Introduction

The Central Government is empowered to appoint various Income-tax authorities and delegate powers to them under the Income-tax Act. These authorities shall exercise all or any of the powers conferred on them and perform all or any of the functions assigned to them by or under the Income-tax Act.

Hierarchy and Appointment of Authorities

The Income-tax hierarchy includes:

(a) CBDT

(b) Principal DGIT/PCIT

(c) DGIT/CCIT

(d) Principal DIT/PCIT

(e) DIT/CIT/CIT(A)

(f) Addl. DIT/ACIT/ACIT(A)

(g) JDIT/JCIT/JCIT(A)

(h) DDIT/DCIT/DCIT(A)

(i) ADIT/ACIT

(j) ITO, TRO, and Inspectors

Appointment of the Income-tax authorities can be made by:

(a) The Central Government, directly

(b) Authorised authorities (i.e. CBDT, PDGIT, DGIT, PCCIT, CCIT, PDIT, DIT, PCIT, CIT), for appointment of Income-tax authorities below the rank of ACIT/DCIT

(c) CBDT-authorised officers, for the appointment of executive/ministerial staff to assist

The CBDT may determine subordination among authorities and issue directions for the proper administration of the Income-tax Act. However, it cannot direct assessment outcomes or interfere with appellate discretion.

Directions by CBDT

CBDT may issue general or special orders to ensure effective tax administration, covering:

(a) Relaxation of specified provisions (e.g., Sections 139, 143, 144, 147, 148, 154, 155, 158BFA, 201(1A), 210, 211, 234A, 234B, 234C, 234E, 234F, 270A, 271C, 271CA, etc.)

(b) Orders may be published via the Official Gazette, trade associations, or displayed at tax offices

It may also:

(a) Condone delay to admit an application or in filing claims for any exemption, deduction, refund or any other relief in deserving cases

(b) Relax procedural conditions for deductions under Chapters IV and VI-A where delay was due to circumstances beyond the assessee’s control and the assessee has complied with such requirement before completion of assessment

Taxpayer’s Charter

CBDT is empowered to declare and enforce a Taxpayer’s Charter and issue necessary administrative instructions.

Jurisdiction of Income-tax Authorities

Income-tax authorities act as per CBDT directions and may exercise powers and perform the functions of subordinate authorities. The direction may be issued based on criteria such as territorial area, persons or classes of persons, incomes or classes of incomes, or cases or classes of cases. Higher-ranked authorities may concurrently exercise powers of lower ranks if so authorised.

Change in Incumbent

Where an Income-tax authority ceases to exercise jurisdiction in respect of any proceedings and is succeeded by another, a succeeding Income-tax authority may continue proceedings from where the predecessor left off. The assessee may request a re-hearing before the order is passed.

Faceless Jurisdiction

The Central government is empowered to make a scheme to exercise all or any of the powers and perform all or any of the functions, vesting the jurisdiction with the AO, exercising the power to transfer cases, or exercising jurisdiction in case of change of incumbency. Objectives:

(a) Increase transparency and efficiency

(b) Ensure team-based and tech-enabled proceedings

(c) Dynamic jurisdiction through randomised allocation

The Faceless Jurisdiction of Income-tax Authorities Scheme, 2022 (effective 28-03-2022) covers:

(a) Faceless assessments (Section 144B)

(b) Faceless appeals, faceless penalties, e-verification, e-settlement, and e-advance rulings

(c) Automated allocation based on algorithmic tools

Jurisdiction of Assessing Officers

An AO’s jurisdiction is based on the location of the business (principal place in case of multiple establishments), where the person is carrying on business or profession, or the residence of the person in other cases.

Disputes about jurisdiction are resolved by the appropriate higher authority (i.e. PDGIT/DGIT/PCCIT/CCIT/PCIT/CIT) or the CBDT. Once a return is filed or a notice served, jurisdiction cannot be questioned except as per specified timelines and conditions.

Transfer of Case

The competent authority (e.g., PDGIT/DGIT/PCCIT/CCIT/PCIT/CIT) may transfer cases between AOs with or without concurrent jurisdiction.

(a) Hearing opportunity must be given unless AOs are in the same city.

(b) CBDT intervenes if authorities disagree on the transfer.

(c) Transfer can be made at any stage without reissuing fresh notices.