Section 120 - Jurisdiction of Income-tax Authorities
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Provision: Section 120 - income-tax authorities exercise their powers and functions in accordance with the Board's directions; provides for assignment of jurisdiction, concurrent jurisdiction, and vesting by reference to territorial area, persons, income or cases.
Chapter / Part: Chapter XIII, Part B - Jurisdiction.
FA 2026 status: Not amended by the Finance Act, 2026.
Nature: The master jurisdiction provision. Source of the Board's notifications and orders that distribute jurisdiction across the Department.
A. SECTION COMMENTARY
The architecture of jurisdiction
Section 120 is the master switch for jurisdiction. It provides that income-tax authorities shall exercise the powers and perform the functions conferred or assigned to them in accordance with the directions the Board may issue. The directions may authorise a higher authority to issue orders distributing jurisdiction, may confer concurrent jurisdiction on more than one authority, and may assign jurisdiction by reference to territorial areas, classes of persons, classes of income or classes of cases. The Explanation makes clear that, where directed by the Board, a higher authority may exercise the powers of a lower one. In short, section 116 says who the authorities are; section 120 says how jurisdiction is parcelled out among them.
Jurisdiction as an objective fact
Because jurisdiction is conferred by or under section 120, it is an objective matter that exists or does not exist independently of the officer's own opinion. An officer cannot clothe himself with jurisdiction by wrongly deciding the fact on which jurisdiction depends (Raza Textiles). Where the jurisdictional foundation is absent - for example, where the assessee does not fall within the territorial or class description assigned to the officer - the resulting proceedings are without authority of law. This is the doctrinal link between section 120 (conferment) and section 124 (the mechanics of objecting to an Assessing Officer's jurisdiction).
Faceless overlay
Section 120 must now be read with the faceless-jurisdiction scheme contemplated by section 130 and with the various e-assessment / faceless schemes notified under the Act, under which jurisdiction is exercised in a team-based, jurisdiction-less manner to the extent technologically feasible. The traditional territorial/class-based allocation under section 120 continues to govern wherever the faceless schemes do not apply.
B. STATUTORY POSITION (verbatim text)
Reproduced below is section 120 as it stands in the bare Act.
120. (1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities.
Explanation.—For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1).
(2) The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it.
(3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :—
(a) territorial area;
(b) persons or classes of persons;
(c) incomes or classes of income; and
(d) cases or classes of cases.
(4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,—
(a) authorise any Principal Director General or Director General or Principal Director or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board;
(b) empower the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply.
(5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply.
(6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification.
C. AUTHORITIES
Cluster 1 - Jurisdiction is objective and examinable; it cannot be assumed by the officer
Forum / Citation: Supreme Court of India, 24 March 1973. Reported: (1973) 87 ITR 539 (SC); (1973) 1 SCC 633; AIR 1973 SC 1362.
Facts: The Income-tax Officer treated a firm as a non-resident (a jurisdictional fact bearing on his power) and the High Court declined to examine the correctness of that finding.
Held: No authority, much less a quasi-judicial authority, can confer jurisdiction on itself by deciding a jurisdictional fact wrongly. Whether the jurisdictional fact has been rightly decided is open to examination by the High Court in certiorari.
Principle: Jurisdiction conferred under section 120 is objective; an erroneous decision on the jurisdictional fact vitiates the exercise of power.
Relevance: The bedrock authority controlling all jurisdiction disputes under sections 120 and 124.
Y. Narayana Chetty v. Income-tax Officer (1959) 35 ITR 388 (SC)
Forum / Citation: Supreme Court of India, 1958. Reported: (1959) 35 ITR 388 (SC); AIR 1959 SC 213; (1959) Supp (1) SCR 189.
Held: The proper and valid assumption of jurisdiction is a condition precedent to a valid exercise of power; where the foundational requirement for jurisdiction is absent, the proceedings and the resulting order are without authority of law.
