An order issued by the Central Board of Direct Taxes, as F. No. 225/53/2020/ITA-II, dated 31 May 2021. Issued under section 138(1)(a).
A short order of the Board under section 138(1)(a) amending its earlier order of 21.07.2020, which had authorised the sharing of taxpayer information through the NATGRID platform with a list of central agencies. This order adds one further entry to that list — State Police Agencies notified by the Central Government in connection with the NATGRID project — and directs that the memorandum of understanding behind the arrangement be amended to match.
This is an order of the Board. An order is issued under a power the Act itself gives the Board — most often section 119, which lets it direct its own officers and, in the cases the section names, relax a requirement. Read the enabling words before deciding how far it reaches: the power is administrative, and it cannot rewrite the charge.
In partial modification of its order dated 21.07.2020, the Board inserts at serial number 11 of paragraph 1 of that order 'State Police Agencies as notified by the Central Government in connection with NATGRID project'. To make the sharing work in practice, the memorandum of understanding entered into between the Director General of Income-tax (Systems) and NATGRID is to be suitably amended to include those notified State Police Agencies, and a copy of the amended memorandum is to be forwarded to the division for record. All other contents of the order of 21.07.2020 — the specified authority, the classes of information and the conditions of sharing — remain unchanged.
The NATGRID platform was set up so that designated agencies could query databases held across government. The Board's order of 21.07.2020 brought the income-tax database into that arrangement for a list of central agencies. State police forces were afterwards brought into the NATGRID project by the Central Government, and without an amendment to the section 138 order they would have had no lawful route to income-tax information through the platform. This order supplies it.
The order works on the department: it enlarges the list of agencies to which the Director General of Income-tax (Systems) may furnish information. It confers nothing on an assessee and asks nothing of him, though his information is what moves. The department is held to it as it is to any Board order; a court or the Tribunal asked whether a disclosure was lawful decides that question for itself.
Operative from 31.05.2021, by way of partial modification of the order of 21.07.2020. No deadline is fixed, though the memorandum of understanding is to be amended and a copy sent to the division.
Sharing under section 138(1)(a) goes no further than the order authorises. The addition covers State Police Agencies that the Central Government has actually notified for the NATGRID project, not state police generally. Note also that this order does not itself list what is shared: the classes of information stay in paragraph 1 of the order of 21.07.2020, which has to be read with it.
To facilitate the process of furnishing and receiving information, Memorandum of Understanding ('MoU') entered between Director General of Income-tax (Systems) and NATGRID shall be suitably amended to include the State Police Agencies notified by the Central Government in connection with NATGRID Project.
— the Central Board of Direct Taxes, order F. No. 225/53/2020/ITA-II, 31 May 2021. Read it in the department’s own PDF.
| Under the Income-tax Act, 1961 | Now, in the Income-tax Act, 2025 |
|---|---|
| section 138 | section 258 |
What here is the Board’s and what is ours. The document is the Central Board of Direct Taxes’ own. Its number, its date and the words quoted above are reproduced from the Board’s own PDF, which is here. Everything else on this page is ours: the plain-English account of what the document is and what it does, the reading of which provision it turns on, the note on what to watch, and the choice of cases. Where our account and the document part, the document governs.
An order of the Board binds the department, not you and not a court. The Board writes to its own officers. An assessee may hold the department to an order or an instruction that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves. This is the most common mistake made with this material, and it is worth making twice: a direction of the Board is not a section of the Act.
We did not read all of it. The department’s file returned only part of this document to us, so what is written above is written from the part we could read. Open the PDF before you rely on it.
What we could not settle. The scan reads the date line as '3rd May, 2021'; the Board's own listing gives 31.05.2021 and that is used here. The classes of information shared are in the order of 21.07.2020 and not in this document.