Income Tax Authorities

Sec 116 of Income Tax Act provides for the administrative and judicial authorities for administration of Income Tax Act. Implementation of the Act lies in hands of these authorities. Authorities have been divided into 2 groups:
Administrative Assessing Officer

CBDT
It is the highest authority in the administrative set up of the Income Tax department. The Board functions under the control of Ministry of Finance, Govt. of India. Central govt. appoints its members and can increase number upto 5. At present there are 4 members besides Chairman.

Powers of the Board

The Board can declare any association whether incorporated or not, whether Indian or not, as company u/s 2(17) The Board has power to determine jurisdiction of various authorities. The Board may authorise by general or specific order , Director General to perform powers of any income-tax authorities.

 Board has been empowered by the Taxation Laws to make rules regarding maintenance of accounts and documents required u/s 44AA. In order to carry out different provisions of the Act, Board makes rules for whole of India.

 The Board has power to make rules and issue orders, instructions, directions etc. to all the persons employed for proper and efficient administration of the Act. It may require two or more Assessing Officers to function concurrently.

Director General/Chief Commissioner of Income tax

Appointed by Central Govt. He can transfer any case from one AO subordinate to him to another AO subordinate to him. He is empowered by the Board to take all steps regarding search and seizure u/s 132. He may order requisition of books of account or any property which is in the possession.

 He is competent to make enquiry under the Act. For this purpose he will have all the powers that an AO has under this Act in relation to making such enquiries. The order of AO to withhold refund is approved by Chief Commissioner. He may waive a penalty imposed on person u/s 271(1).

Commissioner/Additional Commissioner of Income Tax

Appointed by Central Govt. He may exercise the powers of AO. He has power to transfer any case from one or more Assessing Officers subordinate to him to any other Assessing Officers subordinate to him. He can grant approval of an order issued by AO asking non-company assessee to get its accounts audited from Chartered Accountant.

 The prior approval of Commissioner is required for reopening of Assessment beyond time limit of 4 years. He has power to revise an order passed by AO, if it is erroneous or prejudicial to interests of the revenue.

Joint Commissioner / Joint Director of Income Tax

Appointed by Central Govt. He is empowered to accord sanction to levy additional income tax on companies in which public are not substantially interested. He is authorised by Board to exercise powers of AO. He has power to cancel registration of a firm which is not a genuine firm.

 He has power to issue instructions to AO to revise order issued by ITO if he has received an application from assessee regarding pending case.

Assessing Officer
The Assessing Officer is the most important authority in the organization structure of Income Tax department. He is the prime authority to initiate assessment proceedings and to make assessment. He is the only authority to collect tax. He is the authority which comes in contact with public.

Powers of Assessing Officer

1. Power of Civil Court [Sec 131] AO has same powers as vested in court under Code of Civil Procedure 1908 in respect of following matters: Discovery and Inspection Enforcing the attendance of any person and examining him on oath Compelling a person to produce books of accounts and other documents Issuing Commissions.

2. Power of Search and Seizure [Sec132] Has power of searching any building, place, vessel, vehicle or aircraft. Has power to seize any books of accounts and other documents, money and valuable articles. Identification marks shall be put on seized articles and an inventory is made. Books of accounts and other documents shall be retained for more than 180 days.

3. Power of Assessment Power regarding self-assessment u/s 140A Power of making regular assessment u/s 143 and Best judgement assessment u/s 144 Power to reopen assessment u/s 146 Power to reopen assessment in case income has escaped assessment u/s147 and 148 Power to treat person as an agent u/s 163

4. Power to call for Information Power to call for information from firm and HUF. Can ask an assessee to furnish a statement of names and addresses of all the persons to whom he has paid rent, interest, commission, royalty or brokerage amounting to Rs.1,000 or more.

5. Power of Survey He can enter any place within his jurisdiction where any business or profession is carried on. He can inspect books of accounts or documents available at that place. He can check and verify cash, stocks or other valuables available at that place u/s 133A.

6. Power to Inspect registers of the companies He may inspect, take copies of any register of members, debenture holders of company or of entry in such register.

Income Tax Inspector

Appointed by Chief Commissioner or Commissioner of Income Tax. They assist Assessing Officers in performance of their duties. They may be directed to perform any other function by general or specific order.

POWERS OF INCOME TAX AUTHORITIES RELATING TO SEARCH AND SEIZURE [Sec132]