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1.  Introduction about this Act-
In India, the Central Government has been empowered by Entry 82 of
the Union List of Schedule VII of the Constitution of India to levy tax on
all income other than agricultural income. The Income Tax Law comprises
The Income Tax Act 1961, Income Tax Rules 1962, Notifications and
Circulars issued by Central Board of Direct Tax (CBDT), Annual Finance
Acts and Judicial pronouncements by Supreme Court and High Courts.
The Government of India imposes an income tax on taxable income of
all persons including individuals, Hindu Undivided Families (HUFs),
companies, firms, association of persons, body of individuals, local
authority and any other artificial judicial person. Levy of tax is separate on
each of the persons. The levy is governed by the Indian Income Tax Act,
1961. The Indian Income Tax Department is governed by CBDT and is
part of the Department of Revenue under the Ministry of Finance,
Government of India. Income tax is a key source of funds that the
government uses to fund its activities and serve the public. The Income
Tax Department is the biggest revenue mobilizer for the Government.

2.  The 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. However, there have
been a number of instances of misuse of these rule- making
powers which have the effect of contradicting statutory
provisions that have been given binding effect, displacing
the authoritative pronouncements of the Higher Judiciary
and causing an erosion of the constitutionally-mandated
effect of Supreme Court declarations under Article 141. In
this scenario, for the purpose of effective financial
management it becomes imperative to understand the
functioning, the powers and the limitation on the powers of
these tax authorities.

3.  Chapter XIII of the Income-tax Act, 1961, is
devoted to the income-tax authorities and contains a
total of 30 Sections. Part-A of the Chapter, containing
Sections 116 to 119, relates to the appointment and
control of the income tax authorities; Part-B containing
Sections 120 to 130-A (out of which only the Sections
120, 124, 127 and 129 are in force, the rest having been
omitted) pertain to the jurisdiction of the income-tax
authorities; Part-C containing Sec. 131 to 136 are
concerned with the powers of the income tax
authorities; while Part-D containing Sec. 137 (omitted)
and 138 pertain to the disclosure of information
respecting assessees.

4.  Sec. 11 6- Income Tax authorities.-
There shall be the following classes of income tax authorities for the
purposes of this Act, namely:-
(a) The Central Board of Direct Taxes constituted under the Central Boards of
Revenue Act, 1963 (54 of1963),
(b) Directors-General of Income Tax or Chief Commissioners of Income Tax,
(c) Directors of Income Tax or Commissioners of Income Tax or
Commissioners of Income Tax (Appeals),
(cc) Additional Directors of Income Tax or Additional Commissioners of
Income Tax or Additional Commissioners of Income Tax (Appeals),
(cc-a)Joint Directors of Income Tax or Joint Commissioners of Income Tax,
(d) Deputy Directors of Income Tax or Deputy Commissioners of Income Tax
or Deputy Commissioners of Income Tax (appeals),
(e) Assistant Directors of Income Tax or Assistant Commissioners of Income
Tax,
(f) Income Tax Officers,
(g) Tax Recovery Officers,
(h) Inspectors of Income Tax

5.  Assessing officer- In this connection, it may be noted that
under section 2(7A), the term ‘Assessing Officer’ means:
 (a) The Assistant Commissioner or Deputy Commissioner
or Assistant Director or Deputy Director; or
 (b) 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
 (c) The Additional Commissioner or Additional Director or
Joint Commissioner or Joint Director who is 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.

6.  117. Appointment of Income Tax authorities. –
(1) The Central Government may appoint such persons as it thinks fit
to be Income Tax authorities.
(2) Without prejudice to the provisions of sub-Section (1), and subject
to the rules i and orders of the Central Government regulating the
conditions of service of persons in public services and posts, the
Central Government may authorize the Board, or a Director-
General, a Chief Commissioner or a Director or a Commissioner to
appoint Income Tax authorities below the rank of an Assistant
Commissioner or Deputy Commissioner.
(3) Subject to the rules and orders of the Central Government
regulating the conditions of service of persons in public services
and posts, an Income Tax authority authorized in this behalf by the
Board may appoint such executive or ministerial staff as may be
necessary to assist it in the execution of its functions.

7.  Power to commissioner of income tax –
Commissioners are appointed by the Central
Government. Generally, they are appointed to head income-
tax administration of a specified area. As the head of
administration, a Commissioner of income-tax enjoys
certain administrative as well as judicial powers. A
commissioner may exercise powers of an assessing officer.
It has the power to transfer any case from one or more
assessing officers to any other assessing officer. It can grant
approval for an order issued by the assessing officer. Prior
approval is required for reopening of an assessment. Its,
also, has the power to revise an order passed by an
assessing officer in addition to many other powers as given
in the Income Tax Act, 1961.

