Income-tax authorities, returns, e-filing and assessment

1. Income-tax authorities: section 236 [section 116]

Section 236 of the Income-tax Act, 2025 lists the classes of authorities:

• (a) the Central Board of Direct Taxes, constituted under the Central Boards of Revenue Act, 1963;
• (b) Principal Directors General or Principal Chief Commissioners of Income-tax;
• (c) Directors General or Chief Commissioners;
• (d) Principal Directors or Principal Commissioners;
• (e) Directors, Commissioners, or Commissioners (Appeals);
• (f) Additional Directors, Additional Commissioners, or Additional Commissioners (Appeals);
• (g) Joint Directors, Joint Commissioners, or Joint Commissioners (Appeals);
• (h) Deputy Directors or Deputy Commissioners;
• (i) Assistant Directors or Assistant Commissioners;
• (j) Income-tax Officers;
• (k) Tax Recovery Officers; and
• (l) Inspectors of Income-tax.

The “Director” line handles investigation; the “Commissioner” line handles assessment and administration. The Assessing Officer (section 2(12)) is the officer of the rank of Additional or Joint Commissioner, Deputy or Assistant Commissioner or Income-tax Officer vested with jurisdiction.

2. Appointment, control and jurisdiction

• Appointment (section 237 [section 117]): the Central Government appoints income-tax authorities; it may authorise the Board and senior authorities to appoint officers below a certain rank.
• Control (section 238 [section 118]): the Board specifies to which authorities others shall be subordinate.
• Instructions (section 239 [section 119]): the Board may issue orders, instructions and directions to other authorities for the proper administration of the Act, binding on them, but cannot direct an authority to make a particular assessment or to dispose of a case in a particular manner, and cannot interfere with the discretion of the Commissioner (Appeals). The Board may relax time limits to avoid genuine hardship.
• Jurisdiction (sections 241 to 244 [sections 120 to 129]): exercise of powers as directed by the Board, territorial and case-based jurisdiction, transfer of cases (section 243 [section 127]) after giving an opportunity to the assessee where practicable.

3. Powers

• Civil-court powers (section 246 [section 131]): the Assessing Officer, Joint Commissioner, Commissioner (Appeals), Commissioner and higher authorities have the powers of a civil court under the Code of Civil Procedure, 1908 for discovery and inspection, enforcing attendance and examining on oath, compelling production of books, and issuing commissions. Investigation wing officers may use them even when no proceeding is pending, if they suspect concealment.
• Search and seizure (section 247 [section 132]): where the competent authority, in consequence of information in his possession, has reason to believe that a person has failed or would fail to produce books on summons, or holds undisclosed money, bullion, jewellery, virtual digital assets or other valuables, he may authorise search of any building, place, vessel, vehicle or aircraft, breaking open locks, seizure of books and assets, and placing of marks; statements recorded on oath during search are admissible. The reasons recorded are confidential and need not be disclosed to the assessee (section 249).
• Requisition of books or assets held by another authority (section 248 [section 132A]).
• Survey (section 253 [section 133A]): an authority may enter business premises during business hours to inspect books, check cash and stock, and record statements; no seizure of assets, though books may be impounded with approval.
• Proceedings deemed judicial (section 257 [section 136]) for the purposes of the Bharatiya Nyaya Sanhita, 2023.

4. PAN and the return of income

PAN (section 262 [section 139A]) must be obtained by every person whose income exceeds the maximum not chargeable to tax, every person carrying on business above the prescribed turnover, and other specified classes, and must be quoted in returns and prescribed transactions.

Return of income (section 263 [section 139]):

• (1) Every person whose total income exceeds the basic exemption limit, every company and firm, and others specified (for example persons with foreign assets or high-value transactions), must furnish a return for the tax year on or before the due date.
• (4) Belated return: within nine months from the end of the tax year, or before completion of assessment, whichever is earlier. Late fee is payable (section 428 [section 234F]) and losses (other than house property) cannot be carried forward.
• (5) Revised return: on discovering an omission or wrong statement, within the same nine-month period.
• (6) Updated return: within 48 months from the end of the financial year following the tax year, on payment of additional tax; it cannot be a return of loss or reduce the tax liability, and is barred once search or assessment proceedings begin.

