Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Provision: Section 124 - fixes the jurisdiction of an Assessing Officer (territory / persons / income / cases); sub-section (3) bars an assessee from raising a jurisdiction objection after the time/stage specified; sub-section (4) provides for reference to higher authority where a dispute arises.
Chapter / Part: Chapter XIII, Part B - Jurisdiction.
FA 2026 status: Not amended by the Finance Act, 2026.
Nature: The operative jurisdiction-and-objection provision for assessments. Frequently litigated, especially the sub-section (3) time-bar on jurisdiction objections.
A. SECTION COMMENTARY
Conferment, the time-bar and the dispute mechanism
Section 124 operates at the level of the individual case. Where, by a direction or order under section 120, jurisdiction has been assigned to an Assessing Officer over an area, a class of persons, a class of income or a class of cases, the Assessing Officer has jurisdiction over the assessees answering that description. Sub-section (3) is the practically important part: it bars the assessee from calling in question the jurisdiction of an Assessing Officer after the expiry of the time specified (broadly, after the time for filing a return / one month from the notice / completion of assessment, as the case may be). Sub-section (4) provides that where the assessee does raise the objection in time and a question of jurisdiction arises, it is to be determined by the higher authorities (the Principal/Director General, Chief Commissioner or Commissioner) before the assessment is made.
Two kinds of 'jurisdiction' - and why the distinction matters
The case law draws a vital distinction. Section 124(3) bars a belated objection to territorial or assignment jurisdiction - the question of which officer, among officers all competent under the Act, is the right one to assess this assessee. It does not, and cannot, cure a fundamental absence of jurisdiction - for example, an assumption of power without satisfying a statutory condition precedent (such as a valid section 148 reason to believe), which goes to the root and renders the proceeding void. A defect of the first kind is waived if not raised in time (Hindustan Transport Co.); a defect of the second kind goes to validity and is not saved by section 124(3) (Raza Textiles; Y. Narayana Chetty).
Practical guidance
For the practitioner the lesson is procedural discipline: an objection to the Assessing Officer's territorial or assignment jurisdiction must be raised at the threshold, within the section 124(3) window, and pressed for determination under section 124(4); if it is not, it is lost. By contrast, a contention that the very assumption of jurisdiction was bad for want of a statutory condition precedent can be raised later, because it attacks the existence of jurisdiction rather than its allocation.
B. STATUTORY POSITION (verbatim text)
Reproduced below is section 124 as it stands in the bare Act.
124. (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction—
(a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and
(b) in respect of any other person residing within the area.
(2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners, by the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify.
(3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer—
(a) where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier;
(b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier;
(c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.
(4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made.
(5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120.
C. AUTHORITIES
Cluster 1 - The section 124(3) time-bar on objections to jurisdiction
Hindustan Transport Co. v. IAC (1991) 189 ITR 326 (All) (Full Bench)
Forum / Citation: Allahabad High Court (Full Bench), 1991. Reported: (1991) 189 ITR 326 (All) (FB).
Facts: The assessee sought to question the Assessing Officer's territorial jurisdiction after the stage at which section 124(3) permits such an objection.
Held: Once the period/stage specified in section 124(3) has passed, the assessee is precluded from calling in question the jurisdiction of the Assessing Officer; the objection to territorial/assignment jurisdiction is one that must be taken within time, failing which it is deemed waived and the assessment cannot be assailed on that ground.
Principle: A belated objection to an Assessing Officer's territorial/assignment jurisdiction is barred by section 124(3); such jurisdiction can be waived.
Relevance: The leading authority on the operation of the sub-section (3) bar.
Facts: Assessment framed by an officer whose territorial jurisdiction the assessee disputed; question of the manner and timing of raising the objection and of inter-officer transfer of jurisdiction.
Held: Questions of an Assessing Officer's territorial jurisdiction must be raised in accordance with section 124(3) and resolved under section 124(4); the Court examined the interplay between assignment of jurisdiction and the procedure for objecting, and the consequences of a failure to follow it.
Principle: The statutory mechanism of section 124(3)/(4) is the appointed route for jurisdiction objections; it must be invoked in time and in the prescribed manner.
Relevance: A modern High Court application of the section 124 objection machinery.
Cluster 2 - Section 124(3) does not cure a fundamental want of jurisdiction
Forum / Citation: Supreme Court of India, 24 March 1973. Reported: (1973) 87 ITR 539 (SC); (1973) 1 SCC 633; AIR 1973 SC 1362.
