Pecuniary jurisdiction: the section 143(2) notice from the wrong rank

A company filed a return declaring nothing. Eleven months later an Assistant Commissioner of Income Tax issued it a notice under section 143(2), and eighteen months after that an assessment order added Rs 1,88,28,600 to its income under section 50C. The Income Tax Appellate Tribunal has now held that the Assistant Commissioner should never have issued the notice, because a Board instruction of 2011 places a corporate case of that size with an Income Tax Officer, and that the whole assessment falls with it.

The decision is Byramjee Jeejeebhoy Pvt Ltd v. DCIT, Circle 3(1)(1), Mumbai, ITA No. 2874/MUM/2026, decided by the “B” Bench at Mumbai (Smt Beena Pillai, Judicial Member, and Smt Ratna Dasgupta, Accountant Member) and pronounced on 2 September 2026. It is a short order on a long-running question, and it ends with a sentence that most practitioners will read twice: that the decision “stems from the peculiar facts and circumstances of the instant case and should not be interpreted as being applicable to all cases where the jurisdictional notice is challenged.”

This article is about the question rather than the order. The question is whether an administrative instruction that distributes work between ranks of officer can make an assessment void when it is not followed, and if so, when. It is worth taking seriously because the answer is not settled, because the only High Court that has reasoned the point through decided it the other way, and because the record in this very case contains a further jurisdictional question that neither side argued, and a second oddity on the face of the assessment order that is worth knowing about even though it decides nothing.

Key points

• The notice under section 143(2) was issued by an Assistant Commissioner although the return declared Nil income, which CBDT Instruction No. 1/2011 places with the Income Tax Officer in a metro charge up to Rs 30 lakhs for a corporate assessee.
• The Tribunal held that the one month bar in section 124(3) is directed at territorial objections, that section 292BB deems service and not valid issue, and that the defect is incurable.
• The Allahabad High Court has held the opposite on the central point. The Calcutta High Court has declined to interfere with a Tribunal order on this exact fact pattern, though on the no substantial question of law route and in an appeal the assessee did not defend. The Delhi High Court has reversed a Tribunal that quashed an assessment on an untimely jurisdiction objection, though that was a territorial objection and not this one.
• Almost every decision in the assessee’s line is a case of an officer who was too junior. This case is the reverse, and the Revenue’s best argument lives in that difference.
• On the same record, Notification No. 65/2019 appears to have designated a different officer altogether as the prescribed authority for this notice, and the assessment order recites a machinery that section 143(3D) had disapplied eight days earlier. Neither point was argued; the first is a ground, the second is a mis-recital. The first also cuts the other way, and the article says how.
• The objection is worth most when it is taken within one month of service, in writing, with a request under section 124(4) that the question be referred. It can be taken later, as it was here, but then it depends on the territorial-only reading of section 124(3), which is the part of the argument a High Court has rejected.

The facts, and the dates that do the work

Byramjee Jeejeebhoy Pvt Ltd filed its return for assessment year 2018-19 on 31 October 2018, declaring a total income of Nil. Within that return it had disclosed a long term capital gain of Rs 5,25,000, being a sale consideration of Rs 17,50,000 less a cost of acquisition of Rs 12,25,000.

The Director of Income Tax (INCI), Mumbai passed on information that the company had sold immovable property for Rs 17,50,000 where the stamp duty value was Rs 2,26,85,600. The Assessing Officer applied section 50C, substituted the stamp duty value as the full value of consideration, computed the indexed cost of acquisition at Rs 33,32,000, arrived at a long term capital gain of Rs 1,93,53,600, and added the difference of Rs 1,88,28,600.

Before the Commissioner (Appeals) the company argued that the land was not vacant or buildable, that it was encumbered and carried unauthorised structures with slum occupants, that it had been sold on an “as is where is” basis subject to the claims and rights of those occupants, and that the fair market value of such a property was far below the stamp duty value. The National Faceless Appeal Centre dismissed the appeal on 16 January 2026, holding that none of this was supported by cogent or conclusive evidence on the record.

Four dates then decide everything that follows.

The return was filed on 31 October 2018. That is a return under section 139(1) for a company liable to audit, and it matters because section 124(3) has one clause for an assessee who has filed such a return and a different clause for one who has not.

The notice under section 143(2) is dated 28 September 2019. That date is inside the limit, though only just. The proviso to section 143(2) as it then stood allowed a notice within six months from the end of the financial year in which the return was furnished. The return was furnished in financial year 2018-19, so the outer date was 30 September 2019. The three month proviso that practitioners now work with came in only on 1 April 2021, when the Finance Act 2021 substituted “three” for “six”. Anyone testing a 2019 notice against the three month rule will reach the wrong answer.

The assessment order is dated 9 April 2021, and is expressed to be passed under section 143(3) read with sections 143(3A) and 143(3B). That recital is the subject of a later section of this article.

The additional grounds challenging jurisdiction were filed by letter dated 13 July 2026, more than five years after the assessment and four months after the appeal was filed. That is the ground on which the case was won, and the delay is the ground on which the Revenue will attack any similar case.

Two small things about the record that will otherwise confuse a reader checking the order. The appeal is titled against the Deputy Commissioner, Circle 3(1)(1), Mumbai, who held the charge when it was filed, while the notice of 28 September 2019 came from an Assistant Commissioner. And three additional grounds were taken on 13 July 2026, not one: that the notice was without jurisdiction for want of pecuniary competence; that it was void ab initio for not stating whether the case had been selected for complete scrutiny or for limited scrutiny; and, without prejudice, that if the selection was limited, the addition travelled beyond its scope. Only the first was decided. The other two have a section of their own below.

Admitting the ground: what NTPC actually permits

The ground was taken for the first time before the Tribunal, which makes admission the Revenue’s first and best line of defence. It is worth dealing with at the outset, because a ground that is not admitted never reaches the merits.

The authority is National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC), decided on 4 December 1996 by A.M. Ahmadi CJI, K. Ramaswamy and Sujata V. Manohar JJ. The Court reframed the question as whether the Tribunal has jurisdiction to examine a question of law arising from facts as found by the authorities below and having a bearing on the tax liability of the assessee. It held that section 254 is widely worded, that nothing in it restricts the Tribunal to grounds arising out of the Commissioner (Appeals)’ order, and that the purpose of an assessment is to determine the correct tax liability. It answered the question in the affirmative and remanded the matter to the Tribunal to decide the new grounds on their merits.

Two qualifications are in the judgment and are routinely left out.

The facts must already be on the record. Paragraph 5 contains the words “so long as the relevant facts are on record in respect of that item”, and paragraph 8 speaks of “a question of law which arises from the facts as found by the authorities below”. A ground that requires new evidence is not an NTPC ground.

Admission is a discretion of the Tribunal, not a right of the assessee. Paragraph 7 says it in terms: “Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised.” The Bombay High Court in Ultratech Cement Ltd. v. ACIT (2017) 408 ITR 500 (Bom) refused admission where the evidence was not on the record and no explanation was given for the delay.

For a pecuniary jurisdiction ground the practical consequence is specific. Three facts must be visible on the existing record before the ground can be called purely legal: the returned income, the designation of the officer who issued the notice, and the station. The first is on the return and in the assessment order. The second is on the notice. The third is in the cause title. Where all three are there, the ground is as clean an NTPC ground as exists. Where the designation of the issuing officer is not on the record, because the notice itself was never filed, the ground requires evidence and the Tribunal is entitled to refuse it. File the notice.

It is also worth noticing what the order under discussion does not record. Nothing in it explains why the ground was not taken in 2019, or in 2021, or before the Commissioner (Appeals) in 2026. On a record that contains no explanation at all, Ultratech is the authority a Departmental Representative should be running, and the answer available to the assessee is only that a pure question of jurisdiction needs no explanation because it goes to the root. Expect that exchange, and put an explanation on the record anyway.

Before the Commissioner (Appeals) the corresponding power is in section 250(5), which allows the Commissioner to allow an appellant to go into any ground not specified in the grounds of appeal if satisfied that the omission was not wilful or unreasonable. The two provisions are not the same and the tests are not the same, and a ground of this kind is better taken there, where an appeal is still pending, than saved for the Tribunal.

Where the monetary limits come from, and what the instruction does not say

The instrument at the centre of the case is CBDT Instruction No. 1/2011, F. No. 187/12/2010-IT(A-I), dated 31 January 2011. It fixes the declared income at which a case passes from an Income Tax Officer to an Assistant or Deputy Commissioner:

Income declared	Mofussil: ITOs	Mofussil: ACs and DCs	Metro: ITOs	Metro: DCs and ACs
Corporate returns	Upto Rs 20 lacs	Above Rs 20 lacs	Upto Rs 30 lacs	Above Rs 30 lacs
Non-corporate returns	Upto Rs 15 lacs	Above Rs 15 lacs	Upto Rs 20 lacs	Above Rs 20 lacs

The instruction defines the second column pair in its own words: “Metro charges for the purpose of above instructions shall be Ahmedabad, Bangalore, Chennai, Delhi, Kolkata, Hyderabad, Mumbai and Pune.” Eight charges. It closes with the words “The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011.” The limits it replaced dated from 2001, and the recital records that representations had come “from a large number of taxpayers, especially from mofussil areas” whose cases were being pushed to officers at other stations.

