Section 241 — Jurisdiction of Authorities | ITA 2025

Section 241 — - JURISDICTION OF INCOME-TAX AUTHORITIES

Section 241 is the substantive equivalent of 1961 s. 120 -- the foundational provision establishing the JURISDICTIONAL FRAMEWORK for income-tax authorities. The provision governs how cases are allocated to different authorities -- by GEOGRAPHIC AREA / SECTORAL CATEGORY / INCOME-LEVEL / SPECIFIC ASSESSEE TYPE. Critical for determining which AO has jurisdiction over a taxpayer; jurisdictional defects may render assessment void. The provision integrates with s. 245 (faceless jurisdiction) post-FA 2020, where dynamic-allocation algorithm replaces traditional geographic-AO mapping for scrutiny cases. Practitioner-grade rule: verify jurisdictional AO; PAN-jurisdictional-AO mapping critical; transfer applications under s. 243 if jurisdictional issues.

Statutory text — Income-tax Act, 2025

Marginal note -- Jurisdiction of income-tax authorities

(1) The income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or assigned to, such authorities under this Act, as per 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.

(2) Any income-tax authority, being an authority higher in rank, may, if so direct- ed by the Board, exercise the powers and perform the functions of an 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).

(3) 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.

(4) In issuing the directions or orders referred to in sub-sections (1), (2) and (3), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria:—

(a) territorial area;

(b) persons or classes of persons;

(c) incomes or classes of income; and

(d) cases or classes of cases.

(5) Without prejudice to sub-sections (1), (2) and (3), the Board may, by general or special order, subject to such conditions, restrictions or limitations as 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 specified income-tax authority to issue orders in writing that the powers and functions conferred on, or assigned to, the Assess- ing Officer 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.

(6) Where any order is made under sub-section (5)(b), references in any other pro- vision 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.

(7) The directions and orders referred to in sub-sections (1), (2) and (3) may, wherever considered necessary or appropriate for the proper management of 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––

(a) where such powers and functions are exercised and performed concur- rently 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

(b) references in any other provision of this Act or in any rule made there- under 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.

(8) Irrespective of anything contained in any direction or order issued under this section, or in section 242, the Board may, by notification, issue any direction for the purposes 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.

(9) The income-tax authority exercising and performing the powers and functions in relation to the person or class of persons referred to in sub-section (8) shall be such authority as specified in the notification issued under that sub-section. Jurisdiction of Assessing Officers.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 241	INCOME-TAX ACT, 1961 -- s. 120
Sub-s. (1) -- Authorities exercise powers per directions / orders	1961 s. 120(1)
Sub-s. (2) -- Distribution by area / classes of persons / income / cases	1961 s. 120(1)/(2)
Sub-s. (3) -- Concurrent jurisdiction	1961 s. 120(3)
Sub-s. (4) -- Specialised assessing officers (e.g., TPO / international tax / search)	1961 s. 120(4)
Faceless jurisdiction integration with s. 245	1961 s. 144B [FA 2020]

STATUTORY ARCHITECTURE

JURISDICTIONAL FRAMEWORK: (I) GEOGRAPHIC: traditional AO-area-based mapping; assessees with PAN registered in specific area get assigned to corresponding ward / range / circle. Useful for collection / enforcement / NRI-physical-presence cases. (II) CATEGORICAL: (a) Companies / firms: separate jurisdictional ranges (typically Range / CIT level); (b) Individual / HUF: salary / business / income-bracket-based; (c) Charitable trusts: dedicated CIT (Exemption) jurisdiction; (d) International tax / TP cases: dedicated international tax / TPO directorate; (e) Search-led cases: Investigation Directorate; (f) Large taxpayer units (LTU): centralised handling. (III) INCOME-BASED: AO levels by income bracket / business turnover; senior officers (Joint CIT / Addl CIT) handle larger cases. (IV) SPECIFIC TYPE: NPO / political party (CIT-Exemption); BFSI / pharma / IT (dedicated industry-cells). POST-FA 2020 SHIFT: scrutiny assessments under s. 270(6)/(7) are now FACELESS via NFAC; traditional jurisdictional-AO mapping replaced by DYNAMIC ALGORITHMIC ALLOCATION (s. 245 / 273 framework). Geographic-jurisdiction retained for: collection / recovery; search-and-seizure; surveys; rectification of orders; certain limited cases.

CONCURRENT JURISDICTION

Sub-s. (3) authorises CONCURRENT JURISDICTION -- single case may be subject to multiple authorities (e.g., AO + JCIT for routine; PCIT for revision; CIT(E) for trust matters). CBDT may direct any income-tax authority or authorities specified to exercise powers concurrently. Practitioner: identify the SPECIFIC authority for the SPECIFIC issue; e.g., scrutiny under NFAC; refund under CPC-Bangalore; rectification under jurisdictional AO; revision under PCIT/CIT.

CASE LAW

(i) ITO v. Lakhmani Mewal Das (SC, 1976) -- jurisdictional defect renders order void. (ii) Calcutta Discount Co. v. ITO (SC, 1961) -- AO must have territorial / subject-matter jurisdiction. (iii) PCIT v. Maruti Suzuki India (SC, 2019) -- jurisdiction over amalgamated company; predecessor PAN. (iv) Various HC writ-petition decisions on s. 120 / s. 124 jurisdictional challenges. (v) Post-FA 2020 NFAC challenges -- jurisdictional / natural-justice litigation.

PRACTITIONER NOTES

(i) PAN-JURISDICTIONAL AO MAPPING -- check via e-filing portal; verify before each compliance interaction. (ii) ASSESSEE-INITIATED TRANSFER -- s. 243 application possible for genuine grounds (e.g., business relocation). (iii) JURISDICTIONAL CHALLENGE -- if AO without jurisdiction, raise objection EARLY (typically before assessment); s. 124 / 1961 framework requires timely objection. (iv) NFAC vs JURISDICTIONAL AO -- post-2020: NFAC handles scrutiny; jurisdictional AO retains specific functions. (v) MULTI-PAN ENTITIES -- corporate group: each entity has own PAN-jurisdiction; group restructuring may shift. (vi) AMALGAMATION / DEMERGER -- predecessor's PAN-AO continues for historical assessments; successor AO for post-event.

CROSS-REFERENCES

Section 236 -- Income-tax authorities.
Section 242 -- Jurisdiction of Assessing Officers.
Section 243 -- Power to transfer cases.
Section 245 -- Faceless jurisdiction (FA 2020).
Section 273 -- Faceless Assessment Scheme.
CBDT Notification -- jurisdictional allocation.

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