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]