TAX ADMINISTRATION AND POWERS

Income tax is the basic and most revenue producing tax system in India. So their should be clear cut and prescribed tax system for income tax and their should be very well defined tax authorities also for administrating the entire tax system. In India there is a very good tax authority system starts from the apex level that is from CBDT to the lowest level of inspectors. Each level of this authority consists of well defined functions and its own powers. The tax authorities are binding courts also for cases to their assesses. There are powers like requisition of books of accounts, search and seizure, reassess the escaped income  etc.. are the examples of powers vested in hands of income tax authority ,we are now going through this powers of income tax authority through this assignment.   

Data content

Income tax authorities are the apex rulers of present Indian income tax system. According to section 116 the following income tax authorities have been constituted under the act to discharge executive and administrative functions:

§  The Central Board of direct Taxes

§  Director general of income tax or chief commissioner of income tax

§  Directors of income tax or commissioners of income tax

§  Commissioners of income tax (appeals)

§  Additional Directors of income tax or additional commissioners of income tax or additional commissioners of income tax (appeals)

§  Joint Directors of income tax or joint commissioners of income tax

§  Deputy directors of income tax or deputy commissioners of income tax or deputy commissioners of income tax (appeals)

§  Assistant directors of income tax or assistant commissioners of income tax

§  Income tax officers

§  Tax recovery officers

§  Inspectors of income tax

Central Board of Direct Taxes (119)

It was constituted under the Central Board of Revenue Act , 1963 . It works under the ministry of finance . The act has assigned main powers and functions in sections 2(17), 2(18), 11(1) (c), 35(3), 35D

(3) and so many sections. The basic powers of CBDT are simply listed below:-

§  Instructions to subordinate authorities: from time to time the board may issue such orders, instructions and directions to other income tax authorities as it may deem fit for the proper administration of the act.

§  Orders issue by way of relaxation of certain provisions under section 119(2) (a) in certain cases.

§  Orders giving extension of time limit (119(2)(b))

§  Orders giving relaxation for claiming deduction under section 119(2)(c)

Director General/director

Director General /director, appointed by the central government, are required to perform such functions as may be assigned by the CBDT. The director general/director enjoy the following powers under different provisions of the act:

·       To give instruction to income tax officers

·       To enquire or investigate into concealment

·       To search and seizure

·       To requisite books of accounts

·       To survey

·       To make an enquiry

Commissioners of income tax

Commissioners of income tax are appointed by the central government. Generally, they are appointed to head income tax administration of specified area. As head of administration, a commissioner of income tax enjoys the following administrative as well as judicial powers and functions under the different provisions of the act:

·       Powers pertain to registration of a charitable trust or institution (12A(a))

·       Approval of an annuity contract (80E)

·       Appointment of income tax officers (Classii)

·       Appointment of inspectors (117(2))

·       Instruction to subordinate authorities (119)

·       Shifting of jurisdiction (125)

·       Transfer of cases (127)

·       Assignment of functions to inspectors of income tax (128)

·       Discovery , production of evidences (131)

·       Search and seizure (132)

·       Requisite books of accounts (132A)

·       Any enquiry (135)

·       Disclosure of information respecting assessee (138)

·       Granting sanction for issue of notice to reopen assessment after the expiry of four years (151(2))

·       Authorizing income tax officers to recover any arrear of tax due from an assessee by distrait and sale of his movable property (226(5))

·       Sett off of refunds against tax remaining payable (245)

·       Directing the assessing officer to prefer an appeal to Appellate Tribunal against the order of the commissioner (appeals) (253(2))

·       Appeal to high court (260A)

Etc…

Commissioners (Appeals)

Commissioners of income tax (Appeals) are appointed by the central government. It is an appellate authority vested with the following judicial powers:

·       Power regarding discovery , production of evidence , etc. (131)

·       Power to call for information (133)

·       Power to inspect registers of companies (134)

·       Powers to set off refunds against tax remaining payables (245)

·       Power to disclose of appeals

·       Power to impose penalty

Joint commissioners

Joint commissioners are appointed by the Central Government. The main function of this authority is to detect tax evasion and supervise subordinate officers. Under the different provisions of the act, the joint commissioner enjoys the following powers, namely;

·       Instruction to the assessing officers (119(3))

·       Powers regarding discovery, production of evidence (131)

·       Search and seizure (132)

·       Power to call for information (133)

·       Power to survey (133A)

·       Power to inspect registers of companies (134)

·       Power to make an enquiry (135)

·       Grant approval to the concerned assessing officer to impose penalty (274)

Income – tax officers

While income tax officers of Class I services are appointed by the central government, income tax officers of Class II services are appointed by the commissioner of income tax. The powers are summarized below:

·       Discovery and production of evidence (131)

·       Power regarding search and seizure (132)

·       Power to requisition of books of accounts (132A)

·       Application of retained assets (132B)

·       Power to call for information (133)

·       Power of survey (133A)

·       Power to inspect registers of company (134)

·       Allotment of PAN account number (139A)

·       To make assessment (143 and 144)

·       To reassess escaped income (147)

·       Rectification of mistakes (154)

·       To demand advance payment of tax (210) etc…

Inspectors of income tax

Inspectors of income tax are appointed by the commissioner of income tax. Inspectors of income tax have to perform such functions as are assigned them by the commissioner or any other authority under which they are appointed to work.