Direct tax law��TOPIC- FUNCTIONS AND POWERS OF INCOME TAX AUTHORITIES � ��

Powers of central board of direct taxes

• Power to make rules: it has the power to make rules u/s 295 for the purpose of this act for whole or a part of India and with the approval of parliament.
• Power to issue instruction and direction: it has the power to issue direction to the persons working in the execution of the act but it can not give direction to commissioner or assessing officer to make a particular assessment in a particular case. Section 119(1A)

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• Power to relax mandatory provision: board has the power to relax the provision relating to the deduction of tax at source or payment of such tax or payment of advance tax or computation of total income and deduction to be made in computing income in case of genuine hardship.
• Power to authorize income tax authorities to accepts belated application (Section119(2)): board has the power to accept belated application in a certain cases with a genuine hardship.
• Power to decide jurisdiction (section 120): board has the power to decide jurisdictional matter of any income tax authorities and can assign them their functions.

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• Power to declare company: board has the power declare any organization to a company.
• Power to direct higher authorities to perform function of lower authorities: board has the power to direct higher in rank authority to perform the functions of lower authorities.
• Power to authorize direct general or chief commissioner(Section 120(4)): board has the power to empower director general or chief commissioner to authorize deputy general or commissioner to work as a assessing officer in a particular cases

• Power to make rules regarding a maintenance of accounts and documents u/s 44A: board has power to make rules regarding the maintenance of accounts and documents in such manner so that assessing officer can properly count tax.
• Powers to appoint staff (section 117(2)): board has the power appoint staff of income tax authorities under the rank of deputy commissioner if enable by the central government.
• Power to authorize income tax authorities for search and seizure: board has the power to authorize any additional commissioner or director to carry out search and seizure u/s 132.

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• Power to authorize income tax authorities to appoint staff (section 117(3) ) : it may authorize any income tax authorities to appoint required executive or ministerial staff to assist it in the execution of its function.
• Concurrent jurisdiction section 120 5: the board mar require two or more assessing officers to function concurrently . In such case the lower authority shall exercise such power as may be directed to its higher authority.
• Power to disclose information section (138): the board may disclose information regarding to any asseessee any officer under any tax law relating to the imposition of any tax, duty relating to foreign exchange management act 1999. if it consider as such disclosure is in public interest

• Power to direct exclusion income (u/s 11(1) (c):the board may direct the income from property held under trust shall not be included in the total income of recipient.
• Power to detain books of accounts and other documents [ section 132 (10) ]: the board is empowered to entertain application of objection regarding detention of books of accounts and other documents.

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Director General, Chief Commissioner and Commissioner

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Appointment: The central government may appoint such persons as it think fit to be the Director General, Chief Commissioner and Commissioner of income Tax.

Funtions: The C.B.D.T may by general or special order and subject to such conditions, restrictions or limitations, authorise any Director General, Chief Commissioner and Commissioner to perform such functions of any income-tax authority as may be assigned to him in such order.

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Powers of Director General, Chief Commissioner and Commissioner

• Power to appoint income tax authority (Section 117): If so authorised by the central government, they may appoint an income tax authority below the rank of Assistant Commissioner or deputy commissioner.
• Power to appoint staff: They may appoint required executive or ministerial staff to assist them in execution of their functions.
• Delegate powers of Assessing officer to Joint commissioner (Section 120): If they authorised by the board, they may delegate the powers and functions of assessing officer to joint commissioner.

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• To transfer cases (Section 127): They may transfer any case from one or more assessing officer to another subordinate to them.
• Enquiry into concealment [Section 131(1A)]: If they suspect that any income has been concealed, or is likely to be concealed by a person within their jurisdiction, they may make any enquiry or investigation relating to thereto.
• Search and seizure[ Section 132(1)]: They may authorise any deputy director, Deputy Commissioner, Assistant Commissioner or assessing officer to enter and search any building, place, vehicle etc. and seize books of accounts, other documents, money other valuable articles or thing found as a result of such search.

• To make any enquiry (Section 135): They are competent to make any enquiry under this act.
• Disclosure of information (Section 138): Where a person makes application to commissioner in the prescribed form for any information relating to any assessee in respect of any assessment, he may furnish the information asked for in respect of that assessment if it is satisfied that such disclosure is in public interest.
• To sanction reopening of assessment [Section 151(2) ]: They have power to sanction reopening of the assessment of an income which has escaped assessment after the expiry of four years from the end of the assessment year.

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• To approve with holding of refund (Section 241) : Where any proceeding is pending against the assesses, they may authorise the assessing officer to withhold the refund till such time as the chief Commissioner or Commissioner may determine.
• Set off refund against arrears of tax (Section 245): They are empowered to set off the amount of refund or any part thereof due to any person against the arrears of tax due from such person.
• Direct the assessing officer to prefer appeale to the tribunal against the order of commissioner (appeals) [Section 253(2)]: The commissioner may, if he objects to any order passed by a commissioner (appeals), direct the assessing officer to appeal to the Appellate tribunal against the order.

