Direct taxes -1 (unit _5----Tax administration)

                Direct taxes  Unit -5 ( Tax  administration )

Income tax authorities  :

        The government of india has organised a number of authorities to execute the income tax act and to administer the income tax dept efficiently.

       The central board of direct taxes is the apex body in the direct tax setup. It performs various statutory functions under the various acts and is responsible for formulation and implementation of policies relating to direct taxes administration.

    The following classes of income tax authorities purposes of the income tax act :

1. The central board of direct taxes
2. Commissioner of income tax
3. Income tax officers
4. Chief commissioner of income tax
5. Directors of income tax
6. Additional directors of income tax
7. Deputy directors of income tax
8. Assistant directors of income tax
9. Income tax inspectors
10. Tax recovery officers.

Assessing officer :  An assessing  officer means the assisstant commissioner or deputy director or deputy commissioner or assisstant director of the income tax officer who is vested with the relevant jurisdiction by virtue of directions or orders issued by the central board of direct taxes and it also includes the aditional commisioner or joint director who is directed to exercise or perform all or any of the powers and functions conferred on or assigned to an assessing officer.

Commissioner : Sec.2(16) means a person appointed to be a commisioner of income tax or a director of income tax or a principal commissioner of income tax or a principal director of income tax.

Director- General or director : sec.2(21) means a person appointed to be a director- General of income tax or a principal director general of income tax or a director of income tax or a principal director of income tax and includes a person appointed to be an additional director of income tax or a joint director of income tax or an assistant director of income tax or deputy direct of income tax.

Tax recovery officer :  sec 2(44) means any I.T.O. who may be authorised by the principal chief commissioner or cheif commissioner or principal commissioner or commissioner, by special or general order in writing, to exercise the powers of a tax recovery officer. 

     The tax recovery officer may also exercise or perform such prescribed powers and functions which are conferred on, or assigned to, an assessing officer.

Appointment of income tax authorities :  The central government may appoint such persons as it thinks fit to be income tax authorities. The central govt. may authorise the board or a principal director general or director general, a chief commisioner or a commisioner to appoint income tax authorities below the rank of an assisstant commissioner or deputy commissioner, according to the rules and orders of the central govt regulating the conditions of service of such posts.

Control of income tax authorities : The board controls the income tax authorities. It may notify that any income tax authority will be subordinate to such other income tax authority or authorities as may be specified in the notification.

                                       Powers

General powers of income tax authorities are as under:

1.Power regarding discovery, production of evidence, etc... The assessing officer, the joint commissioner, the commisioner(Appeals), the principal cheif commisioner or cheif commisioner or the principal commissioner and the dispute resolution panel shall, for the purpose of this act, have same powers as are vested in a court under the code of civil procedures, 1908, when trying a suit in respect of the following matters : 

• Discovery and inspection
• Enforcing the attendance of any person, and examining him on oath;
• Compelling the production of books of account and other documents ; and
• Issuing commissions.

2. Power of search and seizure :  Now it is no more a secret that people evade tax and possess unaccounted assests. When the panel and prosecution provisions fail to prevent tax evasion, the dept has to resort to more stringent action like search and seizure.

3. Requisition of books of accounts, etc.  Where the principal director general or director general or principal director or director or the principal cheif commissioner or cheif commissioner or principal commissioner in consequences of information in his possession, has reason to belive that the books of accounts or other documents or the assets have been taken into custody by any officer or authority under any other law( ex : by collector, customs, sales tax commissioner, etc ) , then the above mention authority may authorise any additional director, additional commisioner, joint director, joint commissioner, assisstant commissioner , or income tax officer to require the authority to deliver such books of accounts of account, other documents or assets to the requisitioning officer forthwith or when such officer is of the opinion that it iscno longer necessary to retain the same in his custody.

Application of retained assets : The assets seized or requisitioned may be dealt with as under : 
    Where the person concerned makes an application to the assessing officers within 30 days from the end of the month in which the asset was seized for release of asset and the nature and source of acquisition of assets is explained to the satisfaction of the assessing officer, the amount of existing liability may by recovered out of such assets and the remaining portion of the asset may be released with the prior approval of the principal chief commissioner or chief commissioner or commissioner, to the person from whose custody the assets were seized. The assets shall be released within 120 days from the date on which the last of the authorisations for search or for requisition was executed.
4. Powers to call for information :  The assessing officer, the joint commissioner or the commissioner (Appeals) may for the purpose of this act :

• Require any firm to furnish him with a return of the names and addresses of the partners of the firm and their respective shares;
• Require any H.U.F. to furnish him with return of the names and addresses of the manager and the members of the family.
• Require any person who is trustee, gurdian or agent to furnish him with a return of the names of the persons for or of whom is trustee, gurdian or agent and their addresses;

5. Power of survey :   'survey' is casting of eyes or minds over something, inspection of the condition, amount, etc. Of something.   

         An income tax authority can make a survey for the purposes of this act.

The objectives of conducting income tax surveys are :

• To discover new assessees;
• To gather information useful for the purpose of assessment;
• To verify that an assessee who claims to keep regular books of account is in-fact doing the same;
• To verify that the assessee who claims not to maintain any books of account is in-fact maintaining the books;
• To verify that when the books are actually maintained, whether they reflect the correct state of affairs;
• To verify independently or by 'surprise check' the correctness of the information submitted by assessee;

6. Collection of Information : An income tax authority may, for the purpose of collection of any information which may be useful for or relevant to the purpose of this act enter into any of the following buildings at which a business or profession is carried on :

• Any building or place within the limits of the area assigned to such authority, or 
• Any building or place occupied by any person in respect of whom he exercises jurisdiction.

 Further, he may require any person( proprietor, employee or any other person) who may at the time and place be attending in any manner to, or helping in, the carrying on of such business or profession to furnish such information as may be prescribed(form 45D).

Powers of the central Board of Direct Taxes (CBDT):

It is the highest authority of the income tax department and functions under the ministry of finance of the govt of india. Its members are appointed by the central govt. It has the following powers:

• To make rules for carrying out the objectives of income tax act
• To issue orders and instructions to subordinates authorities for proper administration of income tax act.
• To authorize any exemptions, deductions, refund or any other relief.
• To declare any institution, association or body to be a company
• To exercise control over income tax authorities.
• To decide jurisdiction of income tax authorities.