Tax due on the return must be paid as self-assessment tax before filing (section 266 [section 140A]).

Electronic filing and the I.T. portal. Returns are furnished electronically on the e-filing portal of the Income Tax Department (incometax.gov.in), in the form and manner prescribed by the Income-tax Rules, 2026 (notified by the CBDT under section 533 and in force from 1 April 2026). The taxpayer registers with PAN, files the return in the prescribed ITR form (online or through an offline utility), and verifies it electronically through Aadhaar OTP, net banking or a digital signature, or by sending a signed acknowledgement. The portal also carries the Annual Information Statement and Form 26AS (tax credits from TDS, TCS and advance tax), allows online payment of tax, response to notices, filing of rectification requests and appeals, and tracking of refunds. Returns are processed centrally at the Centralised Processing Centre, Bengaluru, under the scheme in section 270(6) [section 143(1A)].

5. Kinds of assessment

• Self-assessment (section 266 [section 140A]): the assessee computes and pays his own tax with the return.
• Processing / summary assessment (section 270(1) [section 143(1)]): the return is processed for arithmetical errors, incorrect claims apparent from the return, disallowance of losses or deductions claimed in a late return, and items in the audit report not reflected in income. An intimation is sent within nine months from the end of the financial year in which the return is filed. Adjustments require prior communication to the assessee (section 270(2)).
• Scrutiny assessment (section 270(8) and (10) [sections 143(2) and 143(3)]): to ensure the assessee has not understated income, computed excessive loss or underpaid tax, a notice is served within three months from the end of the financial year in which the return was furnished; after hearing evidence the Assessing Officer makes an order of assessment. Under section 268 [section 142] he may call for accounts and documents and direct special audit; under section 269 [section 142A] refer to a Valuation Officer.
• Best judgment assessment (section 271 [section 144]): where the person fails to file a return, fails to comply with a notice under section 268, or fails to comply with the scrutiny notice, the Assessing Officer assesses to the best of his judgment after a show-cause notice. The judgment must be honest and based on material, not arbitrary or vindictive (Raghubar Mandal Harihar Mandal v. State of Bihar, 1957 INSC 52, AIR 1957 SC 810).
• Faceless assessment (section 273 [section 144B]): scrutiny, best judgment and reassessment are made in a faceless manner, through electronic communication, without personal interface, as prescribed.
• Income escaping assessment / reassessment (sections 279 to 285 [sections 147 to 151]): if income chargeable to tax has escaped assessment, the Assessing Officer may assess or reassess it. Before issuing the notice under section 280 [section 148] he must conduct an inquiry and give a show-cause opportunity under section 281 [section 148A], with approval of the specified authority (section 284 [section 151]). Time limits (section 282): no notice after four years and three months from the end of the tax year, or up to six years and three months where the escaped income is fifty lakh rupees or more and the officer holds books or evidence showing it.
• Assessment in search cases (sections 292 to 301 [sections 158B to 158BI]): a block assessment of undisclosed income for the block period.
• Rectification of mistakes apparent from the record (section 287 [section 154]).

On reassessment, two decisions explain the present procedure. In GKN Driveshafts (India) Ltd. v. Income Tax Officer, 2002 INSC 494, (2003) 1 SCC 72, the Court required the officer to supply the reasons for reopening on request, to hear objections, and to dispose of them by a speaking order before proceeding. That safeguard is now built into the statutory inquiry and show-cause procedure. In Union of India v. Ashish Agarwal, 2022 INSC 510, (2023) 1 SCC 617, notices issued under the old procedure after the 2021 amendment were treated as show-cause notices under the new section 148A, so that the new safeguards applied.

How this is examined

January 2026 (100-mark paper) Q. 4: explain the various authorities and their powers under the Income-tax Act, 1961. The syllabus also names assessment and its kinds, filing of returns, electronic filing and the I.T. portal. Answer questions on authorities with section 1 and section 3 of this note; on assessment, with the list in section 5 and the two reassessment cases. Tell the examiner at the outset that the 1961 Act was replaced on 1 April 2026 and give both section numbers.