Held: Jurisdiction cannot be assumed by deciding a jurisdictional fact wrongly; the existence of jurisdiction is objectively examinable. A fundamental absence of jurisdiction is not a matter of mere irregularity.
Principle: Where jurisdiction is wanting at its root, the proceeding is void; this is distinct from the allocation question waived under section 124(3).
Relevance: Draws the line between waivable allocation defects and non-waivable fundamental defects.
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: A valid assumption of jurisdiction is a condition precedent to a valid order; absence of the statutory foundation for jurisdiction renders the proceedings void, and such a defect is not cured by the assessee's conduct.
Principle: A jurisdictional defect going to the root is not waived by the section 124(3) bar.
Relevance: Confirms the limit of the sub-section (3) bar.
Cluster 3 - Tribunal (ITAT): jurisdiction void where the transfer/assignment is itself invalid
The Tribunal has applied the distinction between a waivable allocation defect (barred by s.124(3)) and a non-waivable inherent want of jurisdiction.
Forum / Citation: Income Tax Appellate Tribunal, Delhi Bench. Reported: (2026) 183 taxmann.com 96 (Delhi - Trib.).
Facts: A corporate assessee's case was transferred and assessed pursuant to a section 127 order passed by an authority that did not itself have jurisdiction; the Department invoked the section 124(3) bar against the assessee's belated jurisdiction objection.
Held: Where a case is transferred by an authority who inherently lacks jurisdiction, the section 127 transfer order is void ab initio; once the foundation fails, all consequential proceedings - the draft assessment under section 144C(1), the DRP directions and the final assessment under section 143(3) read with section 144C(13) - are nullities in law. The section 124(3) bar on belated objections does not apply to an inherent lack of jurisdiction, which is not cured by waiver or participation (sublato fundamento cadit opus).
Principle: A void transfer/assignment cannot be saved by the section 124(3) time-bar; an inherent jurisdictional defect renders the whole assessment a nullity.
Relevance: A recent Tribunal application of the Raza Textiles / Y. Narayana Chetty line, distinguishing waivable allocation defects from non-waivable inherent defects.
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 124 - Jurisdiction of Assessing Officers
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Provision: Section 124 - fixes the jurisdiction of an Assessing Officer (territory / persons / income / cases); sub-section (3) bars an assessee from raising a jurisdiction objection after the time/stage specified; sub-section (4) provides for reference to higher authority where a dispute arises.
Chapter / Part: Chapter XIII, Part B - Jurisdiction.
FA 2026 status: Not amended by the Finance Act, 2026.
Nature: The operative jurisdiction-and-objection provision for assessments. Frequently litigated, especially the sub-section (3) time-bar on jurisdiction objections.
A. SECTION COMMENTARY
Conferment, the time-bar and the dispute mechanism
Section 124 operates at the level of the individual case. Where, by a direction or order under section 120, jurisdiction has been assigned to an Assessing Officer over an area, a class of persons, a class of income or a class of cases, the Assessing Officer has jurisdiction over the assessees answering that description. Sub-section (3) is the practically important part: it bars the assessee from calling in question the jurisdiction of an Assessing Officer after the expiry of the time specified (broadly, after the time for filing a return / one month from the notice / completion of assessment, as the case may be). Sub-section (4) provides that where the assessee does raise the objection in time and a question of jurisdiction arises, it is to be determined by the higher authorities (the Principal/Director General, Chief Commissioner or Commissioner) before the assessment is made.
Two kinds of 'jurisdiction' - and why the distinction matters
The case law draws a vital distinction. Section 124(3) bars a belated objection to territorial or assignment jurisdiction - the question of which officer, among officers all competent under the Act, is the right one to assess this assessee. It does not, and cannot, cure a fundamental absence of jurisdiction - for example, an assumption of power without satisfying a statutory condition precedent (such as a valid section 148 reason to believe), which goes to the root and renders the proceeding void. A defect of the first kind is waived if not raised in time (Hindustan Transport Co.); a defect of the second kind goes to validity and is not saved by section 124(3) (Raza Textiles; Y. Narayana Chetty).
Practical guidance
For the practitioner the lesson is procedural discipline: an objection to the Assessing Officer's territorial or assignment jurisdiction must be raised at the threshold, within the section 124(3) window, and pressed for determination under section 124(4); if it is not, it is lost. By contrast, a contention that the very assumption of jurisdiction was bad for want of a statutory condition precedent can be raised later, because it attacks the existence of jurisdiction rather than its allocation.
B. STATUTORY POSITION (verbatim text)
Reproduced below is section 124 as it stands in the bare Act.
124. (1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction—
(a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and
(b) in respect of any other person residing within the area.