So on these facts: a corporate assessee, a metro charge, and a declared income of Nil. The case belonged to an Income Tax Officer. An Assistant Commissioner issued the notice.

One question has to be faced before the table can be applied at all, and nobody in this case faced it. The table is headed “Income declared”. This return declared Nil. Is a Nil return a declared income of less than Rs 30 lakhs, or is it no declared income at all? The assessee’s reading is the ordinary one: Nil is a figure, it is below the threshold, and a rule that allocates by amount allocates a return of nothing to the officer who takes the smallest amounts. The Revenue’s reading has the better of the Board’s own later conduct: when the Principal Chief Commissioner revised the Delhi limits in 2026 he applied them to “Income/Loss”, and a drafter who thought “Income declared” already covered a Nil or loss return would not have needed the change. There is a second limb to the Revenue’s point. The case was taken up because the Director (INCI) reported a transaction of Rs 2,26,85,600. An instruction whose stated purpose is the distribution of workload is naturally read against the size of the case, not against the figure on a return the Department had already been told was incomplete. Neither reading was argued and the Tribunal proceeded on the first without examining it. On a Nil or loss file, expect the point.

Three further things about the instruction deserve more attention than they usually get.

It could not be found on the Department’s own website. The advanced search at incometaxindia.gov.in does not index Board Instructions of this vintage, and several differently phrased searches returned nothing at all. The text set out above is taken from published reproductions that agree with one another word for word, and from the quotation of the instruction in the ITAT Raipur order in Arun Agrawal v. ACIT-3(1) (ITA No. 320/RPR/2023, 8 February 2024), with one qualification: that order’s reproduction of the mofussil corporate cell differs from every other reproduction and is the misprint discussed below. The table followed here is the one reproduced in the order under discussion. That sourcing is good enough to work from and not good enough to be smug about, and this page says so rather than presenting a secondary text as a primary one. If the instruction is to carry an argument in a Tribunal, the better course is to annex a copy from a reporter and invite the Departmental Representative to produce the Board’s own.

It recites no enabling provision. The heading under which reporters print it refers to section 119, which is the Board’s power to issue instructions to subordinate authorities, but that heading is the reporter’s classification and not part of the instrument. The instruction itself names no section. It speaks of “the Board” and issues the limits directly. The consequence for an argument is practical: it is safe to describe the instruction as classified under section 119, and it is not safe to describe it as issued under section 120, which is where the power to confer jurisdiction lives. Several Tribunal orders reason from the premise that the instruction has some overriding quality because of its source. In Kshitiz Sachdeva the Delhi Bench said that the Instruction was issued under section 119 and that the “same vest jurisdiction over and above the other subject of jurisdiction, and prevail on them.” That premise is doing work it cannot bear, as the next section explains, and the better argument does not need it.

There is a version of the mofussil corporate figure in circulation that is wrong. A line of ITAT Raipur orders prints the mofussil corporate threshold for ACs and DCs as “Above Rs. 30 lacs” rather than Rs 20 lacs, which is internally incoherent because it would leave corporate returns between Rs 20 lakhs and Rs 30 lakhs in a mofussil station assigned to nobody. The order in the present case reproduces the table correctly. Anyone lifting the table from a judgment rather than from the instruction should check that cell.

Instruction 6/2011, the five lakh flexibility, and a clarification nobody can produce

Instruction No. 1/2011 is not the whole of the Board’s position, and an argument built on it alone is incomplete in two ways.

Instruction No. 6/2011, F. No. 187/12/2010-ITA-I, dated 8 April 2011, modifies it. Some Chief Commissioners had reported that applying the 1/2011 limits strictly would distribute work unevenly between Assistant Commissioners and Income Tax Officers in their charges. The Board therefore provided that where the limits lead to “a substantially uneven distribution of workload”, the Chief Commissioner or Director General “may adjust the above limits by an amount of upto Rs. 5 lakhs”, and does so “after recording reasons in this regard”. The same instruction supplies the mirror definition of mofussil as all stations other than the eight metro cities.

That is a real answer available to the Revenue, and it is not one the Tribunals have had to confront, because the gap in most of these cases is far wider than Rs 5 lakhs. It was not open here either: the distance between Nil and Rs 30 lakhs cannot be bridged by a Rs 5 lakh adjustment. But on a file where the returned income sits within Rs 5 lakhs of the threshold, the first question is whether the Chief Commissioner made such an adjustment, and the second is whether reasons were recorded, because the power is conditional on them. A practitioner running the point near the margin should ask for both in writing.

The second gap is less comfortable. A letter of the Board dated 5 September 2012 records that the criteria for jurisdiction rest on Instruction No. 1/2011 “read with” Instruction No. 6/2011 “and a subsequent clarification dated 8.12.2011”. The text and number of that clarification of 8 December 2011 could not be traced for this article, on the Department’s site or elsewhere. It may say nothing that matters. It may alter a figure. What can be said honestly is that the Board itself treats the position as resting on three documents and only two of them could be obtained, and that any submission asserting the limits in Instruction 1/2011 as the complete position is making an assumption. If the Departmental Representative produces the December 2011 clarification in answer to the ground, that will be the first time most of us have seen it.

There is a third development, and it points forward rather than back. By an office order dated 15 May 2026 the Principal Chief Commissioner of Income Tax (CCA), Delhi revised the limits for jurisdictional Assessing Officer charges in the Delhi Region from financial year 2026-27: corporate returns to the ITO up to Rs 70 lakhs, non-corporate returns other than salary up to Rs 40 lakhs, and salary returns up to Rs 30 lakhs. The order acts on directions of the Chairman of the Board recorded at a video conference of 9 September 2025 and circulated by a Board letter of 13 May 2026. Two features are worth noting. It applies its thresholds to “Income/Loss”, which closes a question that the words “Income Declared” in the 2011 table had left open and which, as shown above, is live on a Nil return. And it does not expressly supersede or rescind Instruction 1/2011 or 6/2011.

Whether any region other than Delhi has issued a parallel order could not be established for this article, and the 2026 office order itself could not be obtained; the account above rests on secondary reproductions. For an Ahmedabad or Mumbai file the practical consequence is that the 2011 figures should not be assumed to be current for a year from 2026-27 onwards without asking, and the 2026 Delhi figures should not be assumed to apply outside Delhi.

Section 120, and the document that actually vests a case

The argument has to start with the statute, because an instruction cannot create jurisdiction that the Act does not contemplate.

Section 120(1) provides that income-tax authorities “shall exercise all or any of the powers and perform all or any of the functions conferred on, or, as the case may be, assigned to such authorities by or under this Act in accordance with 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.” Sub-section (2) allows those directions to authorise another income-tax authority to issue orders in writing for subordinate authorities, which is how a Chief Commissioner’s jurisdiction order comes to exist. Sub-section (3) then provides:

In issuing the directions or orders referred to in sub-sections (1) and (2), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria, namely :— (a) territorial area; (b) persons or classes of persons; (c) incomes or classes of income; and (d) cases or classes of cases.

It is tempting to say that because no monetary criterion appears in that list, a monetary allocation is outside section 120. Two things have to be said before any weight is put on that.

First, the sub-section is permissive. The Board “may have regard to any one or more of the following criteria”. It does not say the Board may have regard to nothing else, and it is not expressed as a limit on the power in sub-sections (1) and (2). An argument that a monetary allocation is outside section 120 because amount is not named in sub-section (3) has to meet that word “may” first, and it is not obvious that it can.

Second, an allocation by amount has more than one hook, and in practice it is not clause (c). Clause (c), “incomes or classes of income”, is the natural candidate in theory. But the published jurisdiction orders issued under sub-sections (1) and (2) of section 120 by the Principal Chief Commissioners set the monetary limits in the column headed “Cases or class of cases”, in the form “cases having returned income or loss of Rs 20 lakhs and above”, and in some charges under “Persons or classes of persons”. The Chief Commissioner’s order of 19 February 2018 quoted by the Allahabad High Court in Shivaaditiya is such an order. This was checked against the published jurisdiction orders for one region’s charges rather than for every region, and a practitioner should look at the order for his own charge rather than assume the drafting is uniform.

So the honest position is not that the Act contains no monetary criterion. It is that the Act allows a monetary allocation to be made by order under section 120, that it is routinely so made, and that the question in a case like this one is whether the officer who acted was outside the order that in fact governed his charge, rather than whether the Board’s 2011 Instruction has statutory force at all. That reframing matters practically more than it matters theoretically, because it directs the practitioner at the document that decides the case. Instruction 1/2011 is not the instrument that vests a case in an officer. The jurisdiction order for the charge is.

