The ITAT ruled that only the ITO, not the DCIT, can issue assessment orders for corporate returns below ₹20 lakh in mofussil areas, relying on CBDT instructions on jurisdictional competence.
ITAT: DCIT Lacks Authority to Assess Small Corporate Returns
The Income Tax Appellate Tribunal (ITAT) has held that the Deputy Commissioner of Income Tax (DCIT) lacks jurisdiction to pass assessment orders for corporate returns where total income is below ₹20 lakh in mofussil areas and ₹30 lakh in metropolitan cities. The ruling reaffirms the binding nature of CBDT administrative instructions on delegation of powers.
The issue arose when the DCIT passed an assessment order for a corporate assessee with total income below the prescribed threshold. The taxpayer challenged the order as ultra vires the delegation scheme under the Income Tax Rules. The ITAT relied on CBDT Circular No. F. No. 287/59/2018-IT (Inv.) dated 21 May 2018, which clearly demarcates jurisdiction based on income thresholds and geographical classification.
Any assessment order passed by an officer without valid delegation of powers is null and void in law.
This decision reinforces compliance with administrative protocols in assessment proceedings. Legal practitioners should verify the assessing officer’s jurisdiction before entertaining or appealing orders, particularly in cases involving minor corporate entities. Orders passed by higher-grade officers on petty returns may now face successful challenge on procedural grounds.
Citations
- CBDT Instruction F. No. 287/59/2018-IT (Inv.), 21 May 2018
