Working of sections 125A and 144B of the Incomw Tax Act. - Income Tax - 1231/CBDT

INSTRUCTION NO. 1231/CBDT Dated : January 20, 1979 Section(s) Referred: 125A Statute: Income - Tax Act, 1961 The Board had occasion to consider certain important questions regarding the working of sections 125A and 144B of the I.T.Act. These questions have arisen in one case noticed by the board where the Commissioner had conferred concurrent jurisdiction u/s.125A(1) on the IAC. Under the said order the IAC was also required to pass such orders as he might deem fit under sub sec(2) of sec.125A. The IAC passed orders u/s.125A(2) conferring upon himself all the functions of the ITO in respect of certain cases and in respect of other cases the ITO continued to exercise all the functions under the I.T.Act, 1961. 2. The following questions arose for determination in the said situation:- i) whether the ITO is divested of all powers and functions under the I.T.Act as soon as concurrent jurisdiction is conferred on an IAC u/s.125A(1); ii) if so, whether the IAC has to pass order u/s.125A(2) conferring all or some powers or functions in respect of the cases falling under concurrent jurisdiction; iii) if not, whether the ITO continues to exercise powers and functions under the I.T.Act until order u/s.125A(2) is made withdrawing all or some powers or functions; iv) whether the IAC can distribute the cases between himself and the ITO so as to perform all the functions and exercise all the powers under the I.T.Act in respect thereof; v) whether in respect of such cases where the ITO performs the functions of assessment etc. the provisions of section 144A and 144B are applicable. 3. The above issues were examined by the Board in consultation with the Ministry of Law. The Board are advised as under:- i) The mere fact that an order under sub-section(1) of sec.125A is passed does not mean that the ITO is automatically divested of his powers and functions under the I.T.Act. The ITO in such a situation has primary jurisdiction and the IAC only acquires a concurrent jurisdiction; ii) When concurrent jurisdiction is conferred upon the two officers it would mean that both of them can operate in the same field. If no order is passed u/s.125A(2) the ITO continues to exercise the powers and functions under the Act in respect of the cases over which he has primary jurisdiction but the IAC by an order u/s.125A(2) can withdraw all or some cases or some powers and functions in relation to the cases left with the ITO. Since sub-section(2) of sec.125A is intended to facilitate the distribution of work between the IAC and the ITO it would be desirable to pass an order under the said sub-section allocating the work and function; iii) The IAC by an order under sub-section (2) of section 125A can distribute the cases between himself and the ITO so that each of them may perform all the functions and exercise all the powers under the I.T.Act in respect of such cases; iv) In respect of cases where the ITO performs the functions of the assessments etc. the provisions of sec.144A and 144B will be applicable. It means that in cases where the assessments in fact are made by the ITO and not by the IAC and he proposes to make variations exceeding the amount fixed u/s.144B(6) a draft of the proposed order of the assessment is to be forwarded to the assessee and the other provisions of sec.144B would apply. Similarly, the powers u/s.144A can be exercised by the IAC in respect of the cases in which the powers of assessment etc. are not taken over by him u/s.125A(2) and are exercised by the ITO. 4. It is further clarified that the IAC when he deems fit can by order u/s.125(2) reassign to the ITO all or any of the cases or all or any of the powers and functions in relation to the case or cases, which he has earlier withdrawn from the ITO under the said sub-section.