Issuing of Summons under Income-tax
Introduction
Specified income-tax authorities may issue summons under Section 131 to gather evidence for ongoing proceedings, investigate suspected concealment of income, or obtain information relating to DTAA matters. These authorities possess powers similar to those of a civil court under the Code of Civil Procedure, 1908.
Meaning and Purpose of Summons
A summon is a legally binding written order issued for the purpose of inquiry, investigation, or evidence gathering. Section 131 vests certain income-tax authorities with powers to enforce attendance, examine persons on oath, compel production of documents, conduct discovery and inspection, and issue commissions.
Powers Exercised Through Summons
The powers include enforcing attendance of any person, examining such person on oath, compelling production of books of account and documents, permitting inspection of documents, and issuing commissions for functions such as examining witnesses, conducting inquiries, or obtaining expert reports.
Types of Summons
Summons may be issued under three provisions:
- Section 131(1)for use during any pending income-tax proceeding such as assessment, reassessment, penalty, or appeal.
- Section 131(1A)by Investigation Wing officials to inquire into suspected tax evasion even when no proceeding is pending; an authorised officer may issue such summons only before initiating action under Section 132(1).
- Section 131(2)for inquiries relating to DTAAs or TIEAs, regardless of the pendency of proceedings.
Persons to Whom Summons May Be Issued
The authority may summon “any person,” including third parties, banking company officials, or any individual/entity possessing information or documents relevant to an inquiry or proceeding. The power is not restricted to the assessee.
Summons under Section 131(1)
These summons may be issued by authorities such as the Assessing Officer, Joint Commissioner, Commissioner (Appeals), Principal Commissioner, Chief Commissioner, and the Dispute Resolution Panel. They can be issued only when proceedings under the Act are pending. Non-compliance may result in penalty under Section 272A and may also lead to initiation of search.
Summons under Section 131(1A)
This provision empowers high-ranking authorities including the Principal Director General, Director General, Principal Director, Director, Joint/Deputy/Assistant Director, and authorised officers under Section 132. It applies where there is reason to suspect concealment of income, even if no proceeding is pending. An authorised officer may invoke this provision only before beginning a search under Section 132(1).
Distinction Between Sections 131(1) and 131(1A)
Section 131(1) requires the existence of a pending proceeding, while Section 131(1A) can be exercised without any proceeding but requires reason to suspect concealment of income. Section 131(1) is generally exercised by assessment and appellate authorities, whereas Section 131(1A) is exercised by Investigation Wing authorities and authorised officers.
Summons under Section 131(2)
These summons may be issued by income-tax authorities not below the rank of Assistant Commissioner as notified by the Board, for inquiries related to DTAAs or TIEAs. The power can be exercised even in the absence of ongoing proceedings.
Retention of Documents Obtained Through Summons
Books of account and documents produced may be impounded and retained. An Assessing Officer, Assistant Director, or Deputy Director must record reasons before impounding. Retention beyond fifteen days (excluding holidays) requires prior approval of higher authorities including Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, Commissioner, Principal Director General, or Director General, as applicable.