Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Provision: Section 116 enumerates the classes of income-tax authorities for the purposes of the Act.
Chapter / Part: Chapter XIII (Income-tax Authorities), Part A - Appointment and control.
FA 2026 status: Not amended by the Finance Act, 2026. The clause structure (a) to (h), including clause (cca) - Joint Commissioners (Appeals) inserted by the Finance Act, 2023 w.e.f. 1-4-2023 - stands as printed.
Nature: Definitional / structural. Creates no power by itself; powers flow from the substantive sections read with the Board's directions under sections 118 and 120.
A. SECTION COMMENTARY
Scheme and purpose
Section 116 is the foundation stone of Chapter XIII. It does not confer a single substantive power; it merely lists, in descending order of rank, the classes of officers and the apex body that together constitute the 'income-tax authorities' through whom the Act is administered. Every power of assessment, enquiry, search, survey, transfer and recovery that follows in the Act is exercisable only by an authority answering one of these descriptions, and only to the extent that jurisdiction has been conferred on that authority by or under sections 118, 120 and 127. The section therefore performs a gate-keeping function: an act done by a person who is not an income-tax authority within section 116, or who has not been validly clothed with the relevant jurisdiction, is a nullity.
The apex authority is the Central Board of Direct Taxes, a statutory body constituted under the Central Boards of Revenue Act, 1963. Below it the hierarchy runs through Principal Directors General / Principal Chief Commissioners, Directors General / Chief Commissioners, Principal Directors / Principal Commissioners, Directors / Commissioners / Commissioners (Appeals), Additional Directors / Additional Commissioners / Additional Commissioners (Appeals), Joint Directors / Joint Commissioners / Joint Commissioners (Appeals), Deputy Directors / Deputy Commissioners, Assistant Directors / Assistant Commissioners, Income-tax Officers, Tax Recovery Officers and Inspectors of Income-tax. The dual nomenclature (Director-side and Commissioner-side) reflects the parallel investigation and assessment wings of the Department.
Finance Act, 2023 insertion of the Joint Commissioner (Appeals)
Clause (cca) was amended by the Finance Act, 2023 (with effect from 1 April 2023) to introduce a new appellate authority - the Joint Commissioner of Income-tax (Appeals) - to relieve the docket of the Commissioner (Appeals) by hearing appeals against orders of lower value. The consequential references appear throughout Chapter XIII (for example in the proviso to section 119 and in sections 124 and 127) and in Chapter XX. The Finance Act, 2026 makes no change to the classes listed in section 116.
Quasi-judicial character of the authorities
Although section 116 is descriptive, the authorities it lists are not mere tax-gatherers. From the Income-tax Officer upwards they exercise functions that are, in substance, quasi-judicial - they decide a lis between the assessee and the Revenue, must act fairly, must give reasons and are amenable to writ jurisdiction. This characterisation, settled long ago, governs the manner in which every power in the chapter must be exercised and is the reason that natural justice is read into provisions such as sections 127 and 129 even where the text is silent.
B. STATUTORY POSITION (verbatim text)
Reproduced below is section 116 as it stands in the bare Act (clauses (a) to (h)).
116. There shall be the following classes of income-tax authorities for the purposes of this Act, namely :—
(a) the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963),
(aa) Principal Directors General of Income-tax or Principal Chief Commissioners of Income-tax,
(b) Directors-General of Income-tax or Chief Commissioners of Income-tax,
(ba) Principal Directors of Income-tax or Principal Commissioners of Income-tax,
(c) Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals),
(cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional Commissioners of Income-tax (Appeals),
(cca) Joint Directors of Income-tax or Joint Commissioners of Income-tax [or Joint Commissioners of Income-tax (Appeals)],
(d) Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals),
(e) Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,
(f) Income-tax Officers,
(g) Tax Recovery Officers,
(h) Inspectors of Income-tax.
C. AUTHORITIES
Cluster 1 - Nature of the authorities; powers flow only from statute
There is little litigation on section 116 as such because it is structural. The governing principles come from decisions on the character of the officers listed and on the source of their powers.
Forum / Citation: Supreme Court of India (Constitution Bench), 1954. Reported: (1954) 26 ITR 1 (SC); AIR 1954 SC 545; (1955) 1 SCR 448.
Facts: Challenge to the special procedure for assessing tax evaders; the wider question was the character of proceedings before income-tax officers.
Held: Proceedings before the income-tax authorities are, in substance, judicial proceedings; the officer assessing tax acts in a quasi-judicial capacity and is bound to act judicially. The investigation and assessment functions cannot be exercised arbitrarily.
Principle: The authorities listed in section 116 are quasi-judicial bodies; their acts are tested against fairness, reason and jurisdiction, not against administrative convenience alone.
Relevance: Supplies the lens through which every power in Chapter XIII is read; the foundation for reading natural justice into sections 124, 127 and 129.
