TDS authority lacked implied power to seek employer queries under section 131 before the 1999 circular; requisition quashed.

A TDS authority could not invoke section 131 to issue employer queries before the 1999 circular, because section 206 imposes the deduction obligation on the employer while section 131 vests discovery and document-production powers in the Assessing Officer. The Court held that no implied jurisdiction arose merely from the TDS authority's role in enforcing compliance or imposing penalty, so pre-circular requisitions were without authority. The 1999 circular was the first express extension of that power to TDS officials and operated prospectively only. The requisition was therefore quashed, with Revenue left free to proceed under any other available statutory remedy.

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Issues: Whether, prior to the 1999 circular, the TDS official had jurisdiction or implied power to issue queries to the employer under section 131 in connection with deductions under section 206, and whether the later circular could validate such action retrospectively.

Analysis: The scheme of section 206 places on the employer the obligation to deduct tax at source, while section 131 confers powers of discovery, inspection, attendance and production of documents on the Assessing Officer. The Court held that the 1999 circular was the first express extension of such power to TDS officials and that it operated only from its date. Before that express authorization, the TDS official could not assume jurisdiction merely because he was also empowered to act on defaults and impose penalty. Any queries made in the absence of statutory authority were therefore without jurisdiction.

Conclusion: The TDS official had no implied power before 1999 to make the impugned queries under section 131, and the challenge to the requisition succeeded.

Final Conclusion: The appellate court set aside the order under challenge and quashed the requisition, while leaving the Revenue free to proceed in accordance with law if any other statutory remedy remained available.

Ratio Decidendi: A power under the Income-tax Act that is not expressly conferred on a TDS authority cannot be implied from the power to enforce compliance or impose penalty, and a later circular granting that power operates prospectively unless it clearly provides otherwise.

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