The Income Tax Appellate Tribunal has ruled that assessment orders for corporate returns below ₹20 lakh in mofussil areas must be issued by the Income Tax Officer (ITO), not the DCIT, per CBDT instructions.
ITAT Rules on Jurisdiction: ITO Must Issue Orders Below ₹20L
The Income Tax Appellate Tribunal (ITAT) has clarified that assessment orders in cases involving corporate assessees with total income below ₹20 lakhs in non-metro areas must be issued exclusively by the Jurisdictional Income Tax Officer (ITO), and not by the Deputy Commissioner of Income Tax (DCIT). The decision rests on a CBDT instruction clarifying functional jurisdictions under delegated powers.
The tribunal observed that delegated authority under CBDT instructions assigns assessments up to ₹20 lakhs (₹30 lakhs in metros) to ITOs, while DCITs may handle higher-value cases. In the matter under review, the DCIT issued the assessment order despite the income being below threshold, attracting jurisdictional challenge. The ITAT held that breach of delegated hierarchy renders the order irregular.
This decision serves as a critical reminder for practitioners to verify jurisdictional competence before challenging assessment validity. Although substantive errors may be corrected in appeal, procedural defects relating to competence can lead to quashing, especially when statutory instructions are flouted. The ruling reinforces administrative discipline in departmental assessments.
Citations
- CBDT Delegation of Powers Instructions