Principle: Valid conferment/assumption of jurisdiction is a sine qua non for any valid order.
Relevance: Confirms that a defect going to the root of jurisdiction is not a mere irregularity but goes to validity.
Cluster 2 - Allocation of jurisdiction is administrative and constitutionally valid
Pannalal Binjraj v. Union of India (1957) 31 ITR 565 (SC)
Forum / Citation: Supreme Court of India (Constitution Bench), 1957. Reported: (1957) 31 ITR 565 (SC); AIR 1957 SC 397; (1957) SCR 233.
Held: The statutory scheme for allocation and transfer of jurisdiction among income-tax authorities is constitutionally valid and does not offend Article 14; allocation is an administrative arrangement, the assessee's safeguard being against arbitrary or discriminatory exercise.
Principle: The distribution of jurisdiction under section 120 is a valid administrative function; challenge lies only for arbitrariness or mala fides.
Relevance: Establishes the constitutional validity of the jurisdiction-allocation scheme that section 120 administers.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the bare Act (Chapter XIII, ss. 116-138). Each authority is cited with its full parallel reporter citations as reported; Supreme Court, High Court and Income Tax Appellate Tribunal (ITAT) rulings are identified as such. Where a section has not been directly construed, that is stated candidly and the nearest governing authority is given. For professional reference; not legal advice.
CHAPTER XIII - INCOME-TAX AUTHORITIES
Section 120 - Jurisdiction of Income-tax Authorities
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Provision: Section 120 - income-tax authorities exercise their powers and functions in accordance with the Board's directions; provides for assignment of jurisdiction, concurrent jurisdiction, and vesting by reference to territorial area, persons, income or cases.
Chapter / Part: Chapter XIII, Part B - Jurisdiction.
FA 2026 status: Not amended by the Finance Act, 2026.
Nature: The master jurisdiction provision. Source of the Board's notifications and orders that distribute jurisdiction across the Department.
A. SECTION COMMENTARY
The architecture of jurisdiction
Section 120 is the master switch for jurisdiction. It provides that income-tax authorities shall exercise the powers and perform the functions conferred or assigned to them in accordance with the directions the Board may issue. The directions may authorise a higher authority to issue orders distributing jurisdiction, may confer concurrent jurisdiction on more than one authority, and may assign jurisdiction by reference to territorial areas, classes of persons, classes of income or classes of cases. The Explanation makes clear that, where directed by the Board, a higher authority may exercise the powers of a lower one. In short, section 116 says who the authorities are; section 120 says how jurisdiction is parcelled out among them.
Jurisdiction as an objective fact
Because jurisdiction is conferred by or under section 120, it is an objective matter that exists or does not exist independently of the officer's own opinion. An officer cannot clothe himself with jurisdiction by wrongly deciding the fact on which jurisdiction depends (Raza Textiles). Where the jurisdictional foundation is absent - for example, where the assessee does not fall within the territorial or class description assigned to the officer - the resulting proceedings are without authority of law. This is the doctrinal link between section 120 (conferment) and section 124 (the mechanics of objecting to an Assessing Officer's jurisdiction).
Faceless overlay
Section 120 must now be read with the faceless-jurisdiction scheme contemplated by section 130 and with the various e-assessment / faceless schemes notified under the Act, under which jurisdiction is exercised in a team-based, jurisdiction-less manner to the extent technologically feasible. The traditional territorial/class-based allocation under section 120 continues to govern wherever the faceless schemes do not apply.
B. STATUTORY POSITION (verbatim text)
Reproduced below is section 120 as it stands in the bare Act.
120. (1) Income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with such directions as the Board may issue for the exercise of the powers and performance of the functions by all or any of those authorities.
Explanation.—For the removal of doubts, it is hereby declared that any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of the income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1).
(2) The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it.
(3) In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :—
(a) territorial area;
(b) persons or classes of persons;
(c) incomes or classes of income; and
(d) cases or classes of cases.