Three further limbs of section 120 bear on this fact pattern and none of them was mentioned in the order or in the submissions.

The Explanation to sub-section (1) declares that an income-tax authority higher in rank may, if so directed by the Board, exercise the powers and perform the functions of an authority lower in rank, and that any such direction is deemed to be a direction under sub-section (1). This case is a higher authority exercising a lower authority’s functions, which is the Explanation’s exact subject. The Revenue’s use of it is obvious: Parliament has expressly provided for a senior officer doing a junior officer’s work, which is hard to reconcile with the proposition that a senior officer who does so acts without jurisdiction at all. The assessee’s answer is that the Explanation is conditional, and the condition is a direction of the Board. The permission is not at large; it is a route, and on this record nobody suggested the route had been used. If the Department wishes to rely on it, the direction is a document and it can be produced. So far as could be traced for this article, no decision in this line has considered the Explanation.

Sub-section (5) permits two or more Assessing Officers, whether or not of the same class, to exercise and perform powers and functions concurrently. That is the Revenue’s cleanest answer on a record where a concurrent order exists, because an officer who holds the case concurrently holds it however the instruction distributes the work, and it is the answer the Delhi High Court accepted in Abhishek Jain. It is also the answer that was not given here, because no concurrent order was produced.

Sub-section (6) lets the Board by notification specify the authority before whom returns are to be furnished or other acts done, notwithstanding any direction or order under the section or anything in section 124. It is the provision under which the Board has repeatedly reorganised who does what in the faceless era, and it is worth knowing about because it shows that where the Board intends to displace the ordinary allocation it has an express power to do so and uses it.

Section 124(1) is about area; section 124(5) is about powers

Section 124 is the provision the Revenue leans on, and it is routinely misquoted.

Sub-section (1) is expressly territorial. Where an Assessing Officer “has been vested with jurisdiction over any area”, then “within the limits of such area” he has jurisdiction over a person carrying on business at a place within the area, or at his principal place of business where there is more than one, and over any other person residing within the area. The word “area” appears five times in that single sub-section. Nothing in it says anything about how much income the person has.

Sub-section (5) is a different provision doing a different job:

Notwithstanding anything contained in this section or in any direction or order issued under section 120, every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of the income accruing or arising or received within the area, if any, over which he has been vested with jurisdiction by virtue of the directions or orders issued under sub-section (1) or sub-section (2) of section 120.

This is the Revenue’s best textual point and it should be stated at its strongest. An officer who has been vested with jurisdiction over an area has, by force of a non obstante clause that overrides any direction or order under section 120, all the powers of an Assessing Officer in respect of income arising in that area. If the Assistant Commissioner in this case was vested with jurisdiction over the area in which the company carried on business, sub-section (5) appears to give him every power an Assessing Officer has, including the power to issue a notice under section 143(2), whatever an administrative instruction may say about who should have taken the file.

The assessee’s answer is that sub-section (5) is about powers and not about allocation. It ensures that an officer who does hold a case is not short of any statutory power in relation to it. It does not answer the anterior question whether this officer held this case. Read as the Revenue reads it, sub-section (5) would make the whole of section 120 and the whole of section 127 decorative, because every Assessing Officer in a station would have every power over every assessee in it, and a transfer order would never be needed.

Both readings are available on the words, and this is the core of the dispute. What is not available is the conflation that keeps appearing in Departmental submissions, in which the “all the powers” language is attributed to sub-section (1). The Allahabad High Court’s reasoning in Shivaaditiya moves between the two sub-sections, and orders summarising it, including the order under discussion, record the Revenue as contending that an officer vested with territorial jurisdiction under section 124(1) is clothed with all the powers conferred on an Assessing Officer. Section 124(1) says no such thing. Section 124(5) does. The distinction matters because sub-section (5) is tied to income “accruing or arising or received within the area”, which is a territorial limitation of its own and not a general warrant.

Section 124(3): one month, not thirty days, and which clause applies

Section 124(3) is the Revenue’s procedural answer, and on a file where the point was not taken early it is usually a better answer than anything on the merits.

No person shall be entitled to call in question the jurisdiction of an Assessing Officer— (a) where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier; (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier.

The present section 124 is the product of the Direct Tax Laws (Amendment) Act 1987, which came into force on 1 April 1988. On the Board’s own account in Circular No. 549 dated 31 October 1989, the earlier sub-sections (3) to (7) were reproduced, with amendments, as sub-sections (1) to (5) of the new section. Anything said about “section 124(3)” in a judgment on a pre-1988 assessment is being said about a differently numbered provision.

Four points of detail on the present text, each of which decides files.

The statute says one month, not thirty days. The difference is small and it is not nothing, and more importantly the “thirty days” formulation is a sign that the speaker is working from a paraphrase rather than from the section. The Supreme Court’s short order in Kalinga Institute itself says thirty days. The Bombay High Court in Bansilal B. Raisoni and Sons v. ACIT says one month, which is what the provision says.

The clause turns on whether a section 139(1) return was filed, not on the provision under which the proceeding was taken. This is the commonest error in this area and it is worth being blunt about. Clause (b) opens “where he has made no such return”. An assessee who filed a return under section 139(1) and is later reassessed under section 148 therefore falls in clause (a), not clause (b), and the trigger remains service of a notice under section 142(1) or section 143(2), or completion of the assessment, whichever is earlier. That is how the Delhi High Court applied the provision to a section 148 reassessment in Shyam Sunder Infrastructure. Clause (b) governs only where no section 139(1) return was made, and there the cut-off is the expiry of the time allowed by the section 148 notice for making the return. There is a point in the assessee’s favour hidden in that: where a section 139(1) return was filed and no notice under section 142(1) or section 143(2) ever issues in the reassessment, clause (a) has no trigger at all, and the bar never starts to run.

Clause (a) is expressed to apply to a return under section 139(1). A return filed under section 139(4) or section 139(5) is not literally within it, and a belated filer has not made “no such return” either, so on the words there may be no bar against him at all. The Revenue’s answer is that a return under section 139(4) is a return made under section 139 for these purposes and that the clause should be read purposively, since Parliament cannot have meant to give a belated filer an open-ended right the punctual filer lacks. The point does not appear to have been decided, and a belated filer running a jurisdiction ground late should take it.

Clause (c) is out of date. It was inserted by the Finance Act 2016 with effect from 1 June 2016 and still names only section 153A(1) and section 153C(2). It was never updated for the search assessments routed through section 148 from 1 April 2021, nor for the revival of block assessment under Chapter XIV-B from 1 September 2024. For a search after 31 March 2021 assessed under sections 147 and 148, clause (c) does not reach the case on its words, and which of clauses (a) and (b) governs then turns on whether a return under section 139(1) was filed. Our pages on section 148 and block assessment deal with which regime applies to which search.

There is a fifth provision that practitioners almost never use, and it is the one that would win these cases cleanly. Section 124(4) provides that, subject to sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, the Officer “shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made.” That is a statutory duty, it is triggered by the assessee’s objection, and it must be discharged before the assessment. The opening words matter: the duty arises only on a timely objection, so where the objection is out of time no duty arises and there is no ground. The Punjab and Haryana High Court made that point in Subhash Chander v. CIT [2008] 166 Taxman 307. An objection on the record within one month, met by no reference, produces a far better record than an additional ground five years later.

Section 127, and the transfer order that was never produced

Paragraph 10 of the order records that “Revenue has not brought on record that in this case any order u/s 127 of the Act was passed for transferring the case to the ITO.”

Read literally against these facts that sentence is back to front, because the officer who acted was the Assistant Commissioner and the case was the Income Tax Officer’s; what would have had to be produced is an order transferring the case to the Assistant Commissioner. The same paragraph refers to “the impugned ITO” where it means the impugned Assistant Commissioner. These look like drafting slips and they do not affect the result, but anybody quoting paragraph 10 should quote it accurately and should not build an argument on its literal terms.

The substance of the point is sound and it is the most practically useful part of the order. Section 127 is the Act’s own machinery for moving a case from one Assessing Officer to another: the named senior authority may transfer “after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so”, with no opportunity needed under sub-section (3) where the offices are in the same city, locality or place, and with sub-section (4) providing that a transfer may be made at any stage and does not require the re-issue of any notice already issued.

The significance for the jurisdiction ground is this. If the Department says that the Assistant Commissioner properly held the file notwithstanding the monetary limits, it must be able to say why. The available answers are a jurisdiction order under section 120(2) that on its own terms gave this officer this class of case, a transfer under section 127, a concurrent jurisdiction order under section 120(5), a direction of the Board under the Explanation to section 120(1), or an adjustment of the limits under Instruction 6/2011 with reasons recorded. All five are documents. None is a matter of impression. So the single most productive step on a live file is a written request for whichever of them the officer relies on, early, and a note on the record of the answer or the silence.

