Power to transfer cases: modernised transfer framework preserves opportunity to be heard while enabling cross jurisdictional transfers.
Clause 243 empowers designated senior income tax authorities to transfer any "case"-defined to include pending, completed and future proceedings-among Assessing Officers within or across jurisdictions; transfers between different authorities require agreement or, failing that, Board intervention. The clause mandates, where practicable, a reasonable opportunity of being heard and recording of reasons, exempts intra city/locality transfers from prior hearing, permits transfers at any stage without re issuing notices, and consolidates authority designations under the term "specified income tax authority."

Assessing Officer jurisdiction clarified: territorial nexus, strict time bars and internal administrative resolution govern assessment authority.
The clause anchors AO jurisdiction to the taxpayer's principal place of business, profession, or residence and empowers a specified income-tax authority to determine jurisdictional questions, with escalation to the Board where multiple authorities are involved. It mandates strict time limits for raising jurisdictional objections linked to notice service or assessment stages, requires AO referral of unresolved objections before completing assessment, and preserves AO powers over income arising within their area despite jurisdictional disputes.

Centralized jurisdiction and delegation: Board directions reallocate tax authorities' powers, shaping jurisdictional clarity and administrative flexibility.
Clause 241 vests income-tax authorities with powers exercisable in accordance with directions issued by the Board, permits higher authorities to exercise functions of lower authorities, authorizes delegated written orders for subordinates, and sets jurisdictional criteria including territorial area, persons, classes of income and cases. It enables the Board to issue general or special orders empowering specified senior officers to perform others' functions, contains deeming provisions treating references to the Assessing Officer as references to substituted officers and removes certain approval requirements, and expands notification powers to prescribe the manner of returns and designate responsible authorities.

Taxpayer's Charter mandated: statutory duty to adopt a charter, but enforceability and remedies remain undefined.
Clause 240 of the Income Tax Bill, 2025 and Section 119A of the Income-tax Act require the Central Board of Direct Taxes to adopt and declare a Taxpayer's Charter and empower the Board to issue orders, instructions, directions or guidelines for its administration. Both provisions mandate adoption while leaving substantive content, enforceability, remedies, review, and stakeholder consultation to the Board's discretion, creating interpretive issues concerning legal status, variability of protections, and mechanisms for accountability.

Administrative instruction power guides tax authorities, subject to non interference in individual cases and parliamentary oversight.
Clause 239 grants the Board a broad administrative instruction power to issue binding orders and directions to income tax authorities for uniform administration, subject to safeguards: it cannot direct outcomes in individual cases or interfere with appellate discretion. The clause permits targeted interventions-general or special orders for assessment and collection, condonation of belated claims by non appellate authorities, and relaxation of deduction requirements where default is beyond the assessee's control and compliance occurs before completion of assessment-and requires reasons and parliamentary laying of certain relaxation orders.

Control of tax authorities: Board may notify subordination of income-tax authorities, affecting jurisdiction and publication standards.
Clause 238 and Section 118 empower the Board to issue notifications directing that specified income-tax authorities be subordinate to other specified authorities; this confers broad administrative control over hierarchies and supervision while remaining subject to administrative-law limits. A key textual difference is Clause 238's omission of an explicit requirement for publication in the Official Gazette, raising questions about the formal mode of notification, transparency, and enforceability that subordinate rules or judicial interpretation should address.

Appointment of income-tax authorities: Central Government retains primary power with controlled delegation and service-rule safeguards.
Clause 237 vests primary appointment authority for income-tax authorities in the Central Government while authorising delegation to the Board and specified senior officers for appointments below Deputy/Assistant Commissioner, and permits authorised income-tax authorities to appoint executive or ministerial staff, all subject to rules and orders regulating conditions of service and Board authorisation.

Hierarchy of tax authorities clarified: consolidation and streamlined nomenclature aim to centralise appellate functions and improve clarity.
Clause 236 consolidates the hierarchy of income-tax authorities-from the Central Board of Direct Taxes to Inspectors and Tax Recovery Officers-streamlining nomenclature and grouping alternative designations. It notably omits Deputy Commissioners (Appeals), signalling possible consolidation of first-level appellate functions at higher levels, and leaves allocation of specific powers and appellate responsibilities to subordinate rules and notifications.

Tonnage tax exclusion: anti abuse power to remove companies from the regime where transactions lack bona fide commercial purpose.
Clause 234(4)-(7) empowers the Assessing Officer to exclude a tonnage tax company by written order where transactions amount to an abuse of the tonnage tax scheme, operating retrospectively from the first day of the tax year in which the transaction was entered into; exclusion requires prior show cause notice and higher-level approval, and does not apply where the company satisfies the Assessing Officer that the transaction was a bona fide commercial arrangement not entered into for tax advantage.