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• To Revise any order passed by assessing officer (Section 263): The commissioner me revise any order passed by the assessing officer which is prejudicial to the interest or revenue.
• Revision of any order passed by subordinate authority (Section 264): The commissioner may revise either on his own motion or on a application made by the assessee any order passed by any authority subordinate to him.
• To reduce or waive the penalty (Section 273 A): The commissioner may reduce or waive the penalty imposed on a person under section 271(1)(iii) for concealment of income.
• To sanction attachment of property (Section 281B): They may sanction the attachment of property of an assessee if it is in the interest of revenue.

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Assessing officer / Income tax Officer

• The assessing officer is the most important authority in the organization. Structure of income tax department. He is the primary authority to initiate assessment proceedings and make assessment.
• He is the first authority with whom the assessee has to come into contact and make assessment
• He initiates the assessment proceedings against the assesssee and issue a notice of demand ,if any tax is payable by the assesssee.
• The assessment order passed by him is final unless an appeal is preferred against it by the assesssee.

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POWERS OF ASSESSING OFFICER

He has sweeping powers under various sections of the act .some of his powers are :

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 following matters :
1. Discovery and inspection .
2. Compelling a person to produce books of accounts and other documents .
3. Enforcing the attendance of any person including any officer of a banking company and examining him under oath.
4. issuing commissiones. (Section 131) .

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2 powers of search and seizure : The authority have the power of searching any building , place, vessel, vehicle or aircraft and seize books of accounts , other documents, money, bullion , jewellery, and other valuable articles and things. The identification Mark’s shall be put on the seized articles and an inventory shall be made . ( Section 132)

The books of accounts and Other seized documents shall not be retained by authorities for the period exceeding 180 days from date of seizure unless for the reasons recorded , the approval of the chief commissioner is obtained. The extension cannot be granted beyond 30 days in case of books relating to the year to Which they are relevant . (Section 132(8)).

The assets so seized shall be retained by assessing officer in his authority and shall be applied towards recovery of existing and estimating tax liability of assesssee.

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3 power of assessment : The assessing officer or any other authority who is acting as assessing officer shall have some powers while performing his functions :

• Power regarding self assessment .
• Power to reopen an assessment under section 146.
• Power to treat a person as an agent under section 163.
• Power to assess a person leaving India under section 174 and income of person trying to alienate his assets under section 175.
• Power of making regular assessment under section 143 and best judgement assessment under section 144.

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

They can ask the assesssee to furnish a statement of names and addresses of all the persons to whom he has paid in any previous year rent, interest, commission, royalty etc. Amounting to more than rs 1000 or such higher amount as may be prescribed together with particulars of all such payments.

The assessing officer can ask any person including a banking company or an officer to furnish information relating to the such points and matters or to furnish statement of accounts and affairs verified in prescribed manner . Section (133).

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5 power of survey : under section 133 A , an income tax authority may enter any place where business or profession is carried on , if such place is within the limits of area assigned to him or is occupied byany person in respect of whom the assessing officer exercises jurisdiction. Section 133A.

The income tax authority may require the person attending the business or profession to afford necessary facilities to inspect books of accounts or documents , and to check and verify the cash, stocks and other valuables which may be available at place. (133A(1)) the income tax authority may enter any place only after sunrise and before sunset. Section 133 A (2)

The income tax authority may ask a person to submit the necessary information relating to the expenditure incurred in a particular ceremony or event.

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6 power to inspect register of companies : section 134 the previous mentioned authorities , may inspect, if necessary , take copies or cause copies to be taken of any register of members, Debenture holders, mortgages of company or of any entry in such register .

7 To delegate his powers to joint comissioner : Where they are so authorized by the board , they may delegate His Powers and functions to Joint commissioner.

8 disclosure of information respecting assesssee: (section 138 ) where a person makes an application to chief commissioner in prescribed form for any information relating to any assesssee , in respect of any assessment , he may furnish the information asked for in respect of that assessment if he is satisfied that such disclosure is in public interest .

9 To make an enquiry : ( section 135) : He is competent to make any enquiry Under this act.

10 Any tax authority Shall not : impound any books of accounts or other documents without recording his reasons for doing so.

Any such books or Documents retain in his custody for period exceeding Fifteen days ( exclusive of holidays) Without obtaining the approval of chief commissioner .

CONCLUSION:

It is believed that income tax –authorities are independent judicial officers who are required to pass reasoned orders based on their own reasoning un-influenced by instructions or advice from their superior officers . There is still a need to further define and redefine and implement the extent to which income tax authorities are required to exercise their powers and perform their functions so as to prevent harassment of assesses , tax- evasion , unnecessary discrimination in collection of tax and to help assesses effectively manage taxes.

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