2001 (5) TMI 36 - HC - Income Tax

Summary

Issues Involved:
1. Authority and jurisdiction of the prescribed income-tax authority under section 206 of the Income-tax Act.
2. Validity of the conferment of jurisdiction by the Board and the Chief Commissioner of Income-tax.
3. Legality of the survey conducted under section 133A and summons issued under section 131 of the Income-tax Act.

Detailed Analysis:

1. Authority and Jurisdiction of the Prescribed Income-tax Authority under Section 206:
The petitioners challenged the authorization issued by the Joint Commissioner of Income-tax (TDS), Range-21, Calcutta, empowering inspectors to conduct a survey under section 133A and issue summons under section 131. The petitioners argued that the prescribed income-tax authority under section 206 lacks the competence, authority, and jurisdiction to make any enquiry, investigation, or authorize any survey related to the prescribed returns under section 206. They contended that the payer is only assisting in tax realization through TDS and is not liable for the tax itself, which is the payee's responsibility.

2. Validity of the Conferment of Jurisdiction by the Board and the Chief Commissioner of Income-tax:
The petitioners argued that the Board could not delegate powers it does not possess to the Chief Commissioner, making such delegation ultra vires. They claimed that the notifications relied upon by respondents were contrary to section 206 read with section 120 of the Income-tax Act. The respondents countered that the Assistant Commissioner of Income-tax, TDS Circle 21(2), had jurisdiction over the petitioner for TDS matters, as conferred by the Chief Commissioner under rule 36A of the Income-tax Rules. They argued that the prescribed income-tax authority is essentially the Assessing Officer for TDS purposes.

3. Legality of the Survey Conducted under Section 133A and Summons Issued under Section 131:
The court examined whether the prescribed income-tax authority under section 206 could undertake a survey under section 133A or issue summons under section 131. The petitioners contended that such actions could only be taken under Chapter XIV for regular assessments, not under Chapter XVII-B. The court held that the powers under sections 131 and 133A are of general nature and can be exercised by the respective authorities whenever necessary for any purpose of the Act, not confined to Chapter XIV alone.

Conclusion:
The court dismissed the writ petition, holding that:
- The prescribed income-tax authority under section 206 has the jurisdiction to undertake surveys and issue summons.
- The Board and Chief Commissioner lawfully conferred jurisdiction and powers to the respective authorities.
- The actions taken by the respondents were within their lawful powers and jurisdiction.

The interim order was vacated, and the writ petition was dismissed with no order as to costs. The interim order was to continue until the day after the summer vacation.