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CA Final · Direct Tax Laws & International Taxation · Provisions to Counteract Unethical Tax Practices

Under the Income-tax Act, 2025, the Board wishes to share information obtained by an income-tax authority with an officer performing functions under a law relating to imposition of any tax, duty or cess. Which statement correctly reflects section 258(1)?

The Board, or an income-tax authority specified by it by order, may furnish information to officers under tax, duty, cess or foreign exchange laws. The condition is that, in its opinion, the information is necessary for those officers to perform their functions. Assessee consent or a court order is not required.

  1. AThe Board may furnish the information only after the assessee gives written consent
  2. BThe Board or an authority specified by it by order may furnish information that, in its opinion, is necessary to enable that officer to perform functions under that lawCorrect
  3. CInformation can be shared only with officers administering foreign exchange law, not with tax or duty officers
  4. DInformation can be shared only through a court order obtained by the Board

Explanation

Section 258(1)(a) lets the Board, or an authority specified by it by order, furnish information to officers under laws on tax, duty or cess or foreign exchange dealings. The test is that, in the Board's or authority's opinion, the information is necessary for that officer's functions. No assessee consent or court order is required, and tax/duty officers are expressly covered, so the other options are wrong.

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