A caution in the other direction. Section 127(4) says that a transfer does not require the re-issue of a notice already issued. Where a case was transferred after a valid notice, the notice stands, and an argument built on the identity of the officer who later framed the assessment rather than the one who issued the notice runs into that sub-section.

Is the territorial and pecuniary distinction sound?

The reasoning that carries every decision in the assessee’s line is that section 124(3) bars territorial objections only. It is worth testing, because it is the hinge and because it is stated in these orders far more often than it is argued.

The case for it. Section 124 is headed “Jurisdiction of Assessing Officers” and its operative sub-section vests jurisdiction “over any area”. Sub-section (3) sits inside that section and takes its colour from it. Sub-section (5) is also expressed by reference to income arising “within the area”. The Bombay High Court in Peter Vaz v. CIT (2021) 436 ITR 616 (Bom) said at paragraph 44 that while “Sections 120 to 124 of the IT Act no doubt refer to the jurisdiction of the Income Tax Authorities”, “from the scheme of these provisions, it is apparent that reference is to the territorial jurisdiction of the authorities”, and that section 124(3) “refers to mainly the territorial jurisdiction of the Assessing Officer”. The same court in Bansilal B. Raisoni observed that the time limit “would not apply to a case where the assessee contends that the action of the Assessing Officer is without authority of law and, therefore, wholly without jurisdiction”. The ITAT Raipur in Aananda Devcon (P.) Ltd. v. ACIT put it most directly: the one month bar “would get triggered only in a case where the dispute of the assessee is with respect to the territorial jurisdiction”, and an objection founded on Instruction 1/2011 is “by no means an objection to his territorial jurisdiction.”

The case against it. Sub-section (3) does not say “territorial”. It says “the jurisdiction of an Assessing Officer”, without qualification, and a court that reads a limitation into unqualified statutory words needs a reason. The reason offered is the context of sub-section (1), but sub-section (3) is not expressed to be subject to sub-section (1) and is capable of standing on its own. More awkwardly, the reading proves too much: if the bar reaches only territorial objections, then every non-territorial objection, including one about rank, can be taken at any time up to the Tribunal, which is exactly what makes the Revenue say that assessments would be perpetually open. The Karnataka High Court in Adarsh Developers v. DIT [2024] 158 taxmann.com 81 refused to allow a challenge after participation for that very reason, that an open-ended right would leave proceedings perpetually inconclusive.

There is also a difficulty with the pedigree of the territorial reading that ought to be acknowledged rather than glossed. Peter Vaz said what it said while holding that section 124(3) cannot bar a challenge to the preconditions of section 153C, which is a challenge to a statutory precondition and not to the identity of the officer. Bansilal B. Raisoni said what it said about a claim that no search had been initiated against the firm at all, which is again the absence of a statutory precondition, and the observation has to be weighed with the disposal: the Court did not quash the section 153A notices, declined to decide whether a search had in substance been initiated, declined to thwart the assessment, and relegated the petitioner to the Assessing Officer with all contentions kept open. In both cases the thing said to be outside section 124(3) was something the Act itself requires before the power exists. Whether a breach of an administrative monetary limit belongs in that category is the very question, and neither judgment answers it. Citing them as though they did is the commonest overreach in this area.

And there is a sting in Peter Vaz for the assessee. The passage about territorial jurisdiction cuts in two directions. It supports reading the section 124(3) bar narrowly. It equally supports the Revenue’s submission that the whole statutory scheme of jurisdiction is about area, from which it follows that an allocation by amount is not part of that scheme at all, and that an officer who holds the area holds the case. A practitioner who quotes paragraph 44 should be ready for it to be quoted back.

Direction of travel: the senior officer and the small case

This is the most important thing to understand about the present decision, it governs how every authority discussed below may be used, and the order itself does not address it.

Of the Tribunal decisions the order relies on, most are cases in which the officer who acted was too junior. In YKM Holdings the return was Rs 37,78,510 and the notice came from an Income Tax Officer. In Vipul Mittal the return was Rs 59,68,220 and the notice came from an Income Tax Officer. In Mahavir Pukhraj Jain the return was Rs 29,57,760 and the section 148 notice came from an Income Tax Officer. In Khadamat Integrated Solutions the declared income was Rs 16,38,56,590 and the section 143(2) notice came from an Income Tax Officer. In Aananda Devcon the income was Rs 21,44,050 and the notice came from an Income Tax Officer. In Monarch and Qureshi Builders the declared income was around Rs 68 lakhs against a Rs 30 lakh corporate metro limit. Shivaaditiya, the High Court authority the other way, is also an officer who was too junior.

The present case is the reverse. A return of Nil, and an Assistant Commissioner.

That difference gives the Revenue its best argument, and it is a good one. The rationale the Allahabad High Court accepted is that the limits exist “for equitable distribution of works”. Where an Income Tax Officer takes a case of Rs 16 crore, an assessee can at least say that the Board intended a case of that size to receive the attention of a more senior officer and that something of substance has been lost. Where an Assistant Commissioner takes a case of Nil income, nothing of that kind can be said. The senior officer has every power the junior officer has and more. There is no want of competence and no conceivable prejudice. And the Act itself, in the Explanation to section 120(1), contemplates a higher authority performing a lower authority’s functions. On any test of substance rather than form, the Revenue says, this is as pure an instance of an internal housekeeping rule as could be devised.

The assessee’s answer has to be structural rather than practical, and there is a decent one. An allocation that binds only in one direction is not an allocation. If the Board has distributed work by income, an officer is vested with the cases on his side of the line and not with those on the other side, and it makes no sense to say that the line is jurisdictional going up and merely administrative coming down. On that view the question is never whether this assessee was prejudiced, but whether this officer had the case; and the answer to that does not change with the direction of the breach. The Explanation to section 120(1) is conditional on a direction of the Board, and no such direction was produced. There is also a practical point that is not nothing: a senior officer who takes small cases is a senior officer not doing the work the Board assigned him, and the taxpayer whose large case is thereby handled by someone junior has the complaint the other way round.

Several Tribunal decisions are on the present fact pattern and are worth more to a practitioner than any number of the officer-too-junior cases. In Krishnendu Chowdhury v. ITO (ITA No. 1153/Kol/2015, pronounced 18 November 2016) a return of Rs 12,65,830 attracted a section 143(2) notice from the Assistant Commissioner, Circle Haldia, and the Kolkata Bench held that “the notice issued by the ACIT is invalid and consequently the assessment framed by the ITO becomes void”. In Bhagyalaxmi Conclave Pvt Ltd v. DCIT (ITA Nos. 2517 to 2520/Kol/2019, 3 February 2021) the incomes were in the tens of thousands and the notices came from a Deputy Commissioner. In Pakshal Impex Pvt. Ltd. v. ITO (ITA Nos. 3428 to 3430/Mum/2026, 23 July 2026) a return of Rs 10,57,090 attracted a section 148 notice from a Deputy Commissioner. To those can be added Ketan Tokershi Shah v. DCIT (ITA No. 1107/Mum/2023, 26 July 2023), Kshitiz Sachdeva (Prop. Alert International) v. ITO (ITA No. 6133/Del/2025, 8 April 2026), Ram Kumar Gupta v. DCIT (ITA No. 7659/Del/2025, 8 July 2026) and Suraj Durobuild (P) Ltd v. ACIT (ITA No. 777/Del/2024, 22 August 2025), the last of which could not be read in full for this article and whose reasoning on the monetary limit is therefore not relied on here.

Two cautions on that list. Ketan Tokershi Shah was an assessment by a Deputy Commissioner of a Central Circle, and Ram Kumar Gupta arises out of a search of 2 February 2022 with a Central Circle cause title and no discussion of the section 127 position. Where a case has been transferred to a central charge it is held under the transfer order and not under the monetary limits, and the Revenue will say so. Krishnendu Chowdhury, Bhagyalaxmi Conclave and Pakshal Impex are the cleaner authorities on the present pattern. Lead with those, and use the officer-too-junior cases for the section 124(3) proposition if they are needed for it, saying that that is what they are being used for.

A High Court has now also declined to interfere on these facts, though less emphatically than it is sometimes reported. In Principal Commissioner of Income Tax-9, Kolkata v. Mintu Das, ITAT/167/2025, judgment dated 14 January 2026 (Rajarshi Bharadwaj and Uday Kumar JJ.), a return of Rs 16,50,920 belonged to the Income Tax Officer, Ward-28(2), while the section 143(2) notice and the assessment under section 143(3) were both made by the Assistant Commissioner, Circle-28. The Calcutta High Court dismissed the Revenue’s appeal, concluding that “the jurisdictional issue has rightly been determined by the learned Tribunal and no substantial questions of law arises in this appeal”. That is an affirmance on the no substantial question of law route rather than an independent High Court ruling on the merits, nobody appeared for the assessee, and no law report citation for it could be traced for this article. It is useful and it is not Shivaaditiya’s equal.