Income-tax Officer v. Seth Brothers (1969) 74 ITR 836 (SC)
Forum / Citation: Supreme Court of India, 15 July 1969. Reported: (1969) 74 ITR 836 (SC); AIR 1970 SC 292; (1969) 2 SCC 324; (1970) 1 SCR 601.
Facts: Validity of a search; the Court explained the source and limits of departmental power.
Held: Section 132 (and, by extension, the powers of the authorities under Chapter XIII) confers no arbitrary authority; the officer must act strictly within the statute, must record reasons where required and, if challenged, must satisfy the court of the regularity of his action. Power exercised maliciously or for a collateral purpose is liable to be struck down.
Principle: An income-tax authority possesses only such power as the statute confers and must exercise it strictly within the four corners of the Act.
Relevance: Establishes that status under section 116 is necessary but not sufficient; jurisdiction and statutory pre-conditions must independently exist.
Cluster 2 - Acts of a de facto officer
Where a question is raised about the validity of an officer's appointment or designation, the de facto doctrine protects acts done by an officer in apparent authority.
Gokaraju Rangaraju v. State of Andhra Pradesh (1981) 3 SCC 132 (SC)
Forum / Citation: Supreme Court of India, 1981. Reported: (1981) 3 SCC 132; AIR 1981 SC 1473.
Facts: Validity of judgments delivered by a judge whose appointment was later found defective; the principle is applied across public offices, including revenue officers.
Held: Acts of a de facto officer - one who holds office under colour of lawful authority and discharges its duties - are valid and binding so far as the public and third parties are concerned, notwithstanding a defect in the officer's appointment or qualification.
Principle: A technical infirmity in the appointment of an income-tax authority does not, of itself, invalidate the assessments and orders made by that officer in the discharge of office.
Relevance: Answers the recurring plea that an order is void because the appointing or designating process was irregular; the cure lies in the de facto doctrine, not in nullity.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the bare Act (Chapter XIII, ss. 116-138). Each authority is cited with its full parallel reporter citations as reported; Supreme Court, High Court and Income Tax Appellate Tribunal (ITAT) rulings are identified as such. Where a section has not been directly construed, that is stated candidly and the nearest governing authority is given. For professional reference; not legal advice.
CHAPTER XIII - INCOME-TAX AUTHORITIES
Section 116 - Income-tax Authorities (Classes)
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Provision: Section 116 enumerates the classes of income-tax authorities for the purposes of the Act.
Chapter / Part: Chapter XIII (Income-tax Authorities), Part A - Appointment and control.
FA 2026 status: Not amended by the Finance Act, 2026. The clause structure (a) to (h), including clause (cca) - Joint Commissioners (Appeals) inserted by the Finance Act, 2023 w.e.f. 1-4-2023 - stands as printed.
Nature: Definitional / structural. Creates no power by itself; powers flow from the substantive sections read with the Board's directions under sections 118 and 120.
A. SECTION COMMENTARY
Scheme and purpose
Section 116 is the foundation stone of Chapter XIII. It does not confer a single substantive power; it merely lists, in descending order of rank, the classes of officers and the apex body that together constitute the 'income-tax authorities' through whom the Act is administered. Every power of assessment, enquiry, search, survey, transfer and recovery that follows in the Act is exercisable only by an authority answering one of these descriptions, and only to the extent that jurisdiction has been conferred on that authority by or under sections 118, 120 and 127. The section therefore performs a gate-keeping function: an act done by a person who is not an income-tax authority within section 116, or who has not been validly clothed with the relevant jurisdiction, is a nullity.
The apex authority is the Central Board of Direct Taxes, a statutory body constituted under the Central Boards of Revenue Act, 1963. Below it the hierarchy runs through Principal Directors General / Principal Chief Commissioners, Directors General / Chief Commissioners, Principal Directors / Principal Commissioners, Directors / Commissioners / Commissioners (Appeals), Additional Directors / Additional Commissioners / Additional Commissioners (Appeals), Joint Directors / Joint Commissioners / Joint Commissioners (Appeals), Deputy Directors / Deputy Commissioners, Assistant Directors / Assistant Commissioners, Income-tax Officers, Tax Recovery Officers and Inspectors of Income-tax. The dual nomenclature (Director-side and Commissioner-side) reflects the parallel investigation and assessment wings of the Department.
Finance Act, 2023 insertion of the Joint Commissioner (Appeals)
Clause (cca) was amended by the Finance Act, 2023 (with effect from 1 April 2023) to introduce a new appellate authority - the Joint Commissioner of Income-tax (Appeals) - to relieve the docket of the Commissioner (Appeals) by hearing appeals against orders of lower value. The consequential references appear throughout Chapter XIII (for example in the proviso to section 119 and in sections 124 and 127) and in Chapter XX. The Finance Act, 2026 makes no change to the classes listed in section 116.
