Institutional Framework Of Income Tax Administration In India
- IJLLR Journal
- Nov 20
- 2 min read
Darshanram Karthik S, Chettinad School of Law, Chettinad Academy of Research and Education
Aparna Reddy T, Chettinad School of Law, Chettinad Academy of Research and Education
Mrs. Jehibha N, Assistant Professor of Law, Chettinad School of Law, Chettinad Academy of Research and Education
ABSTRACT
The Income Tax Act, 1961 confers expansive discretionary powers upon income tax authorities for assessment, investigation, and enforcement of direct taxation. This doctrinal research critically examines whether India's constitutional, statutory, and administrative frameworks adequately balance effective tax enforcement with procedural fairness and taxpayer rights protection. The central research problem emanates from the tension between broad discretionary powers vested in tax authorities encompassing scrutiny, search and seizure, assessment, and penalty imposition and constitutional principles of fairness, due process, and reasonableness enshrined in Articles 14 and 21. The study analyses statutory provisions under the Income Tax Act, 1961, particularly Sections 131, 132, 142, 143, and 144, examining textual ambiguities that enable potential arbitrary exercise of authority.
Through comprehensive examination of Supreme Court and High Court jurisprudence, the research evaluates judicial constraints imposed through doctrines of natural justice, proportionality, and reasoned decision-making. The study critically assesses emerging technological innovations including faceless assessment mechanisms under Section 144B, investigating whether digitization enhances transparency or introduces algorithmic opacity and procedural rigidity. Analysis of appellate mechanisms Commissioner (Appeals) and Income Tax Appellate Tribunal reveals systemic delays and inefficiencies affecting remedial accessibility. Research findings indicate that while judicial interventions have fortified procedural safeguards, significant gaps persist in internal accountability mechanisms, appellate effectiveness, and harmonization between enforcement imperatives and taxpayer rights. The study proposes legislative, administrative, and technological reforms including enhanced procedural safeguards, strengthened accountability frameworks, rationalized appellate timelines, and transparent algorithmic governance. This research contributes to direct tax administration scholarship by providing comprehensive doctrinal analysis integrating constitutional law, administrative law, and tax jurisprudence, offering practical recommendations for achieving equitable tax governance within India's digital transformation framework.
Keywords: Income Tax Authorities, Discretionary Powers, Natural Justice, Faceless Assessment, Appellate Mechanisms.