Anti-abuse safeguards in tonnage tax: exclusion applies where arrangements produce tax advantages for non-eligible activities.
Clause 234(1)-(3) excludes the tonnage tax scheme where a tonnage tax company is party to any transaction or arrangement that constitutes an abuse by resulting, or that would but for the clause have resulted, in a tax advantage for persons other than the tonnage tax company or for the company in respect of its non-tonnage activities. "Tax advantage" includes manipulation of expense or interest allowances or cost allocation affecting non-tonnage income or loss, and transactions producing more than ordinary profits from tonnage tax activities.

Temporary cessation of operations preserves tonnage tax continuity, but temporary loss of qualifying status suspends benefits for that period.
A company is deemed to be operating a qualifying ship for tonnage tax purposes during periods of temporary cessation of operations, so long as the cessation is not permanent; however, a ship that temporarily ceases to meet the statutory criteria of a qualifying ship is excluded from qualifying status for the period of non-qualification and cannot attract tonnage tax benefits during that time.

Continuity of tonnage tax benefits preserves scheme application for qualifying companies after demerger, subject to statutory conditions.
Where a demerged company transfers its business to a resulting company before expiry of its tonnage tax option, the tonnage tax scheme shall, subject to other provisions, apply to the resulting company for the unexpired period if it is a qualifying company; similarly, the demerged company retains its option for the unexpired period if it continues to be a qualifying company, with both continuities conditional on statutory eligibility, procedural compliance, and anti-avoidance requirements.

Continuity of tonnage tax: amalgamated qualifying shipping companies retain the scheme subject to qualifying status and option deadlines.
Clause 233(1)-(4) secures continuity of the tonnage tax regime on amalgamation by applying the scheme to the amalgamated company if it remains a qualifying company, requiring non-tonnage amalgamated companies to elect the scheme within a prescribed short period, granting the amalgamated entity the longest unexpired option period when multiple merging companies are under the scheme, and excluding entities that failed to elect during the original implementation window from accessing the regime post-amalgamation.

Tonnage determination by statutory certificates ensures objective tonnage income computation and limits administrative discretion, aligning with international practice.
The net tonnage for tonnage income must be determined from prescribed certificates: Indian ships by Merchant Shipping Rules or the 1969 Convention certificate as applicable; foreign ships by a DG Shipping licence reflecting Flag State tonnage certificates or other evidence acceptable to the DG; inland vessels by Inland Vessels Act, 2021 certificates. Reliance on statutory certificates is central, reducing subjective measurement and constraining administrative assessment to verification of certificate authenticity.

Tonnage tax compliance: separate books and certified accountant's report required or tonnage tax option lapses for the year.
Clause 232(21) makes the tonnage tax option contingent, each year, on maintaining separate books of account for qualifying ship operations and on furnishing a prescribed, duly signed and verified accountant's report before the specified filing date; failure of either requirement renders the tonnage tax option ineffective for that tax year.

Charter in cap limits chartered tonnage; breach triggers loss of tonnage tax benefit and possible scheme disqualification.
Clause 232(15)-(20) limits chartered in net tonnage for tonnage tax electors, requires assessment on average net tonnage with the averaging method prescribed in consultation with the Director General of Shipping, excludes bareboat charter cum demise vessels from charter in calculations, and prescribes loss of tonnage tax benefit for a year of breach and permanent cessation of the option after two consecutive years of breach.

Minimum training requirement - automatic loss of tonnage tax eligibility after consecutive noncompliance; annual certification required with tax return.
Companies opting for the tonnage tax regime must train trainee officers as per guidelines of the Director-General of Shipping and furnish an annually issued compliance certificate in the prescribed form with their tax return; sustained non-compliance over consecutive years results in automatic cessation of the company's option for the tonnage tax scheme from the year following the concluding year of default. Delegation to the Director-General allows technical adaptability but leaves open statutory ambiguities on thresholds, partial compliance and transitional treatment.

Tonnage Tax Reserve requirement ties tonnage tax access to reinvestment in qualifying shipping assets under the Bill.
Clause 232 conditions tonnage tax access on crediting a specified portion of book profit from qualifying shipping activities to a Tonnage Tax Reserve Account, usable within eight years for acquisition of a new ship or inland vessel; interim restrictions prevent distribution or foreign remittance, and proportional re taxation, carryforward rules, and cessation of the option after sustained default enforce compliance.

Tonnage tax disqualification: companies face a ten-year bar on re-entry after opting out, default, or formal exclusion.
Clause 231(12) bars a qualifying company from opting for the tonnage tax scheme for ten years where the company: voluntarily opts out; defaults in complying with the specified compliance provisions; or has its option excluded by a formal exclusion order, with the disqualification period measured from the date of the triggering event.

Tonnage tax renewal requires timely application and procedural parity with initial grant, subject to eligibility and potential ineligibility period.
Clause 231(10) requires renewal of an approved tonnage tax option within one year from the end of the tax year in which the prior option ceases, with renewal discretionary and subject to approval or refusal by the competent authority. Clause 231(11) imports sub sections (1) to (10) to apply equally to renewals, ensuring procedural parity-application format, eligibility checks, opportunity of being heard, timelines and cessation consequences-but leaves unresolved whether benefits continue during pendency or whether delayed applications may be condoned.