8.  Commissioner (Appeals):
Commissioners of Income-Tax (Appeals) are
appointed by the Central Government. It is an appellate
authority vested with the following judicial powers:
a. Power regarding discovery, production of evidence
etc.
b. Power to call information.
c. Power to inspect registers of companies.
d. Power to set off refunds against tax remaining
payable.
e. Power to dispose of appeals.
f. Power to impose penalty.

9.  Joint Commissioners:
Joint Commissioners are appointed by the
Central Government. The main function of the
authority is to detect tax- evasion and supervise
subordinate officers. Under the different
provisions of the Act, the Joint Commissioner
enjoys the power to accord approval to adopt fair
market value as full consideration, instruct
income tax officers, and exercise the powers of
income tax officers, the power to call
information, to inspect registers of companies, to
make any enquiry among other powers.

10.  Resolve of dispute-Disputes regarding jurisdiction shall be resolved by the
concerned CCIT or CIT on mutual understanding. However, for any
disagreement, the matter shall be referred to CBDT and CBDT shall
resolve the dispute by way of issuing a notification in the Official Gazette
of India.
 Discovery, Production of Evidence etc. [Section 131]:
 The Assessing Officer, Deputy Commissioner (Appeals), Joint
Commissioner, Commissioner (Appeals), the Chief Commissioner and the
Dispute Resolution Panel referred to in section 144C have the powers
vested in a Civil Court under the Code of Civil Procedure, 1908 while
dealing with the following matters:
(i) discovery and inspection;
(ii) enforcing the attendance of any person, including any officer of a banking
company and examining him on oath;
(iii) compelling the production of books of account and documents; and
(iv) issuing commissions

11.  Power to Requisition Books of Account etc. [Section 132A]:
Where the Director or the Director-General or Commissioner or
the Chief Commissioner in consequence of information in his
possession, has reason to believe that (a), (b), or (c) as mentioned
under section 132(1) and the book of accounts or other documents
or the assets have been taken under custody by any authority or
officer under any other law, then the Chief Commissioner or the
Director General or Director or Commissioner can authorize any
Joint Director, Deputy Director, Joint Commissioner, Assistant
Commissioner, Assistant Director, or Income tax Officer to require
the authority to provide sue books of account, assets or any
documents to the requisitioning officer, when such officer is of the
opinion that it is no longer necessary to retain the same in his
custody.

12.  Power to call for information [Sections 133]:
The Commissioner The Assessing Officer or the Joint Commissioner
may for the purpose of this Act:
(a) Can call any firm to provide him with a return of the addresses and names
of partners of the firm and their shares;
(b) Can ask any Hindu Undivided Family to provide him with return of the
addresses and names of members of the family and the manager;
(c) Can ask any person who is a trustee, guardian or an agent to deliver him
with return of the names of persons for or of whom he is an agent, trustee
or guardian and their addresses;
(d) Can ask any person, dealer, agent or broker concerned in the management
of stock or any commodity exchange to provide a statement of the
addresses and names of all the persons to whom the Exchange or he has
paid any sum related with the transfer of assets or the exchange has
received any such sum with the particulars of all such payments and
receipts;

13.  Power to Inspect Registers of Companies
[Section 134]:-
The Assessing Officer, the Joint
Commissioner or the Commissioner (Appeals), or
any person subordinate to him authorised in
writing in this behalf by the Assessing Officer,
the Joint Commissioner or the Commissioner
(Appeals), as the case may be, may inspect and if
necessary, take copies, or cause copies to be
taken, of any register of the members, debenture
holders or mortgagees of any company or of any
entry in such register.

14.  Other Powers [Sections 135 and 136]:
The Director General or Director, the Chief Commissioner or
Commissioner and the Joint Commissioner are competent to make
any enquiry under this act and for all purposes they shall have the
powers vested in an Assessing Officer in relation to the making of
enquiries. If the Investigating officer is denied entry into the
premises, the Assessing Officer shall have all the powers vested in
him under sections 131(1) and (2). All the proceedings before
Income tax authorities are judicial proceedings for purposes of
section 196 of the Indian Penal Code, 1860, and fall within the
meaning of sections 193 and 228 of the Code. An income-tax
authority shall be deemed to be a Civil Court for the purposes of
section 195 of the Criminal Procedure Code, 1973.