Quasi-judicial character of the authorities
Although section 116 is descriptive, the authorities it lists are not mere tax-gatherers. From the Income-tax Officer upwards they exercise functions that are, in substance, quasi-judicial - they decide a lis between the assessee and the Revenue, must act fairly, must give reasons and are amenable to writ jurisdiction. This characterisation, settled long ago, governs the manner in which every power in the chapter must be exercised and is the reason that natural justice is read into provisions such as sections 127 and 129 even where the text is silent.
B. STATUTORY POSITION (verbatim text)
Reproduced below is section 116 as it stands in the bare Act (clauses (a) to (h)).
116. There shall be the following classes of income-tax authorities for the purposes of this Act, namely :—
(a) the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963),
(aa) Principal Directors General of Income-tax or Principal Chief Commissioners of Income-tax,
(b) Directors-General of Income-tax or Chief Commissioners of Income-tax,
(ba) Principal Directors of Income-tax or Principal Commissioners of Income-tax,
(c) Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals),
(cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional Commissioners of Income-tax (Appeals),
(cca) Joint Directors of Income-tax or Joint Commissioners of Income-tax [or Joint Commissioners of Income-tax (Appeals)],
(d) Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals),
(e) Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,
(f) Income-tax Officers,
(g) Tax Recovery Officers,
(h) Inspectors of Income-tax.
C. AUTHORITIES
Cluster 1 - Nature of the authorities; powers flow only from statute
There is little litigation on section 116 as such because it is structural. The governing principles come from decisions on the character of the officers listed and on the source of their powers.
Suraj Mall Mohta & Co. v. A.V. Visvanatha Sastri (1954) 26 ITR 1 (SC)
Forum / Citation: Supreme Court of India (Constitution Bench), 1954. Reported: (1954) 26 ITR 1 (SC); AIR 1954 SC 545; (1955) 1 SCR 448.
Facts: Challenge to the special procedure for assessing tax evaders; the wider question was the character of proceedings before income-tax officers.
Held: Proceedings before the income-tax authorities are, in substance, judicial proceedings; the officer assessing tax acts in a quasi-judicial capacity and is bound to act judicially. The investigation and assessment functions cannot be exercised arbitrarily.
Principle: The authorities listed in section 116 are quasi-judicial bodies; their acts are tested against fairness, reason and jurisdiction, not against administrative convenience alone.
Relevance: Supplies the lens through which every power in Chapter XIII is read; the foundation for reading natural justice into sections 124, 127 and 129.
Income-tax Officer v. Seth Brothers (1969) 74 ITR 836 (SC)
Forum / Citation: Supreme Court of India, 15 July 1969. Reported: (1969) 74 ITR 836 (SC); AIR 1970 SC 292; (1969) 2 SCC 324; (1970) 1 SCR 601.
Facts: Validity of a search; the Court explained the source and limits of departmental power.
Held: Section 132 (and, by extension, the powers of the authorities under Chapter XIII) confers no arbitrary authority; the officer must act strictly within the statute, must record reasons where required and, if challenged, must satisfy the court of the regularity of his action. Power exercised maliciously or for a collateral purpose is liable to be struck down.
Principle: An income-tax authority possesses only such power as the statute confers and must exercise it strictly within the four corners of the Act.
Relevance: Establishes that status under section 116 is necessary but not sufficient; jurisdiction and statutory pre-conditions must independently exist.
Cluster 2 - Acts of a de facto officer
Where a question is raised about the validity of an officer's appointment or designation, the de facto doctrine protects acts done by an officer in apparent authority.
Gokaraju Rangaraju v. State of Andhra Pradesh (1981) 3 SCC 132 (SC)
Forum / Citation: Supreme Court of India, 1981. Reported: (1981) 3 SCC 132; AIR 1981 SC 1473.
Facts: Validity of judgments delivered by a judge whose appointment was later found defective; the principle is applied across public offices, including revenue officers.
Held: Acts of a de facto officer - one who holds office under colour of lawful authority and discharges its duties - are valid and binding so far as the public and third parties are concerned, notwithstanding a defect in the officer's appointment or qualification.
Principle: A technical infirmity in the appointment of an income-tax authority does not, of itself, invalidate the assessments and orders made by that officer in the discharge of office.
Relevance: Answers the recurring plea that an order is void because the appointing or designating process was irregular; the cure lies in the de facto doctrine, not in nullity.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the bare Act (Chapter XIII, ss. 116-138). Each authority is cited with its full parallel reporter citations as reported; Supreme Court, High Court and Income Tax Appellate Tribunal (ITAT) rulings are identified as such. Where a section has not been directly construed, that is stated candidly and the nearest governing authority is given. For professional reference; not legal advice.