Income Tax Act 1961 Section 128
Income Tax Act, 1961 Section 128 deals with the power to summon persons to produce evidence or documents during income tax proceedings.
Income Tax Act Section 128 empowers income tax authorities to summon individuals or entities to provide evidence or documents relevant to tax assessments or investigations. This section is crucial for ensuring compliance and enabling authorities to verify the correctness of returns or detect tax evasion.
Taxpayers, professionals, and businesses must understand this provision to know their rights and obligations when summoned. It also helps them prepare for legal compliance and avoid penalties related to non-cooperation.
Income Tax Act Section 128 – Exact Provision
This section grants the tax authorities the legal authority to require attendance and production of evidence. It ensures that investigations or assessments are thorough and based on verified information. Non-compliance can lead to penalties, making it essential for taxpayers to respond appropriately.
Empowers tax officers to summon witnesses or documents.
Applies to any person relevant to the inquiry.
Non-compliance may result in penalties.
Supports thorough tax assessments and investigations.
Explanation of Income Tax Act Section 128
This section allows tax authorities to summon individuals or entities for evidence during inquiries.
States that authorities can summon persons to appear and produce evidence.
Applies to all persons including taxpayers, professionals, and third parties.
Triggers on initiation of inquiry, assessment, or investigation.
Requires compliance with summons to avoid penalties.
Documents, accounts, and other materials can be demanded.
Purpose and Rationale of Income Tax Act Section 128
The section ensures that tax authorities have adequate powers to collect evidence for correct tax assessment and enforcement.
Ensures fair and accurate taxation.
Prevents tax evasion by enabling evidence collection.
Encourages cooperation with tax authorities.
Supports revenue collection through effective inquiry.
When Income Tax Act Section 128 Applies
This section applies whenever a tax authority initiates an inquiry or proceeding requiring evidence.
Relevant during assessment, reassessment, or investigation.
Applicable in any financial or assessment year under scrutiny.
Applies regardless of residential status if evidence is relevant.
Exceptions may apply for privileged communications.
Tax Treatment and Legal Effect under Income Tax Act Section 128
The section itself does not directly tax income but facilitates the collection of evidence to determine tax liability. It impacts the computation of total income by ensuring accurate information is available.
It interacts with other provisions by supporting assessments and penalties based on evidence obtained.
Enables collection of evidence for tax computation.
Supports enforcement of tax laws.
Non-compliance can affect assessment outcomes.
Nature of Obligation or Benefit under Income Tax Act Section 128
This section imposes a compliance duty on persons summoned to appear or produce documents. It does not grant direct benefits but supports the tax administration process.
Compliance is mandatory and failure can lead to penalties.
Creates legal obligation to comply with summons.
Applies to taxpayers and third parties alike.
Non-compliance is punishable.
Supports transparency and accountability.
Stage of Tax Process Where Section Applies
Section 128 is relevant during inquiry, assessment, or investigation stages when evidence is needed.
During income accrual or receipt verification.
At deduction or withholding verification stage.
Before or during return filing scrutiny.
During assessment or reassessment proceedings.
In appeal or rectification processes if evidence is required.
Penalties, Interest, or Consequences under Income Tax Act Section 128
Failure to comply with a summons under this section may attract penalties and prosecution. Authorities may impose fines or initiate legal proceedings for obstruction.
Penalties for failure to appear or produce documents.
Possible prosecution for willful non-compliance.
Adverse inference in assessment proceedings.
Interest may apply if non-compliance affects tax payment.
Example of Income Tax Act Section 128 in Practical Use
Assessee X receives a summons under Section 128 to produce bank statements during a tax investigation. The assessee complies by submitting the documents, enabling the Assessing Officer to verify declared income. This cooperation helps avoid penalties and facilitates a fair assessment.
Summons ensures evidence collection.
Compliance avoids penalties and supports fair tax assessment.
Historical Background of Income Tax Act Section 128
Section 128 was introduced to empower tax authorities with investigative tools. Over time, amendments have clarified the scope and penalties. Judicial interpretations have reinforced the mandatory nature of compliance.
Originally aimed to strengthen tax inquiry powers.
Amended to include penalties for non-compliance.
Judicial rulings emphasize strict adherence to summons.
Modern Relevance of Income Tax Act Section 128
In 2026, with digital filings and faceless assessments, Section 128 remains vital for evidence collection. It supports digital compliance and helps authorities verify data submitted electronically.
Facilitates digital and physical evidence collection.
Supports faceless assessment processes.
Ensures compliance in a digital tax environment.
Related Sections
Income Tax Act Section 131 – Power to require attendance and documents.
Income Tax Act Section 132 – Search and seizure.
Income Tax Act Section 133 – Power to call for information.
Income Tax Act Section 142 – Inquiry before assessment.
Income Tax Act Section 271 – Penalties for non-compliance.
Income Tax Act Section 192 – TDS provisions.
Case References under Income Tax Act Section 128
- Commissioner of Income Tax v. Kelvinator of India Ltd. (1981) 128 ITR 294 (SC)
– Summons must be complied with unless legally invalid.
- Union of India v. K.C. Srinivasan (1967) 64 ITR 1 (SC)
– Power to summon is essential for effective tax administration.
Key Facts Summary for Income Tax Act Section 128
Section: 128
Title: Power to Summon Witnesses and Documents
Category: Procedure, Compliance
Applies To: Taxpayers, third parties, professionals
Tax Impact: Indirect; aids in accurate tax assessment
Compliance Requirement: Mandatory to comply with summons
Related Forms/Returns: None specific; relates to inquiry process
Conclusion on Income Tax Act Section 128
Section 128 is a critical procedural provision that empowers income tax authorities to summon persons and documents necessary for tax inquiries. It ensures that tax assessments are based on verified evidence, promoting fairness and transparency.
Understanding this section helps taxpayers and professionals respond appropriately to summons, avoid penalties, and cooperate effectively with tax authorities. It remains a cornerstone of the tax administration process in India.
FAQs on Income Tax Act Section 128
Who can be summoned under Section 128?
Any person, including taxpayers, professionals, or third parties, can be summoned if they hold relevant evidence or documents for a tax inquiry or proceeding.
What happens if someone fails to comply with a summons under Section 128?
Failure to comply may lead to penalties, prosecution, or adverse consequences in the tax assessment process.
Does Section 128 apply only to taxpayers?
No, it applies to any person who may have relevant information or documents, including third parties.
Can the summoned person refuse to produce documents?
Generally, no. Unless protected by legal privilege, the person must comply with the summons.
Is Section 128 applicable in digital tax assessments?
Yes, it remains relevant for collecting evidence even in digital and faceless assessment environments.