This article is comprehensive analysis of commission issuance under the Income-tax Act, including the meaning of commissions, their purpose, and the procedure involved. Article explains the circumstances under which a commission can be issued and to whom it may be directed, powers granted to the commissioner and the impact of their report on the proceedings.
Section 131(1)(d) of the Income-tax Act empowers the Income-tax (IT) Authorities to issue commissions. The powers granted to the authorities under section 131 are derived from the Code of Civil Procedure (CPC). Therefore, the powers vested in a court under the CPC are also available to the IT Authority when invoking section 131. The subject is dealt with in Order XXVI of the CPC. Let’s examine these provisions.
Meaning:
Neither the IT Act nor the CPC defines the term “commission.” The general meaning of the term is the power delegated by one authority to another for the discharge of the first authority’s duties. For example, if an Assessing Officer (AO) is unable to examine a witness due to a specific reason, they can authorize another Officer to do so by issuing a commission.
Purpose:
Section 75, read with Rules 1 to 14 of Order XXVI of the CPC, states that a commission can be issued, among other things, to examine witnesses, conduct local investigations, or examine accounts. In IT proceedings, commissions are generally issued to examine taxpayers or witnesses.
Procedure:
An important question is whether it is necessary to record reasons when a commission is issued under the IT Act. While the IT Act is silent on the procedure to be followed, the proviso to Rule 1 of Order XXVI states that when a commission is issued for interrogatories or any other purpose, reasons must be recorded.
Rule 1 of Order XXVI states that a commission is issued to examine a person who is a resident within the court’s jurisdiction and is exempt from appearing in court or is unable to attend court due to sickness or infirmity. According to section 132 of the CPC, women who, according to the customs or manners of the country, do not appear in public, are exempt from appearing in court. Similarly, section 133 exempts certain important personalities like the President, Supreme Court judges, etc., from appearing in court. Therefore, if such a person needs to be examined, a commission will be issued at the place where that person is.
Circumstances under which a commission is issued:
Rule 4 of Order XXVI states that in addition to the mentioned circumstances, a commission can also be issued when:
i. The person is residing beyond the jurisdiction of the court ii. The person is about to leave the jurisdiction of the court iii. A government servant who cannot attend without detriment to public service (in the opinion of the court)
Commission to whom?:
According to Rule 3 of Order XXVI, when the person to be examined is within the jurisdiction of the court, the commission can be issued to any person whom the court thinks fit. For example, if an authority needs to examine a lady who, by custom, does not appear in public, the commission can be issued to any lady officer deemed suitable by the issuing authority. On the other hand, when the witness resides beyond the jurisdiction of the court, the commission has to be issued to another court within whose jurisdiction the witness resides – Rule 4(2) of Order XXVI. In other words, if an AO needs to issue a commission, it has to be another AO within whose jurisdiction the witness resides.
Powers:
Rule 16 of Order XXVI states that the person to whom the commission is issued (Commissioner) has the following powers:
i. Examine the parties or witnesses they may produce
ii. Call for and examine documents
iii. Enter any building mentioned in the order
Later, the Commissioner (the person to whom the commission is issued) has to submit a report to the authority issuing the commission. This report will be admitted as evidence in the proceedings before such a court.
As seen from the above, a commission is simply the delegation of powers from one authority to another. The authority receiving the commission will exercise the powers of the first authority as mentioned in the commission. The effect of the statement recorded by the Commissioner is the same as if it were recorded by the jurisdictional officer.
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