Income Tax Act

Official PDF pages 316–320

SOURCE PDF PAGE 316
( n )   “tonnage tax company” means a qualifying company in relation to which
tonnage tax option is in force;
( o )   “tonnage tax scheme” means a scheme for computation of profits and
gains of business of operating qualifying ships under the provisions of
this Part.
CHAPTER XIV
TAX ADMINISTRATION
A.—Authorities, jurisdiction and functions
Income-tax authorities.
236 .   For the purposes of this Act, there shall be the following classes of income-tax
authorities:—
( a )   the Central Board of Direct Taxes constituted under the Central Boards
of Revenue Act, 1963 (54 of 1963);
( b )   Principal Directors General of Income-tax or Principal Chief Commis -
sioners of Income-tax;
( c )   Directors General of Income-tax or Chief Commissioners of Income-tax;
( d )   Principal Directors of Income-tax or Principal Commissioners of
Income-tax;
( e )   Directors of Income-tax or Commissioners of Income-tax or   Commis -
sioners of Income-tax (Appeals);
( f )   Additional Directors of Income-tax or Additional Commissioners of
Income-tax or Additional Commissioners of Income-tax (Appeals);
( g )   Joint Directors of Income-tax or Joint Commissioners of Income-tax or
Joint Commissioners of Income-tax (Appeals);
( h )   Deputy Directors of Income-tax or Deputy Commissioners of Income-
tax;
( i )   Assistant Directors of Income-tax or Assistant Commissioners of
Income-tax;
( j )   Income-tax Officers;
( k )   Tax Recovery Officers; and
( l )   Inspectors of Income-tax.
Appointment of income-tax authorities.
237 .   (1) The Central Government may appoint such persons as it thinks fit to be
income-tax authorities.
(2) The Central Government may, subject to the rules and its orders regulating the
conditions of service of persons in public services and posts, authorise the Board,
or a Principal Director General or Director General, or a Principal Chief Commis -
sioner or Chief Commissioner, or a Principal Director or Director, or a Principal

──────────

SOURCE PDF PAGE 317
Commissioner or Commissioner, to appoint income-tax authorities below the rank
of a Deputy Commissioner or Assistant 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
authorised 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.
Control of income-tax authorities.
238 .   The Board may, by notification, direct that any income-tax authority or
authorities specified in the notification shall be subordinate to such other
income-tax authority or authorities as specified in such notification.
Instructions to subordinate authorities.
239.   (1) The Board may issue such orders, instructions and directions to other
income-tax authorities as it considers fit for the proper administration of this
Act, and such authorities and all other persons employed in the execution of this
Act shall observe and follow such orders, instructions and directions.
(2) No orders, instructions or directions under sub-section (1) shall be issued so as
to—
( a )   require any income-tax authority to make a particular assessment or to
dispose of a particular case in a particular manner; or
( b )   interfere with the discretion of the Joint Commissioner (Appeals) or
Commissioner (Appeals) in the exercise of his appellate functions.
(3) Without prejudice to the generality of the foregoing power, the Board may,—
( a )   if it considers it necessary or expedient so to do for the proper and efficient
management of the work of assessment and collection of revenue, issue,
from time to time (whether by way of relaxation of any of the provisions
of sections 263, 270, 271, 279, 280, 287, 288, 298, 398(3), 406, 407, 408,
423,   424, 425, 427, 428, 439, 448, 449 or otherwise), general or special
orders in respect of any class of incomes or class of cases,––
( i )   setting forth directions or instructions (not being prejudicial to
assessees) as to the guidelines, principles or procedures to be
followed by other income-tax authorities in the work relating to
assessment or collection of revenue or the initiation of proceedings
for the imposition of penalties; and
( ii )   any such order may, if the Board is of the opinion that it is necessary
in the public interest so to do, be published and circulated in the
prescribed manner for general information;
( b )   if it considers it desirable or expedient so to do for avoiding genuine hard -
ship in any case or class of cases, by general or special order, authorise
any income-tax authority, not being a Joint Commissioner (Appeals) or a
Commissioner (Appeals) to admit an application or claim any exemption,
deduction, refund or any other relief under this Act after the expiry of
the period specified in this Act for making such application or claim and
deal with the same on merits as per law;

──────────

SOURCE PDF PAGE 318
( c )   if it considers it desirable or expedient so to do for avoiding genuine
hardship in any case or class of cases, by general or special order for
reasons to be specified therein, relax any requirement contained in any
of the provisions of Chapter IV or VIII, where the assessee has failed to
comply with any requirement specified in such provision for claiming
deduction thereunder, subject to the following conditions:—
( i )   the default in complying with such requirement was due to circum -
stances beyond the control of the assessee; and
( ii )   the assessee has complied with such requirement before the com -
pletion of assessment in relation to the tax year in which such
deduction is claimed.
(4) The Central Government shall cause every order issued under sub-section (3)( c )
to be laid before each House of Parliament.
Taxpayer’s Charter.
240 .   The Board shall adopt and declare a Taxpayer’s Charter and issue such
orders, instructions, directions or guidelines to other income-tax authorities
as it considers fit for the administration of such Charter.
Jurisdiction of income-tax authorities.
241 .   (1) The income-tax authorities shall exercise all or any of the powers and
perform all or any of the functions conferred on, or assigned to, such
authorities under this Act, as per such directions as the Board may issue for the
exercise of the powers and performance of the functions by all or any of those
authorities.
(2) Any income-tax authority, being an authority higher in rank, may, if so direct -
ed by the Board, exercise the powers and perform the functions of an income-tax
authority lower in rank and any such direction issued by the Board shall be deemed
to be a direction issued under sub-section (1).
(3) The directions of the Board under sub-section (1) may authorise any other
income-tax authority to issue orders in writing for the exercise of the powers and
performance of the functions by all or any of the other income-tax authorities who
are subordinate to it.
(4) In issuing the directions or orders referred to in sub-sections (1), (2) and (3), the
Board or other income-tax authority authorised by it may have regard to any one
or more of the following criteria:—
( a )   territorial area;
( b )   persons or classes of persons;
( c )   incomes or classes of income; and
( d )   cases or classes of cases.