Shivaaditiya Jems and Abhishek Jain: the High Courts the assessee has to get past

Shivaaditiya Jems and Jewellery (P.) Ltd. v. Income Tax Officer, Writ Tax No. 1047 of 2021, decided on 14 July 2022 by a Division Bench of the Allahabad High Court (Surya Prakash Kesarwani and Jayant Banerji JJ.), reported at [2022] 143 taxmann.com 64, is the single most dangerous authority against this line of argument, and it is a High Court.

The facts were the mirror image of the present case. For assessment year 2017-18 the petitioner, a company, had filed a return on 11 October 2017 declaring Rs 32,57,900. The regular assessment under section 143(3) had been made by the Assistant Commissioner. A notice under section 148 dated 31 March 2021 was then issued by the Income Tax Officer, Ward 2(1), that is, by an officer junior to the one the limits pointed to. The petitioner said only the Assistant Commissioner could have reopened.

The Court recorded that the Board had issued Instructions 1/2011 and 6/2011 “for equitable distribution of works”, quoted the Chief Commissioner’s order of 19 February 2018 fixing the limits, held that jurisdiction under section 124(1) is territorial, relied on section 124(5) for the proposition that “every Assessing Officer shall have all the powers conferred by or under this Act”, observed that the petitioner had admitted the Officer’s territorial jurisdiction so that no occasion for a reference under section 124(2) arose, and concluded that “merely because some pecuniary limit has been fixed for purpose of distribution of work between officers” there is no inherent lack of jurisdiction. The writ was dismissed.

It is built on Abhishek Jain v. ITO (2018) 405 ITR 1 (Delhi), which deserves a paragraph of its own because it is independently against the assessee and is the foundation of the line. There the Delhi High Court held that an objection to the Assessing Officer’s jurisdiction “could not be equated with lack of subject-matter jurisdiction”, because what is in issue is the place of assessment; that an officer with concurrent jurisdiction “would not per se lack jurisdiction”; and that delay and laches in responding to the notices had lost the assessee the right to question jurisdiction. Its weaknesses are that it was decided as a delay and laches case about the place of assessment, and that concurrency was assumed rather than demonstrated. But the concurrency point is the Revenue’s real answer in any charge where a concurrent order exists, and the article’s earlier discussion of section 120(5) is where it bites.

The order under discussion deals with Shivaaditiya in a single sentence, saying that it was distinguished by the Delhi Bench in Kshitiz Sachdeva and by Vipul Mittal. That is thin, and the distinction the Delhi Bench actually drew does not survive contact with the Allahabad judgment. Kshitiz Sachdeva reasons that the Departmental authorities were cases where the issue was the effect of jurisdiction subsequent to a search, where jurisdiction had been assumed under section 148 by an officer with territorial jurisdiction, and that the question there “is not of dispute with regard to concurrent jurisdiction but with regard to pecuniary jurisdiction”. But the pecuniary objection was the only point argued in Shivaaditiya, and the Allahabad High Court met it head on. Saying that the case was about territorial or concurrent jurisdiction rather than pecuniary jurisdiction is simply not an accurate description of it.

If the point is to be distinguished it has to be distinguished on better ground, and two are available.

The first is the provision under which the notice issued. Shivaaditiya concerned the initiation of a reassessment under section 148 by an officer who had territorial jurisdiction. The present case concerns a notice under section 143(2), which is the statutory precondition of an assessment under section 143(3). Those are not the same thing: the reopening notice is what confers the power, whereas the scrutiny notice is a step the Act requires before an existing power is exercised. Whether that cuts for or against the assessee is itself arguable, because a reopening notice is on the usual view more jurisdictional and not less.

The second is direction of travel, dealt with above.

Neither is a knockout. The honest way to present Shivaaditiya to a Bench is as a High Court decision squarely against the proposition, distinguishable on the provision and on the facts but not answered, and to say that the Tribunals that have gone the other way have not grappled with it. The Allahabad judgment has its own weaknesses, and they are worth having ready: the petitioner was a corporate assessee but the Chief Commissioner’s order the Court quoted deals with non-corporate limits; the Court noted that a corporate jurisdictional chart had been referred to but did not analyse it; and it is a writ dismissal at the notice stage where an alternative remedy was available, not a decision on the validity of a completed assessment. It also considered no authority the other way.

Two further authorities will be put against an assessee and are not cited here because they could not be closed. Ambience Farms (P.) Ltd. is a Bombay matter in which an SLP is said to have been dismissed, cited against assessees and distinguished on facts in Khadamat and Pakshal Impex; the judgment and a citation for it could not be located for this article. Harish Kumar Chhabada v. PCIT is a Chhattisgarh decision said to have applied the section 124(3)(a) bar to a delayed challenge; its appeal number and date are behind a paywall and were not obtained. Both are flagged so that a practitioner is not met by them cold.

Kalinga Institute: what a five paragraph order can carry

The Revenue’s second authority in the present case was Kalinga Institute of Industrial Technology, and it is cited across the country as though it had settled section 124(3). It has not.

The correct particulars are Deputy Commissioner of Income Tax (Exemption) and Another v. Kalinga Institute of Industrial Technology, Petition for Special Leave to Appeal (C) No. 29304 of 2019, order dated 1 May 2023, S. Ravindra Bhat and Dipankar Datta JJ., reported at [2023] 454 ITR 582 and [2023] 151 taxmann.com 434. The order under discussion cites it as “151 taxmann.com 234”, which is a transposition. Below it was Kalinga Institute of Industrial Technology v. Union of India, W.P.(C) No. 898 of 2017, Orissa High Court, decided 6 March 2019, for assessment year 2014-15. On the assessee’s writ the High Court had held that a notice under section 143(2) issued by the Assistant Commissioner, Corporate Circle-1(2), Bhubaneswar was without jurisdiction, acting on an affidavit of the Joint Commissioner (OSD) (Exemption) that jurisdiction lay with the Commissioner (OSD) (Exemption). It quashed the notice, declined to touch the assessment order and demand because they were appealable, and gave liberty to the competent authority to issue a fresh notice.

The Supreme Court allowed the special leave petition. It recorded that jurisdiction had changed after the returns were filed, that the assessee had participated pursuant to a notice under section 142(1) without objecting, and that section 124(3)(a) precludes an assessee from questioning jurisdiction beyond the period there stated. It said the facts did not warrant the order passed by the High Court, and, noting the liberty the High Court had itself granted, directed that the Assessing Officer could complete the assessment within sixty days, the assessee not being permitted to raise limitation.

Three things follow, and they should be stated plainly whichever side one is on.

It is a short order on a special leave petition, five paragraphs long. There is no analysis of section 124(3), no construction of its words, no discussion of the distinction between territorial and pecuniary allocation, and no consideration of competing authority. The operative reasoning is that the facts did not warrant the order the High Court had passed. A sentence about section 124(3)(a) in such an order is an observation made in disposing of a case on its own facts, not a proposition of law laid down for others. The order under discussion was right to distinguish it, though it did so in fewer words than the point deserves.

It was not a monetary limits case at all. The change of jurisdiction there was between the Exemption charge and the Corporate charge, which is a question of which wing of the Department holds a trust’s file, not of which rank holds a case of a given size. Instruction 1/2011 is not mentioned in it.

And the order itself paraphrases the statute wrongly, saying thirty days where section 124(3)(a) says one month. That is another reason not to treat the sentence as a considered construction of the provision.

One correction to the way the present order describes the disposal. It says the Supreme Court “clarified that the AO is free to complete the assessment within the next 60 days”. In fact the special leave petition was allowed and the High Court’s decision modified. The sixty day direction was a consequence of that, not a clarification of it.

Hindustan Transport: a single judge in 1988, and the part that actually bites

The Revenue’s first authority was Hindustan Transport Co. v. Inspecting Assistant Commissioner of Income-tax (Assessment), Central Circle-I, Lucknow, reported at [1991] 189 ITR 326 and [1992] 63 Taxman 246.

The assessee’s answer in the present case was that the decision “was rendered prior to 2000 when the impugned CBDT Instruction had not even been issued”, and the Tribunal accepted it. The date point is correct, and it is stronger than the way it was put. The judgment is dated 29 July 1988. It predates Instruction 1/2011 by twenty-three years. It was also decided on facts and proceedings that preceded the recast of section 124 by the Direct Tax Laws (Amendment) Act 1987, which took effect on 1 April 1988, so the Court was construing the earlier numbering, in which what is now sub-section (3) was sub-section (5). Any submission that attributes the present language of section 124(3) to this judgment is wrong on its face.

Two further points about it are worth having.

It is a judgment of a single judge, S.C. Mathur J., sitting at the Lucknow Bench of the Allahabad High Court, on a writ petition under Article 226 which was dismissed with costs. It is occasionally cited as a Full Bench decision. It is not. The words “Full Bench” appear once in the judgment, at paragraph 27, describing a Full Bench of the Gauhati High Court in Sohani Devi Jain v. JTO, and that is almost certainly where the error began.

