Section 131 of ITA, 1961 : Section 131: Power Regarding Discovery, Production Of Evidence, Etc

Explanation using Example

Imagine a scenario where the Income Tax Department receives information that Mr. X, a businessman, may have undisclosed income that he has not reported in his tax filings. An Assessing Officer (AO) initiates an investigation into Mr. X's financial affairs under the Income-tax Act, 1961.

Under Section 131 of the Income-tax Act, the AO has powers similar to a court under the Code of Civil Procedure when conducting this investigation. The AO can:

• Request Mr. X to provide certain financial documents for inspection (discovery and inspection).
• Summon Mr. X to appear before the AO to give evidence or produce documents (enforcing the attendance).
• Compel Mr. X to produce his books of account or other documents that are relevant to the investigation (compelling the production of documents).
• If necessary, issue commissions to a third party to conduct an examination or collect evidence on behalf of the AO (issuing commissions).

If Mr. X fails to comply with these requests, the AO has the authority to enforce compliance, just as a court would. This section ensures that the Income Tax authorities have the necessary powers to conduct thorough investigations into potential tax evasion.