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;
• (b) Principal Directors General of Income-tax or Principal Chief Commissioners 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 Commissioners 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.

Explanation

Section Summary:

Section 236 of the Income Tax Act outlines the various classes of income-tax authorities responsible for administering and enforcing tax laws in India. These authorities are structured hierarchically, with each level having specific roles and responsibilities. The section ensures clarity on who is empowered to perform tax-related functions, such as assessment, collection, and enforcement.

Key Changes:

This section is largely unchanged from the previous Income Tax Act. It continues to define the hierarchy and roles of income-tax authorities, ensuring consistency in tax administration. No significant amendments or new provisions have been introduced in this section.

Practical Implications:

• Taxpayers and Businesses: Understanding the hierarchy of income-tax authorities helps taxpayers and businesses know whom to approach for specific tax-related matters, such as assessments, appeals, or disputes.
• Compliance Processes: The section ensures that tax administration is carried out systematically, with each authority having a defined scope of work. This reduces ambiguity in the enforcement of tax laws.

Critical Concepts:

• Hierarchy of Authorities: The section lists authorities in descending order of seniority, starting from the Central Board of Direct Taxes (CBDT) at the top, followed by Principal Directors General, Directors General, Commissioners, and so on, down to Inspectors of Income-tax.
• Roles and Functions: Each authority has specific functions, such as:
  • CBDT: Policy-making and overall supervision.
  • Commissioners and Directors: Overseeing assessments, appeals, and investigations.
  • Income-tax Officers: Handling day-to-day assessments and collections.
  • Tax Recovery Officers: Managing recovery of unpaid taxes.

Compliance Steps:

• For Taxpayers: Ensure that all communications, filings, and disputes are directed to the appropriate authority based on the nature of the issue.
• For Businesses: Maintain proper documentation and records to facilitate smooth interactions with the relevant income-tax authorities during assessments or audits.

Examples:

• Scenario 1: A taxpayer receives a notice for an income tax assessment. The notice is issued by an Income-tax Officer, as they are responsible for conducting assessments.
• Scenario 2: A business disputes a tax demand and files an appeal. The appeal is handled by a Commissioner of Income-tax (Appeals), as they are the designated authority for resolving such disputes.

This section ensures a structured and efficient tax administration system, enabling both taxpayers and authorities to operate within a clear framework.