ITO Must Issue Assessment Orders for Corporates Below ₹20L

ITAT Clarifies Jurisdiction Over Low-Value Corporate Assessments

The Income Tax Appellate Tribunal (ITAT) ruled that assessment orders for corporate income tax returns below ₹20 lakh in mofussil areas must be issued by the Income Tax Officer (ITO), not the Deputy Commissioner of Income Tax (DCIT), relying on a CBDT circular clarifying jurisdictional limits.

The clarification arose in an appeal challenging an order issued by a DCIT in a mofussil zone where the returned income was ₹18 lakh. The tribunal held that delegation beyond stipulated monetary limits violates procedural fairness and authority norms.

"CBDT instructions are binding on all income tax authorities and must be followed scrupulously,"

the order stated, noting that such rules ensure equitable distribution of workload and prevent forum shopping.

This decision reinforces administrative hierarchy within the tax department and provides clarity for practitioners representing small corporate taxpayers. Assessments below ₹20 lakh (₹30 lakh in metro zones) should now be scrutinized for proper officer designation to avoid jurisdictional defects.