──────────

SOURCE PDF PAGE 319
(5) Without prejudice to sub-sections (1), (2) and (3), the Board may, by general
or special order, subject to such conditions, restrictions or limitations as specified
therein––
( a )   authorise any Principal Director General or Director General or
Principal Director or Director to perform such functions of any other
income-tax authority as may be assigned to him by the Board;
( b )   empower the specified income-tax authority to issue orders in writing
that the powers and functions conferred on, or assigned to, the Assess -
ing Officer under this Act in respect of any specified area, or persons or
classes of persons, or incomes or classes of income, or cases or classes
of cases, shall be exercised or performed by an Additional Commissioner
or an Additional Director or a Joint Commissioner or a Joint Director.
(6) Where any order is made under sub-section (5)( b ), references in any other pro -
vision of this Act or in any rule made thereunder, to the Assessing Officer shall be
deemed to be references to such Additional Commissioner or Additional Director
or Joint Commissioner or Joint Director by whom the powers and functions are to
be exercised or performed under such order, and any provision of this Act requiring
approval or sanction of the Joint Commissioner shall not apply.
(7) The directions and orders referred to in sub-sections (1), (2) and (3) may,
wherever considered necessary or appropriate for the proper management of work,
require two or more Assessing Officers (whether or not of the same class) to exercise
and perform, concurrently, the powers and functions in respect of any area, or
persons or classes of persons, or incomes or classes of income, or cases or classes
of cases, and––
( a )   where such powers and functions are exercised and performed concur -
rently by the Assessing Officers of different classes, any authority lower
in rank amongst them shall exercise the powers and perform the
functions as any higher authority amongst them may direct; and
( b )   references in any other provision of this Act or in any rule made there -
under to the Assessing Officer shall be deemed to be references to such
higher authority and any provision of this Act requiring approval or
sanction of any such authority shall not apply.
(8) Irrespective of anything contained in any direction or order issued under this
section, or in section 242, the Board may, by notification, issue any direction for
the purposes of furnishing of the return of income or the doing of any other act or
thing under this Act or any rule made thereunder by any person or class of persons.
(9) The income-tax authority exercising and performing the powers and functions
in relation to the person or class of persons referred to in sub-section (8) shall be
such authority as specified in the notification issued under that sub-section.
Jurisdiction of Assessing Officers.
242.   (1) Where an Assessing Officer has been vested with jurisdiction over
any area by virtue of any direction or order issued under section 241(1) or (2)
or (3), he shall have jurisdiction within the limits of such area,—

──────────

SOURCE PDF PAGE 320
( a )   in respect of any person carrying on a business or profession, if the place
at which he carries on his business or profession is situated within the
area, or where his business or profession is carried on in more places
than one, if the principal place of his business or profession is situated
within the area; and
( b )   in respect of any other person residing within the area.
(2) Where a question arises under this section as to whether an Assessing Officer has
jurisdiction to assess any person, the question shall be determined by the specified
income-tax authority.
(3) Where under this section, a question arises relating to areas within the jurisdiction
of different specified income-tax authorities, the question shall be determined––
( a )   by the specified income-tax authorities concerned; or
( b )   by the Board or by such specified income-tax authority as the Board may,
by notification, specify in this behalf, if they are not in agreement.
(4) No person shall call in question the jurisdiction of an Assessing Officer,––
( a )   where he has made a return under section 263(1), after the expiry of one
month from the date on which he was served with a notice under section
268(1) or 270(8)   or after the completion of the assessment, whichever is
earlier;
( b )   where he has made no such return, after the expiry of the time allowed
by the notice under section 268(1)   or 280(2)   for the making of the return
or by the notice under section 271(2)   to show cause why the assessment
should not be completed to the best of the judgment of the Assessing
Officer, whichever is earlier;
( c )   where an action has been taken under section 247 or 248, after the expiry
of one month from the date on which he was served with a notice under
section 294(1)( a )   or after the completion of the assessment, whichever
is earlier.
(5) Subject to the provisions of sub-section (4), where an assessee calls in question
the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not
satisfied with the correctness of the claim, refer the matter for determination under
sub-section (2) or (3) before the assessment is made.
(6) Irrespective of anything contained in this section or in any direction or order
issued under section 241, every Assessing Officer shall have all the powers conferred
under this Act on an Assessing Officer in respect of the income accruing or arising
or received within the area, if any, over which he has been vested with jurisdiction
by virtue of the directions or orders issued under section 241(1) or (2) or (3).
Power to transfer cases.
243.   (1) The specified income-tax authority may transfer any case from one or
more Assessing Officers subordinate to him (whether with or without con -
current jurisdiction) to any other Assessing Officer or Assessing Officers (whether
with or without concurrent jurisdiction) also subordinate to him.