(2) Where a question arises under this section as to whether an Assessing Officer has jurisdiction to assess any person, the question shall be determined by the Principal Director General or Director General or the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner; or where the question is one relating to areas within the jurisdiction of different Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners, by the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners concerned or, if they are not in agreement, by the Board or by such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, specify.
(3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer—
(a) where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier;
(b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier;
(c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.
(4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made.
(5) Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120.
C. AUTHORITIES
Cluster 1 - The section 124(3) time-bar on objections to jurisdiction
Hindustan Transport Co. v. IAC (1991) 189 ITR 326 (All) (Full Bench)
Forum / Citation: Allahabad High Court (Full Bench), 1991. Reported: (1991) 189 ITR 326 (All) (FB).
Facts: The assessee sought to question the Assessing Officer's territorial jurisdiction after the stage at which section 124(3) permits such an objection.
Held: Once the period/stage specified in section 124(3) has passed, the assessee is precluded from calling in question the jurisdiction of the Assessing Officer; the objection to territorial/assignment jurisdiction is one that must be taken within time, failing which it is deemed waived and the assessment cannot be assailed on that ground.
Principle: A belated objection to an Assessing Officer's territorial/assignment jurisdiction is barred by section 124(3); such jurisdiction can be waived.
Relevance: The leading authority on the operation of the sub-section (3) bar.
Abhishek Jain v. ITO (2018) 405 ITR 1 (Del)
Forum / Citation: Delhi High Court, 2018. Reported: (2018) 405 ITR 1 (Del); (2018) 94 taxmann.com 355; (2018) 256 Taxman 384.
Facts: Assessment framed by an officer whose territorial jurisdiction the assessee disputed; question of the manner and timing of raising the objection and of inter-officer transfer of jurisdiction.
Held: Questions of an Assessing Officer's territorial jurisdiction must be raised in accordance with section 124(3) and resolved under section 124(4); the Court examined the interplay between assignment of jurisdiction and the procedure for objecting, and the consequences of a failure to follow it.
Principle: The statutory mechanism of section 124(3)/(4) is the appointed route for jurisdiction objections; it must be invoked in time and in the prescribed manner.
Relevance: A modern High Court application of the section 124 objection machinery.
Cluster 2 - Section 124(3) does not cure a fundamental want of jurisdiction
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.
Held: Jurisdiction cannot be assumed by deciding a jurisdictional fact wrongly; the existence of jurisdiction is objectively examinable. A fundamental absence of jurisdiction is not a matter of mere irregularity.
Principle: Where jurisdiction is wanting at its root, the proceeding is void; this is distinct from the allocation question waived under section 124(3).
Relevance: Draws the line between waivable allocation defects and non-waivable fundamental defects.
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: A valid assumption of jurisdiction is a condition precedent to a valid order; absence of the statutory foundation for jurisdiction renders the proceedings void, and such a defect is not cured by the assessee's conduct.
Principle: A jurisdictional defect going to the root is not waived by the section 124(3) bar.
Relevance: Confirms the limit of the sub-section (3) bar.
Cluster 3 - Tribunal (ITAT): jurisdiction void where the transfer/assignment is itself invalid
The Tribunal has applied the distinction between a waivable allocation defect (barred by s.124(3)) and a non-waivable inherent want of jurisdiction.
Kunshan Q Tech Microelectronics (India) (P.) Ltd. v. DCIT (2026) 183 taxmann.com 96 (Delhi - Trib.)
Forum / Citation: Income Tax Appellate Tribunal, Delhi Bench. Reported: (2026) 183 taxmann.com 96 (Delhi - Trib.).
Facts: A corporate assessee's case was transferred and assessed pursuant to a section 127 order passed by an authority that did not itself have jurisdiction; the Department invoked the section 124(3) bar against the assessee's belated jurisdiction objection.
Held: Where a case is transferred by an authority who inherently lacks jurisdiction, the section 127 transfer order is void ab initio; once the foundation fails, all consequential proceedings - the draft assessment under section 144C(1), the DRP directions and the final assessment under section 143(3) read with section 144C(13) - are nullities in law. The section 124(3) bar on belated objections does not apply to an inherent lack of jurisdiction, which is not cured by waiver or participation (sublato fundamento cadit opus).
Principle: A void transfer/assignment cannot be saved by the section 124(3) time-bar; an inherent jurisdictional defect renders the whole assessment a nullity.
Relevance: A recent Tribunal application of the Raza Textiles / Y. Narayana Chetty line, distinguishing waivable allocation defects from non-waivable inherent defects.
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.