Its facts have nothing to do with monetary limits. An order under section 127 dated 31 December 1987 had transferred the case to E-Ward, Lucknow with effect from 20 January 1988, and the Inspecting Assistant Commissioner nonetheless completed the assessment on 30 March 1988. The Court did not decide when the transfer took effect. It held instead that the allocation of functions raises no jurisdictional defect at all: the Act does not itself fix each authority’s jurisdiction, so the authorities other than the Board are of co-ordinate jurisdiction, allocation of work among them is “a measure of administrative convenience”, “the concept of jurisdiction cannot be imported”, and “a defect arising from allocation of functions is a mere irregularity”. It rested that conclusion on Wallace Brothers and Pannalal Binjraj, both place of assessment cases under the 1922 Act, which is to say on territorial allocation.

So as an authority on pecuniary limits it is weak, and the Tribunal was entitled to put it aside. But the chronological answer the Tribunal gave is not the complete answer, and a Departmental Representative who has read the case will say so. The reasoning that allocation of functions among co-ordinate authorities is administrative rather than jurisdictional does not depend on the 2011 Instruction existing; it is a reading of the statutory scheme, and the scheme in sections 120 to 124 has not changed in the respects that reasoning relies on.

More awkwardly, Hindustan Transport contains a holding that bites directly on a case like this one and which went unmentioned. Following Sohani Devi Jain and Wallace Brothers, the Court held that a jurisdictional objection raised for the first time at the appellate stage is barred. Where the ground is first taken before the Tribunal five years after the assessment, that is the part of the judgment that matters, and it is not met by pointing out that the case is from 1988.

Section 292BB cures service; section 292B cures form

The Revenue’s statutory lifeline in these cases is section 292BB, and on the words it does not reach.

Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was— (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.

Every limb is about service. The section deems a notice served; it does not deem a notice issued, and it says nothing at all about who issued it. The Tribunal put it correctly: the section “applies to a valid notice which is not served on the assessee, or not served upon him in time, or served upon him in an improper manner”, and “it does not protect invalid issuance of notice on account of incorrect assumption of jurisdiction.”

The Supreme Court has said the same at a higher level of generality. In CIT v. Laxman Das Khandelwal (Civil Appeal Nos. 6261-6262 of 2019, decided 13 August 2019, Uday Umesh Lalit and Vineet Saran JJ.) it held that “the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. The Section is not intended to cure complete absence of notice itself.” That was said of a notice under section 143(2) that had never been issued, and the step from “never issued” to “issued by an officer who could not issue it” is a step the assessee has to make rather than one the Court has made.

The companion authority is ACIT v. Hotel Blue Moon (Civil Appeal No. 1198 of 2010 with Civil Appeal Nos. 1199 to 1203 of 2010, decided 2 February 2010, H.L. Dattu and S.H. Kapadia JJ.), which held that “Omission on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with.” Two cautions about it, both of which a Departmental Representative will take. The holding is framed for Chapter XIV-B: the Court concluded “even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Section 158 BC, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicable and no assessment could be made without issuing notice under Section 143(2)”. And the judgment does not mention section 292B at all, so it cannot be cited for the proposition that section 292B does not cure the omission. The bridge from block assessment to ordinary assessment is Laxman Das Khandelwal, which applied Blue Moon in a regular assessment without discussing the confinement. Laxman Das Khandelwal does not use the word “jurisdictional”, and a submission asserting that the Supreme Court has held section 143(2) to be a jurisdictional notice is asking the authorities for more than they give.

At Tribunal level the point on section 292BB is covered squarely by Bhagyalaxmi Conclave Pvt Ltd v. DCIT, where declared incomes of between Rs 13,240 and Rs 1,15,850 had attracted notices under section 143(2) from a Deputy Commissioner, and the Bench held both that the notices were bad and that section 292BB could not cure the defect. One caution about the order under discussion: it supports its conclusion on section 292BB by citing a decision it names “Balram Sharma” in one paragraph and “Balraj Sharma” in another, against the same TMI number. That decision could not be verified under either name for this article and is not relied on here. Bhagyalaxmi Conclave carries the same proposition and can be checked. And the proviso to section 292BB is a trap in the assessee’s favour that is often missed: the section does not apply at all where the objection was raised before the assessment was completed, which is one more reason to put the objection on the record early.

Section 292B is the Revenue’s other instrument and it fails for a different reason. It saves a return, assessment, notice, summons or other proceeding from being invalid “merely by reason of any mistake, defect or omission” in it, provided it is “in substance and effect in conformity with or according to the intent and purpose of this Act”. The words reach a defect in the document. They do not reach the absence of authority in the person who made it, because an absence of authority is not a mistake in the notice, it is a fact about the officer. That is the orthodox line and it is the right one on the words. It is not, however, a line that draws itself in every case, and where the Revenue can show that the officer did hold the file under some concurrent order, section 292B becomes a serious argument rather than a hopeless one.

Nullity or curable irregularity

The Tribunal held that the defect “is incurable”. That word is doing a great deal of work and it is contested.

The authority behind it is Ashok Devichand Jain v. Union of India, Writ Petition No. 3489 of 2019, Bombay High Court (K.R. Shriram and N.J. Jamadar JJ.), judgment dated 8 March 2022, reported at [2023] 452 ITR 43 and [2023] 151 taxmann.com 70. For assessment year 2012-13 the petitioner had returned about Rs 64,34,663, and a notice under section 148 dated 30 March 2019 was issued by an Income Tax Officer where Instruction 1/2011 placed a non-corporate case of that size with the Deputy or Assistant Commissioner. The Court held at paragraph 5 that “The notice under section 148 of the Act is jurisdictional notice” and that “any inherent defect therein is not curable”, and that a notice issued by an officer with no jurisdiction “has not been issued validly and is issued without authority in law”. The notice and the order rejecting objections were set aside.

Three things have to be said about that judgment before it is leaned on.

It is commonly cited as Ashok Devichand Jain v. ITO, including in the order under discussion. The respondent was the Union of India. It is also occasionally attributed to the Delhi High Court, including in the Delhi Tribunal’s order in YKM Holdings. It is Bombay.

It rests on a departmental concession. The judgment runs to nine paragraphs, of which paragraphs 2 and 3 are the petitioner’s submissions and paragraph 5 is the Court’s only legal paragraph. Paragraph 4 sets out the affidavit in reply of the Income Tax Officer who issued the notice, Suresh G. Kamble of Ward 12(3)(1), Mumbai, who “admits that such a defective notice has been issued” and explains that the PAN was lying in his ward and it was not feasible to migrate it to the Deputy Commissioner, Circle 12(3)(1) before 31 March 2019. The Revenue did not defend the Officer’s authority. The Court’s legal paragraph follows directly on that concession.

And it construes nothing. The judgment does not discuss Instruction 1/2011, which appears only in the petitioner’s submission. It does not mention section 120, section 124, section 127, section 292B or section 292BB. It does not address the section 124(3) bar or participation. It considers no contrary authority.

Alongside it the assessee has two general propositions. In Union of India v. Rajeev Bansal, 2024 INSC 754, decided 3 October 2024, the Supreme Court restated, in setting out the legal background to reassessment jurisdiction, that “There cannot be any waiver of a statutory requirement or provision that goes to the root of the jurisdiction of assessment. An order passed without jurisdiction is a nullity. Any consequential order passed or action taken will also be invalid and without jurisdiction.” That is a statement of principle in the background section of a judgment that went on to allow the Revenue’s appeals in substantial part on the TOLA question, so it should be cited as principle and not as the holding of the case. And the Delhi Bench in Ram Kumar Gupta applied the familiar rule that jurisdiction cannot be conferred by consent, which is the standard answer to the waiver and acquiescence line in Adarsh Developers, Abhishek Jain and Kalinga. The Revenue’s reply is that section 124(3) is Parliament’s own statutory answer to that rule: the legislature having fixed a period within which jurisdiction may be questioned, the common law maxim cannot be used to read the period out of the Act.

Against all of this the Revenue has a direct answer which the order under discussion does not deal with at all. In CIT v. S.S. Ahluwalia [2014] 46 taxmann.com 169 (Delhi) the Delhi High Court held that an assessment made without the reference required by section 124(4) is not a nullity but a curable irregularity, remediable by remand. If the breach of the section 124(4) duty, which is a statutory duty expressed in mandatory terms, produces only a curable irregularity, it is not obvious why breach of an administrative instruction should produce a nullity. That is the strongest form of the Revenue’s argument and it deserves an answer rather than silence. The answer available is that section 124(4) is a procedural obligation on an officer who does hold the case, whereas the objection here is that he never held it, so the two are not comparable. Whether a Bench accepts that depends on whether it has already accepted that the limits go to holding the case at all, which is the question the argument is supposed to be answering.

