In case of scrutiny case under section 143(2) , many times , the tax payer or his authorized representative -a chartered accountant or a tax practitioner- feel that the A.O is not understanding their , otherwise , easy explanation on an issue and thinks of approaching the senior officer when. Such a scenario was actually perceived by the legislature and therefore it was provided under Income tax Act that an assessee can apply for intervention in the scrutiny proceeding before higher tax authority even during the pendency of assessment proceeding under Income Tax Act.
Scrutiny Proceeding : Approach Higher Authority u/s 144A
Let us see what the provision of Section 144A states
144A. A Joint Commissioner may, on his own motion or on a reference being made to him by the Assessing Officer or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient so to do, he may issue such directions as he thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and such directions shall be binding on the Assessing Officer :
Provided that no directions which are prejudicial to the assessee shall be issued before an opportunity is given to the assessee to be heard.
Explanation.—For the purposes of this section no direction as to the lines on which an investigation connected with the assessment should be made, shall be deemed to be a direction prejudicial to the assessee.
Power of Jt .Commissioner to Interfere in Scrutiny Proceeding
Section 144A of the Income Tax Act gives exclusive power to only one income tax authority i.e Range head either as Joint Commissioner or Addl.CIT of the range
- A joint commissioner or addl.CIT or an Assessing Officer or an assessee can invoke provision u/s 144A .
- An assessee can submit application before Joint Commissioner under whom his/her A.O is working and seek direction to the A.O on any point related to case in which assessment is mending.
- A.O can also approach the Joint CIT or Addl.CIT and seek his guidance on an issue involved in scrutiny assessment .
- Even joint commissioner can on his own motion can given direction to the assessing officer .
What is the value of direction u/s 144A ?
The direction given by Joint/Adl.CIT under section 144A is binding on the assessing officer even if he /she personally does not agree with it.
The direction , which is against the assessee can not be given without affording opportunity to the assessee .
Whether Addl.CIT or Jt.CIT can himself pass scrutiny assessment order u/s 144A ?
No so held by ITAT, Lucknow Bench in in Microfin Securities P Ltd vs Addl.CIT [ 3 SOT 302 (LUCKNOW) in
after the proceedings under section 144A get initiated, the Joint Commissioner himself cannot act as Assessing Officer and pass an assessment order under his own signatures. Naturally, such a situation, presupposes existence of two separate and distinct ‘authorities’, one who gives instructions and two, who receives the directions and implements the same strictly as such directions are of binding nature.
Therefore, once you feel that in an scrutiny case , the assessing officer despite , your best effort or presentation on an issue is either not understanding or hell bent on not understating , you can seek the direction from the Range head i.e Jt.CIT or Addl.DIT u/s 144A of the Income tax Act.