy director to exercise the powers of assessing authority in respect of any specified area, person, incomes or cases or class of persons, class of income or class of cases. (Section 120 (4))

7. To carry out the different provisions of the Act the board makes for whole of India (section 295)

8. The CBDT has been empowered by taxation laws (amendment) Act 1975 to make rules regarding the maintenance of accounts and documents required under section 44AA. It is obligatory for professionals to maintain such books and documents as may enable the Assessing officer to compute his total income.

9. The board has the power to make rules and issue orders, instructions, directions etc, to all the persons employed for proper and efficient administration of the act but the board cannot issue orders, directions etc of the following manner:
(a) To require any income tax authority to make a particular assessment or to dispose of a particular case in a particular manner.


(b) To interfere with the direction of the Deputy Commissioner of Income tax in the exercise of his appellate functions. 

DIRECTOR GENERAL/CHIEF COMMISSIONER OF INCOME TAX

The CBDT may be general or special order and subject to such conditions, restrictions or limitations, authorise any Director or Chief Commissioner to perform such function of any other income tax authorities as may be assigned to him in such order. Its powers are given below:

1. The director general or chief commissioner may be empowered to authorise a deputy commissioner to exercise the powers of an assessing officer in respect of a person, case, income or an area.

2. These authorities may be empowered by the board to appoint income tax authorities below the rank of an assistant commissioner.

3. These authorities may, after giving the assessee a reasonable opportunity of being heard in the matter, and after recording his reasons, transfer the case from one assessing officer subordinate to him.

4. The director general or director or any other officer so authorised, may exercise the powers of Assessing officer, in case he has reason to suspect that any income has been concealed or is likely to be concealed by an assessee coming within his jurisdiction.

COMMISSIONER /DIRECTOR /ADDITIONAL DIRECTOR OF INCOME TAX

Powers:

1. Under the direction of the board a commissioner may exercise the powers of an Assessing Officer.

2. A commissioner has the power to transfer any case from one or more Assessing Officer subordinate to him to any other Assessing Officer or officers also subordinate to him. He can do only after giving the assessee an opportunity of being heard and after recording the reasons for doing so.

3. The commissioner has been empowered to grant approval for an order issued by the Assessing Officer asking a non-company assessee to get its accounts audited from a Chartered Accountant.(Section 142 (2A)).

4. The prior approval of the commissioner is required fir reopening of an assessment beyond the time limit of 4 years.

5. The commissioner has the power to revise any other issued by ITO and not covered under section 263 either of his own motion or on application by the assessee for such revision (Section 264).

JOINT COMMISSIONER/JOINT DIRECTOR OF INCOME-TAX

1. He is empowered to accord sanction to levy additional income tax on companies in which public are not substantially interested.(Section 107)

2. He may be authorised by the board or chief commissioner to exercise the powers of assessing officer.

3. He has the power to cancel the registration of a firm which is not a genuine firm Section 186(1).

4. He has the power to issue instruction to assessing officer to revise an order issued by ITO if he has received an application from assessee regarding a pending case.(Section 144 A)

ASSESSING OFFICER

Assessing officer shall exercise the following powers:

1. Power of civil court: These authorities shall have the same powers as are vested in a court under the code of civil procedure 1908, when trying a suit in respect of the following matters:
         (i) Discovery and Inspection 
         (ii) Enforcing the attendance 
         (iii) Compelling a person to produce books of accounts and
                other documents and 
         (iv) Issuing commissions. (Section 131)

2. Powers of Search and seizure: These authorities shall have the power of searching any building, place, vessel, vehicle and seize books of accounts, other documents, money. jewellery or other valuable articles or things. Identification marks shall be put on the seized articles and an inventory shall be made. (Section 132)

3. Power of Assessment: An assessing officer or any other authority acting as assessing officer shall have following powers while performing his functions:
    a. Power regarding self assessment as mentioned in section 140A
    b. Power of making regular assessment under section 143 and
        best judgement assessment under section 144.
    c. Power to reopen an assessment under section 146
    d. Power to reopen an assessment in case income has escaped
        assessment under section 147 and 148 .
      e. Power to treat a person as an agent under section 163.

4. Power to call for information: The aforesaid authorities have the power to call for necessary information from a firm and HUF.

5. Power of Survey: Under section 133A, an income tax authority may enter any place where business or profession is carried on, if such place is within the limits of the area assigned to him or is occupied by any person in respect of whom the Assessing officer exercises jurisdiction (Section 133A).

6. Power to inspect registers of companies: The above mentioned authority may inspect if necessary, take copies or cause copies to be taken of any register of members, debenture holders, mortgagees of company or any entry in such register.


INCOME TAX INSPECTOR

They are appointed by chief commissioner or commissioner of Income Tax and are subordinate to Assessing officers. They assist Assessing Officers in performance of their duties. They may be directed to perform any other function by general or specific order.