There is also CIT-III v. Shyam Sunder Infrastructure (P) Ltd, ITA 236/2014, decided by the Delhi High Court on 4 February 2015, where the Tribunal had set aside a reassessment for want of jurisdiction and the High Court reversed, holding that the assessee had forfeited the right under section 124(3)(a) by responding to the notice. The objection there was territorial, about which ward held the file, so the case does not decide the pecuniary question, and it should not be presented as though it did. Its value to the Revenue is narrower and still real: it shows a High Court willing to reverse a Tribunal that quashed an assessment on a jurisdiction point the assessee did not take in time, and it confirms that section 124(3)(a) applies to a reassessment of an assessee who filed a return.

The faceless overlay, and why it does not dispose of the point

There is a dimension to this case that neither side addressed and that will be the first thing a Departmental Representative raises on any file after 2019: the assessment was not made by the Assistant Commissioner at all. It was made through the faceless machinery, which is why the order is headed with sub-sections of section 143 rather than with the name of a Circle.

The Revenue’s argument from that is straightforward. Even if the notice came from an officer on the wrong side of a monetary limit, the assessment was made by a centre whose officers hold the powers of an Assessing Officer under a notification issued in exercise of the power in section 120, with no monetary threshold of any kind. Notification No. 22/2021, S.O. 1434(E), dated 31 March 2021, issued under sub-sections (1), (2) and (5) of section 120, directs that the income-tax authorities of the National Faceless Assessment Centre listed in its Schedule shall exercise the powers and functions of Assessing Officer concurrently, in respect of all persons, incomes and cases in India, to facilitate faceless assessment under section 144B. It allocates by person, income and case class, and it sets no figure. So, the Revenue says, there is no want of authority in the officer who actually made the order, and no prejudice of any description.

The assessee’s answer is that a valid notice under section 143(2) is the precondition of an assessment under section 143(3), and a centre’s concurrent powers cannot supply a precondition that was never satisfied. Whoever made the order, the question is whether the proceeding was validly begun.

Two further features of the faceless material are worth having, and they cut in opposite directions.

Section 144B contains no occurrence of the words “monetary” or “pecuniary” and no reference to section 120 at all. The notifications that stood up the faceless centres were issued under section 120 and conferred the powers of an Assessing Officer concurrently, not exclusively. So nothing in the faceless architecture displaces the ordinary allocation; it overlays it.

On the other hand, section 144B(8) provides that the Principal Chief Commissioner or Principal Director General in charge of the National Faceless Assessment Centre may at any stage transfer the case “to the Assessing Officer having jurisdiction over such case”, with the prior approval of the Board. That sub-section presupposes throughout that a jurisdictional Assessing Officer continues to have jurisdiction over the case while the faceless centre is dealing with it. The Revenue reads that as showing the two systems are complementary and that the jurisdictional officer’s authority is not suspended; the assessee reads it as confirming that there is a jurisdictional officer, identified by the ordinary allocation, whose identity therefore still matters.

The question is open, and a practitioner should expect to argue it rather than to find it answered.

The point nobody argued: rule 12E and Notification 65/2019

Section 143(2) does not say that the Assessing Officer issues the notice. It says:

Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income … shall serve on the assessee a notice …

The prescribed income-tax authority is prescribed by rule 12E of the Income-tax Rules 1962, inserted with effect from 16 November 2016, which says that the authority “shall be an income-tax authority not below the rank of an Income-tax Officer who has been authorised by the Central Board of Direct Taxes to act as income-tax authority for the purposes of sub-section (2) of section 143.” Rule 12E names no office. The office is named by notification.

Three notifications have done so in succession. Notification No. 65/2019, S.O. 3279(E), dated 13 September 2019 designated the Assistant Commissioner of Income-tax (e-Verification), headquartered at Delhi, as the prescribed income-tax authority for the purposes of section 143(2), in respect of returns furnished under section 139 or in response to section 142(1) “during the financial year commencing on 1st day of April, 2018”. It opens “In pursuance of the powers conferred by sub-section (1) and (2) of section 120 and sub-section (2) of Section 143 of the Income-tax Act, 1961 … read with rule 12E of the Income-tax Rules, 1962”, which shows the Board knows how to invoke section 120 when it intends to allocate. Notification No. 79/2020, S.O. 3304(E), dated 25 September 2020 moved the function to the Assistant or Deputy Commissioner (National e-Assessment Centre), Delhi, naming no financial year and coming into force on 13 August 2020. Notification No. 25/2021, S.O. 1437(E), dated 31 March 2021 moved it to the Assistant or Deputy Commissioner (NaFAC), Delhi, with effect from 1 April 2021, also covering returns under section 148(1).

Now apply that to this record. The return was furnished on 31 October 2018, which falls in the financial year commencing 1 April 2018. The notice is dated 28 September 2019, fifteen days after the date borne by Notification No. 65/2019, which came into force on its publication in the Gazette. On the face of the chain running from section 143(2) through rule 12E to that notification, the officer designated to issue this notice was the Assistant Commissioner (e-Verification), Delhi. It was issued by the jurisdictional Assistant Commissioner at Mumbai.

Neither side raised this. The order touches it only obliquely, at paragraph 10, where the Tribunal observes that the Departmental Representative did not “build up a case to show that the impugned ITO was specifically authorized to act as ‘prescribed authority’ for the purpose of issuance of the said notice.”

Both readings must be stated, because the sub-section is disjunctive. The Revenue’s answer is that the words are “the Assessing Officer or the prescribed income-tax authority, as the case may be”, so Parliament preserved two routes and the designation of a prescribed authority does not strip the Assessing Officer of a power the section gives him in terms. The faceless machinery was built on the same assumption: section 144B(1)(iii)(a), as it stood between 1 April 2021 and 31 March 2022, expressly contemplated a case where a notice under section 143(2) had been issued “by the Assessing Officer or the prescribed income-tax authority, as the case may be”, as paragraph 5(1)(iii)(a) of the Faceless Assessment Scheme had done from 17 February 2021, when Notification No. 6/2021 substituted paragraph 5(1). Neither helps on a notice of 2019, and neither is in force now: the Finance Act 2022 substituted section 144B entire and the clause did not survive. On the present text the argument has to be made from the words of section 143(2) itself. The assessee’s answer is that “as the case may be” is not surplusage: it points to whichever of the two is the right issuer for the case in hand, and once the Board has designated an authority for a defined class of returns, that class is the prescribed authority’s and not the Assessing Officer’s. The scheme’s own first limb helps here, because paragraph 5(1)(i) provides that “the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143 of the Act”, and the better view of the two clauses read together is that clause (i) states the rule for cases taken into the scheme and clause (iii)(a) a transitional saving for those already in flight.

One consequence of this chain has to be faced squarely, because it cuts against the ground on which the case was actually won. Notification No. 65/2019 designates an officer of Assistant Commissioner rank as the prescribed authority for section 143(2) notices on every return furnished in financial year 2018-19, with no monetary threshold at all. On the Board’s own instrument, therefore, an Assistant Commissioner was the contemplated issuer of the scrutiny notice in a Nil income case for this very year. The assessee’s answer is that the notification designates a particular office, the e-Verification unit at Delhi, and not Assistant Commissioners generally, so it says nothing about the jurisdictional Assistant Commissioner at Mumbai. The Revenue’s answer is that it shows the Board did not regard rank as tracking the size of the return at the issue of notice stage at all. Both are arguable. What is not arguable is that a practitioner running the Instruction 1/2011 ground for a return of financial year 2018-19 should expect this notification to be produced against him, and should have the answer ready.

The point is open and this article does not pretend otherwise. What can be said is that on a scrutiny file for a return furnished in financial year 2018-19, the question of who was entitled to issue the section 143(2) notice has a documentary answer that nobody in this case went looking for, and that the chain to it is entirely primary: the section, the rule, and a gazetted notification.

The recital nobody checked: an order under a machinery that no longer applied

The assessment order is dated 9 April 2021 and is expressed to be passed “u/s 143(3) r.w.s 143(3A) and 143(3B) of the Act”. On the statute as it stood that day, it could not have been.

Sub-sections (3A) and (3B) of section 143 were inserted by the Finance Act 2018 with effect from 1 April 2018: (3A) is the power to make a scheme for faceless assessment, (3B) the power to direct that provisions of the Act shall not apply or shall apply with modifications to give effect to it, with a proviso, as amended by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020, that “no direction shall be issued after the 31st day of March, 2021”. The same 2020 Act inserted sub-section (3D) with effect from 1 April 2021: “Nothing contained in sub-section (3A) and sub-section (3B) shall apply to the assessment made under sub-section (3) or under section 144, as the case may be, on or after the 1st day of April, 2021.” The cut-off is keyed to the date on which the assessment is made, not to the assessment year and not to when the proceedings began. An assessment made on 9 April 2021 therefore falls on the far side of the line.