(4) Without prejudice to the provisions of sub-sections (1) and (2), the Board may, by general or special order, and subject to such conditions, restrictions or limitations as may be specified therein,—
(a) authorise any Principal Director General or Director General or Principal Director or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board;
(b) empower the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to issue orders in writing that the powers and functions conferred on, or as the case may be, assigned to, the Assessing Officer by or under this Act in respect of any specified area or persons or classes of persons or incomes or classes of income or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director, and, where any order is made under this clause, references in any other provision of this Act, or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply.
(5) The directions and orders referred to in sub-sections (1) and (2) may, wherever considered necessary or appropriate for the proper management of the work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area or persons or classes of persons or incomes or classes of income or cases or classes of cases; and, where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct, and, further, references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply.
(6) Notwithstanding anything contained in any direction or order issued under this section, or in section 124, the Board may, by notification in the Official Gazette, direct that for the purpose of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons, the income-tax authority exercising and performing the powers and functions in relation to the said person or class of persons shall be such authority as may be specified in the notification.
C. AUTHORITIES
Cluster 1 - Jurisdiction is objective and examinable; it cannot be assumed by the officer
Raza Textiles Ltd. v. Income-tax Officer (1973) 87 ITR 539 (SC)
Forum / Citation: Supreme Court of India, 24 March 1973. Reported: (1973) 87 ITR 539 (SC); (1973) 1 SCC 633; AIR 1973 SC 1362.
Facts: The Income-tax Officer treated a firm as a non-resident (a jurisdictional fact bearing on his power) and the High Court declined to examine the correctness of that finding.
Held: No authority, much less a quasi-judicial authority, can confer jurisdiction on itself by deciding a jurisdictional fact wrongly. Whether the jurisdictional fact has been rightly decided is open to examination by the High Court in certiorari.
Principle: Jurisdiction conferred under section 120 is objective; an erroneous decision on the jurisdictional fact vitiates the exercise of power.
Relevance: The bedrock authority controlling all jurisdiction disputes under sections 120 and 124.
Y. Narayana Chetty v. Income-tax Officer (1959) 35 ITR 388 (SC)
Forum / Citation: Supreme Court of India, 1958. Reported: (1959) 35 ITR 388 (SC); AIR 1959 SC 213; (1959) Supp (1) SCR 189.
Held: The proper and valid assumption of jurisdiction is a condition precedent to a valid exercise of power; where the foundational requirement for jurisdiction is absent, the proceedings and the resulting order are without authority of law.
Principle: Valid conferment/assumption of jurisdiction is a sine qua non for any valid order.
Relevance: Confirms that a defect going to the root of jurisdiction is not a mere irregularity but goes to validity.
Cluster 2 - Allocation of jurisdiction is administrative and constitutionally valid
Pannalal Binjraj v. Union of India (1957) 31 ITR 565 (SC)
Forum / Citation: Supreme Court of India (Constitution Bench), 1957. Reported: (1957) 31 ITR 565 (SC); AIR 1957 SC 397; (1957) SCR 233.
Held: The statutory scheme for allocation and transfer of jurisdiction among income-tax authorities is constitutionally valid and does not offend Article 14; allocation is an administrative arrangement, the assessee's safeguard being against arbitrary or discriminatory exercise.
Principle: The distribution of jurisdiction under section 120 is a valid administrative function; challenge lies only for arbitrariness or mala fides.
Relevance: Establishes the constitutional validity of the jurisdiction-allocation scheme that section 120 administers.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text reproduced verbatim from the bare Act (Chapter XIII, ss. 116-138). Each authority is cited with its full parallel reporter citations as reported; Supreme Court, High Court and Income Tax Appellate Tribunal (ITAT) rulings are identified as such. Where a section has not been directly construed, that is stated candidly and the nearest governing authority is given. For professional reference; not legal advice.