The ITAT has ruled that for corporate taxpayers, income tax assessment orders on returns below ₹20 lakh must be issued by the ITO, not the DCIT, relying on CBDT instructions.
ITAT Rules Only ITO Can Assess Companies with Returns Below ₹20L
The Income Tax Appellate Tribunal (ITAT) has held that assessment orders in cases of corporate assessees filing returns below ₹20 lakh in mofussil areas and ₹30 lakh in metros must be issued by the Income Tax Officer (ITO), not the Deputy Commissioner of Income Tax (DCIT), in accordance with a CBDT instruction dated 31st March 2014.
The tribunal observed that the delegation of powers under the CBDT’s scheme is strictly hierarchical and any assessment carried out by a non-jurisdictional authority—such as the DCIT stepping into a case within the ITO’s jurisdiction—renders the order without jurisdiction.
The jurisdictional hierarchy must be respected, and any deviation invalidates the assessment proceedings.
This decision provides clarity for practitioners on proper jurisdiction in corporate assessment matters, especially in lower-value returns. Tax professionals should scrutinize assignment orders before filing appeals or objections to ensure no jurisdictional defect taints the assessment. The CBDT instruction serves as a crucial procedural safeguard against administrative overreach.
Citations
- CBDT Instruction dated 31.03.2014
