Income Tax Act, 1961 is the main law dealing with Income Taxes in India. There are several rules made under this Act and are collectively known as Income Tax Rules, 1962. Like any other law, this Act and rules also require authorities to regulate it. These authorities are defined under the Income Tax Act, 1961. Let’s take an overview of these sections dealing with Income Tax Authorities in India.
Below Sections deal with Income Tax Authorities –
Section 116 – Income Tax Authorities
Section 117 – Appointment of Income Tax Authorities
Section 118 – Control of Income Tax Authorities
Section 119 – Instructions to sub-ordinate authorities
Who are Income Tax Authorities?
If we read above sections, we find that this Act has defined following as classes of Income Tax Authorities –
- The Central Board of Direct Taxes (Commonly known as CBDT)
- Principal Directors-General of Income Tax or Principal Chief Commissioners of Income-tax
- Directors-General of Income Tax or Chief Commissioners of Income Tax
- Principal Directors of Income Tax or Principal Commissioners of Income Tax
- Directors of Income Tax or Commissioners of Income Tax or 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 or Joint Commissioners of Income Tax
- Deputy Directors or Deputy Commissioners of Income Tax
- Assistant Directors or Assistant Commissioners of Income Tax
- Income Tax Officers
- Tax Recovery Officers
- Inspectors of Income Tax
In this Act, there are references to other classes which are among these above classes. For example, Section 2(7A) – Assessing Officer defines Assessing Officers as –
- Assistant or Deputy Commissioners, or Assistant or Deputy Directors;
- The Income tax officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under section 120 (1) or (2) or any other provision of the Act; and
- The Additional Commissioners or Directors, or Joint Commissioners or Directors who are directed under section 120(4)(b) to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer.
Central Board of Direct Taxes (CBDT)
It is a statutory body constituted under the Central Board of Revenues Act, 1963. Its members are appointed by Central Government for the performance of duties entrusted by Board. It functions under the jurisdiction of Ministry of Finance. It is the highest executive body to govern Income Tax Authorities. It exercises its power to control and regulate the Income Tax Authorities. Under the Income Tax Act, 1961, it is entrusted with certain powers. Subject to control and approval of Central Government, it can issue rules under the provisions of Income Tax Act. All the rules are framed by Board under section 295 and are placed before the Parliament. Also, the Board has been empowered under section 119 to issue instructions and circulars to its subordinates. All such authorities have to comply with CBDT instructions and circulars. But, CBDT is not empowered to issue instructions for assessment of a particular case or to interfere with the discretions of commissioners (appeals).
In appropriate matters, Board can relax provisions of sections 115P, 115S, 139, 143, 144, 147, 148, 154, 155, 234A, 234B, 234E, 271 and 273. A brief heading of these sections are given below –
| Sections | Heading of Sections |
| 115P | Interest Payable for non-payment of tax by domestic companies |
| 115S | Interest payable for non-payment of tax on distributed income to unit-holders |
| 139 | Return of Income |
| 143 | Assessment of Income |
| 144 | Best Judgement Assessment of Income |
| 147 | Income Escaping Assessment |
| 148 | Issue of notice where income has escaped assessment |
| 154 | Rectification of mistake apparent on record |
| 155 | Other amendments relating to assessment of income |
| 201(1A) | Interest for non-deduction of tax or non-payment of tax after deduction by such person/principal officer/company, as the case may be |
| 210 | Payment of advance tax by the assessee of his own accord or in pursuance of order of Assessing Officer |
| 211 | Installments of advance tax and due dates |
| 234A | Interests for default in furnishing return of income |
| 234B | Interests for default in payment of advance tax |
| 234C | Interest for deferment of advance tax |
| 234E | Fee for failure to deliver the statement of deduction of tax at source under section 200(3) and for failure to deliver the statement of collection of tax at source under section 206C(3) within the prescribed time |
| 271 | Penalty for failure to furnish returns, comply with notices, concealment of income, etc. |
| 273 | Penalty for false estimate of, or failure to pay, advance tax |
The Central Government can appoint such persons as Income Tax Authorities as it may be required. It can further define that such person is subordinate to such classes of authorities. It may also authorize the Board or a Principal Director or Director-General, a Principal Chief Commissioner or Chief Commissioner or a Principal Director or Director or a Principal Commissioner or Commissioner to appoint income tax authorities below the rank of an Assistant Commissioner or Deputy Commissioner.