The Tax Commissioner and any authorized employee is hereby authorized to examine the books, papers and records of any employers, or of any taxpayer or person subject to the tax, for the purpose of verifying the accuracy of any return made, or if no return was made, to ascertain the tax due. Every such employer, supposed employer, taxpayer or supposed taxpayer is hereby directed and required to furnish to the Tax Commission or duly authorized agent or employee, the means, facilities and opportunity for making such examination and investigation as are hereby authorized.For effective financial management, it is essential to understand the functioning, powers, and limitations of the powers of the tax authorities. This turns out to be all the more important in the light of the present scenario in India where there is uncertainty in the minds of the assessee as to the power that these authorities can exercise and where there have been several cases of misuse of these discretionary powers resulting in contravening the statutory provisions, which has acquired binding effect supersedes the authoritative pronouncement of the higher judiciary and disrupts the constitutionally mandated effect of the pronouncement of the Supreme Court under Article 141.It explains simply the various tax authorities established under the Income Tax Act, 1961(Act) the Central Board of Direct Taxes and its powers, the powers of other tax authorities of income, the jurisdiction of income tax authorities, and their persuasive analysis to enable a comprehensive understanding of the functioning of financial authorities for financial management. Commissioner of Income Tax The Chief Commissioner of Income Tax is generally appointed by the Indian Revenue Service and serves the government for 30 years. A new designation is generated as a result of cadre reorganization. The Principal Chief Commissioner of Income Tax and the senior-most Chief Commissioners of Income Tax are elevated to this grade and are given greater duties in terms of personnel and financial objectives. Special Secretary is their comparable rank at the Union Secretariat. Chief Commissioners are in charge of the department’s activities within an area, which normally overlaps with the territory of a state. Their numbers range from 16 to 3 depending on the location. The Central Board of Direct Taxes assigns Chief Commissioners financial objectives for collection, which are distributed among Income Tax Commissioners and continuously checked. Powers of the Commissioners of Income Tax Commissioners are appointed by the central government. They are generally appointed to head the income tax administration in a particular area. As the head of the administration, the Commissioner of Income Tax has certain administrative as well as judicial powers. The Commissioner may exercise the powers of an Assessing Officer. He has the power to transfer any case from one or more Assessing Officers to any other Assessing Officer. He may grant consent to the order passed by the Assessing Officer. Prior approval is required to reopen an assessment. Apart from many other powers mentioned in the Income Tax Act, of 1961, it also has the power to revise the order passed by the Assessing Officer. Meaning of Appeal Appeals lie before the CIT (A) against the appealable orders under Section 246A of the Act and the appellate proceedings before the CIT (A) and the powers of the CIT (A) are governed by Sections 250 and 251 of the Act respectively. Section 250 lays down the procedure for appeal before the Appellate Authority against the orders of the Assessing Officer. The Appellate Body has been named differently in the statute from time to time. Originally the Appellate Authority was described as Appellate Assistant Commissioner at the relevant time and now as Commissioner of Income Tax (Appeal).The first appeal against the order of the Assessing Officer is to the Commissioner (Appeals) and can be filed only by the assessee.An assessee or any deductor or any collector who has been aggrieved by orders (such as orders passed under sections 147, 144, 143(3), etc.) passed by any Income Tax Authority may file his first appeal to the Commissioner u/s 246A Income Tax Act, 1961. Form of Appeal and Limitation (Section 249 and Rules 45 and 46) Form: An appeal to the Commissioner (appeal) is made on Form 35. Method of submitting an appeal: By submitting the form electronically under a digital signature if the Income Tax Return is filed under a digital signature. By submitting the form electronically through an electronic verification code in a case not covered by sub-clause (a). If the assessee can submit a return in paper form, he can use both the submission options in paper form or electronically. Powers of the Commissioner (Appeals) The Central Government appoints the Commissioners of Income Tax (Appeals). It is an appellate body that has the following judicial powers: Power relating to discovery, production of evidence, etc. Ability to call information. Power to inspect Company Registers. Option to offset refunds against remaining tax payable. Authority to handle appeals. Power to impose a penalty. Let us have a look at them in a bit of detail- The legislature has conferred very wide powers on the Appellate Commissioner once an appeal is preferred by the assessee. An appeal is only a new hearing or renewal of proceedings. In the absence of any statutory bar or limitation, the CIT (A) has the same powers, exercisable or in the same manner and to the same extent as the AO in the first instance. The powers of CIT (A) are re-examination and once a writ is placed before CIT (A), its capabilities are not limited to examining only those aspects of the assessment complained of by the assessee, but its powers extend to the entire extent. The assessment is to be corrected by the AO not only about the matter raised by the assessee in appeal but also about any other matter he considered and determined during the assessment. According to Section 250 (4) of the Income Tax Act, CIT (A) is authorized to carry out further investigations that it deems appropriate or to arrange further investigations by an income tax investigator
