L G DASS (PROP.) 19 October 2010

Can ITO issue summons

Under section 131(1) of the I.T. Act, 1961 the ITO can issue a summons for the discovery of documents etc. Various courts have held that the said powers can be exercised by the ITO only when proceedings are pending before him. Now, my querry is as to whether the term "proceedings" means assessment or re-assessment proceedings with which the ITO is entrusted or it may mean "any proceeding" like disposal of rectification applications, granting of refund, disposal of miscellaneous claims filed by the assessee, giving effect to the appellate order etc etc.

In the present controversy, I need a definite authority wherein it has been clearly held that proceeding must mean an assessment or re-assessment proceeding only and none else.

L.G. Dass, Adv

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2 Replies

Sathyan A.R. ( Advocate practising tax advisor) 23 October 2010

The word proceedings is not defined in Income tax Act. However section for the purpose of sectrion13 it is mentins that the mentioed authorities for the pursose of this Act.jave tje sa,e [pwers as are vested om a cpirt imdr the Code of Civil Proceadure,2908(5 of 2908)when trying a suit in respect of certain matters specified in section 131.

The emphaise is for the purpose of the Act. The purpose of the Act i. The purpose of the act includes assessment which mens computation of icome and detrermination of tax . By defenition this includes re asessmetn also. Bein the inclusive defintion this also includes other proceedings too. Hence the summor can be issued for the purpose of the Act.

Unlke in civil suit the commence of action is afer filing a suit. But under Income tax act, whether or not return of income is filed the cause of action arises when the assessing officr issues any statutory notice 143(2),142(1) or 148. Even notice u/s.154 or notice to revision u.263 can be called as commencement of proceedintgs.

A.R.Sathyan

advocate and TAx advisor

9822262492

Tax advisor

Sathyan A.R. ( Advocate practising tax advisor) 23 October 2010

incontinuation i would thefoe say the INcome tax Officer is within his power to issue summons for the purpose of causes mentioned in section 131 once the once the notice is issued and served undser any of the section u/s.143(2)/142(1)/148/154. The meaning of assesse given under section 2(7) also substantiate. The world during the pendency of proceedings is not to be narrowly understood as proceeding that arise after filing of return of income. The cause of action determines filing of civit suit. The non filing of rturn of income and consequencess thereof gives a cause of action to auathorities to commence action and that is the difference.

A.R.Sathyan

09822252492

tax advisor an advocate.