Section 118 of the Income-tax Act, 1961: Control of Income-tax Authorities
Section 118 empowered the Central Board of Direct Taxes (CBDT) to determine which income-tax authorities were subordinate to other authorities by issuing a notification in the Official Gazette. The corresponding provision under the Income-tax Act, 2025 is Section 238.
Text of Section 118 of the Income-tax Act, 1961
Control of income-tax authorities.
The Board may, by notification in the Official Gazette, direct that any income-tax authority or authorities specified in the notification shall be subordinate to such other income-tax authority or authorities as may be specified in such notification.
Section 118 was substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1 April 1988. See the Income Tax Department's Section 118 text.
Meaning and scope of Section 118
The term Board refers to the Central Board of Direct Taxes, constituted under the Central Boards of Revenue Act, 1963. A notification is a formal instrument used to specify the administrative reporting and subordination relationships among identified income-tax authorities. The section does not itself list a permanent hierarchy; it authorises the CBDT to specify one through notifications.
Subordination describes the administrative relationship between income-tax authorities. It must be distinguished from the separate statutory rules governing jurisdiction, assessment powers, appeals and the exercise of quasi-judicial functions. A reporting relationship does not, by itself, authorise an officer to decide a matter outside the powers conferred by law.
Section 238 of the Income-tax Act, 2025
Control of income-tax authorities.
The Board may, by notification, direct that any income-tax authority or authorities specified in the notification shall be subordinate to such other income-tax authority or authorities as specified in such notification.
Section 238 carries forward the substance of the earlier provision in simplified language. The parliamentary committee's discussion of clause 238 described the change as textual simplification without a policy change. The applicable notification should always be checked for the relevant period and officer.
How control of income-tax authorities works
| Question | Practical explanation |
|---|---|
| Who specifies subordination? | The CBDT, by notification. |
| Which officers may be covered? | The income-tax authorities identified in the applicable notification. |
| Is the hierarchy fixed in the section? | No. The notification identifies the relevant subordinate and superior authorities. |
| Does this provision alone confer assessment jurisdiction? | No. Jurisdiction and specific powers are governed by other provisions and valid orders or directions. |
Related legal provisions
Under the 1961 Act, Section 116 identified classes of income-tax authorities; Section 117 dealt with their appointment; Section 119 concerned CBDT instructions; and Section 120 governed jurisdiction. These provisions should be read together rather than treating Section 118 as an independent grant of all administrative or assessment powers.
Illustrative example
Suppose the CBDT issues a valid notification specifying that a particular class of Commissioners is subordinate to a designated Chief Commissioner. The reporting relationship follows the notification, subject to its wording and effective date. Whether a Commissioner can exercise a particular assessment or appellate function is a separate question requiring examination of the relevant statute and jurisdictional orders.
Official legal references
- Income Tax Department - Section 118, Income-tax Act, 1961
- Income Tax Department - consolidated 1961 Act (PDF)
- Income Tax Department - current Acts, notifications and circulars
- CBDT Notification No. 68/2014 - illustration of Section 118 notification
This article provides general legal information. For a particular dispute, verify the governing Act, notifications, effective dates and jurisdictional orders.