The same 2020 Act inserted section 144B with effect from the same date. Section 144B(1) opens with a non obstante clause and requires an assessment under section 143(3) or section 144 to be made in a faceless manner, but only “in the cases referred to in sub-section (2)”, that is, in the territorial areas, persons, incomes and cases the Board specified. Faceless assessment was not universal on 9 April 2021, and central and international tax charges in particular stood outside the specification. So an assessment made that day was required to be made under section 144B only if the case fell within the Board’s specification, which is itself a thing to check on the file rather than to assume.

What this amounts to is a mis-recital rather than a ground. Section 144B(1) covers cases already in the pipeline, including those where a notice under section 143(2) had already been issued, and the realistic characterisation is that proceedings begun under the Faceless Assessment Scheme 2019 carried forward into section 144B rather than becoming void. No transitional provision preserving the sub-section (3A) scheme for in-flight cases was found, and one was looked for. It is also worth being precise about what happened to the sub-sections: they were never omitted and remain on the statute book, with the proviso still reading 2021. The scheme-making power expired and sub-section (3D) disapplied them prospectively.

To make anything of the recital a practitioner would have to pair it with an actual breach of the section 144B procedure: the show cause notice and draft assessment order, the opportunity of personal hearing, the role of the units. Even then the consequence is contested. Section 144B(9), as enacted, provided that an assessment not made in accordance with the procedure “shall be non est”. The Finance Act 2022 omitted sub-section (9) with retrospective effect from 1 April 2021, so for an order of April 2021 the Revenue’s first answer is that the statutory consequence has been taken away and the assessee is left to argue the breach as a violation of natural justice in a writ. The retrospectivity has itself been challenged and the position is not finally settled. The value of noticing the recital is simply that it tells you which statute to test the order against, and in April 2021 a great many orders were framed under the old heading by officers working from old templates.

The two jurisdictional grounds that were raised and not decided

The letter of 13 July 2026 took three additional grounds, not one. The second was that the notice under section 143(2) was void because it did not state whether the case had been selected for complete scrutiny or for limited scrutiny. The third was that if the selection was limited, the addition under section 50C travelled outside the scope for which the case had been picked up. Having quashed the notice on the first ground the Tribunal left both open.

They are worth more to a practitioner than they look, because neither depends on an unpublished Board instruction. The selection category is recorded in the system and is disclosable, and where the Department later widens the enquiry beyond a limited scrutiny the line of authority on travelling beyond the scope of selection is a free-standing ground that survives even if the pecuniary argument fails. On these facts the point has obvious bite: the return declared Nil, the information from the Director (INCI) concerned one transaction, and the addition made was the whole of a section 50C substitution on that transaction.

The Revenue’s answers are available and should be anticipated. The scrutiny category is communicated to the assessee separately, through the portal and in the first notice under section 142(1), so the omission from the body of the section 143(2) notice is at most an omission in a document and squarely within section 292B. And where the selection was for a reason connected with the very transaction in question, nothing travelled beyond anything. Whether the second answer is available depends entirely on what the selection reason actually said, which is why the reason should be asked for in writing at the outset.

The point is open on this record because nobody produced the selection reason. That is the lesson rather than the law.

What was left undecided, and what a win of this kind is actually worth

Having quashed the notice, the Tribunal held that the remaining grounds “become academic and are left open”. That is conventional and it is correct. It is also expensive, and the cost should be understood by anyone celebrating this kind of win.

The grounds left undecided were substantial. Beyond the two jurisdictional grounds just discussed, the company had argued that the land was not vacant or buildable, that it was encumbered and occupied by slum dwellers in unauthorised structures, that it had been sold on an “as is where is” basis subject to the occupants’ claims, and that the fair market value of such a property was far below the stamp duty value. It had argued that once it objected to the stamp duty value the Assessing Officer was bound to refer the valuation to the Departmental Valuation Officer under section 50C(2). It had argued for a cost of land at 70 per cent of consideration for ancient land, and for substitution of fair market value as on 1 April 2001 against an indexed cost of acquisition computed at Rs 33,32,000.

On the section 50C(2) ground one textual point is worth recording, because the appeal put the proposition higher than the sub-section does. Ground iii asserted that the Assessing Officer “is mandatorily required to refer the matter to the Valuation Officer”. The words of section 50C(2) are that where the assessee claims before any Assessing Officer that the stamp duty value exceeds the fair market value as on the date of transfer, and where the stamp value has not been disputed in any appeal or revision or reference elsewhere, “the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer”. The verb is “may”. The authority usually cited against that is Sunil Kumar Agarwal v. CIT (2015) 372 ITR 83 (Cal), and it is worth knowing what it actually says, because it does not construe the word “may” at all. The Calcutta High Court reasoned from fairness and from the Assessing Officer’s position as a quasi-judicial authority: “the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice”, and even where no prayer is made by an advocate “who may not have been properly instructed in law”, the Officer “has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law”, so that “as a matter of course, in all such cases the AO should give an option to the assessee to have the valuation made by the DVO.” The duty as framed is to offer the option. That is a real argument and it is not the same as saying “may” means “shall”. Note too that the comparator in clause (a) is the fair market value and not the actual consideration, which matters on facts like these where the consideration was depressed by encumbrances.

So what is the win worth? Three things decide it, and the article would be incomplete without them.

Whether a fresh notice can issue. On these facts it cannot. The six month window under the then proviso to section 143(2) closed on 30 September 2019, so the quash is terminal and the return stands as filed. That is not generally so. In Kalinga the Orissa High Court expressly gave liberty to the competent authority to issue a fresh notice and the Supreme Court gave sixty days to complete the assessment. A quash obtained early may simply hand the Department a second and valid notice; a quash obtained after limitation has run is a final win. That distinction should drive the decision when to take the point, and it is the one consideration that argues for not taking it at the earliest opportunity. Weigh it against the fact that a late objection runs straight into section 124(3).

What other routes the Revenue has back in. A quashed scrutiny notice leaves the return as filed, which is an intimation position rather than an assessed one, so section 263 has little to bite on. The live risk is a reopening under section 147 and section 148 on the same information, subject to the gateway in section 149 and to the approval in section 151. A reopening founded on information the Department has held since 2019 is itself contestable, on change of opinion and on the information definition in section 148(3), but it is not fanciful and the dates should be worked before the Tribunal is asked for relief.

Whether the Revenue can appeal at all. The addition was Rs 1,88,28,600, so the tax effect is a fraction of the threshold. By Circular No. 9/2024 dated 17 September 2024, issued under section 268A, the Board raised the monetary limits for departmental appeals to Rs 60 lakhs for the Tribunal, Rs 2 crores for a High Court and Rs 5 crores for the Supreme Court, applying the limits to pending appeals as well as to fresh ones. Circular 9/2024 contains no exclusion list of its own; it applies the limits to all cases “except as provided in paras 3.1 and 3.2 of Circular 5/2024”, the earlier circular of 15 March 2024. Those paragraphs are where the exceptions live, and a practitioner who wants to rely on the threshold should read them, because the list is narrower than it is often assumed to be: it covers things such as a provision being held ultra vires, a Board instruction being held illegal, information from enforcement agencies, pending prosecution, strictures against the Department, unquantifiable tax effect, undisclosed foreign assets, organised evasion through penny stocks and accommodation entries, court directions, writ matters and certain TDS and treaty questions. There is no general exclusion for a recurring question of law and none for a jurisdictional question. Anyone who tells you that a jurisdictional point is outside the limits because it recurs is working from the older instructions and not from Circular 5/2024.

On a file where the merits are strong there is still something to be said for inviting the Tribunal to decide them in the alternative, even after it has quashed the notice. Benches sometimes do and sometimes decline, but the request costs nothing and the absence of alternative findings is what makes a jurisdictional win fragile if it is ever disturbed.

The peculiar facts caveat, and how to read the order

The closing words of paragraph 11 are unusual and are the first thing an opposing Departmental Representative will read out:

We, however, make it clear that this decision stems from the peculiar facts and circumstances of the instant case and should not be interpreted as being applicable to all cases where the jurisdictional notice is challenged.

What should be made of it?

It cannot mean that the order has no precedential value at all, because a decision on a pure question of law does not stop being a decision because the Bench says so. What it realistically signals is that the Bench was conscious of three things: that the authority of the Allahabad High Court runs the other way, that the ground came very late, and that the Revenue’s conduct of the point had been thin. The Departmental Representative relied on four propositions and no document. Nothing was produced to show a jurisdiction order under section 120(2), a transfer under section 127, a concurrent jurisdiction order under section 120(5), a direction of the Board under the Explanation to section 120(1), an adjustment under Instruction 6/2011, or an authorisation of this officer as the prescribed authority.

Fairness requires the symmetrical observation, and it is one the assessee’s side of this argument rarely makes. No jurisdiction order under section 120(2) for the Mumbai charge was produced by either side. The assessee’s case that this file belonged to an Income Tax Officer is an inference from a Board instruction the Department does not publish, not a reading of the order that actually vested the charge. Where the Department does produce its jurisdiction order, as it did in Allahabad, the argument looks different. An assessee who wants to run this point should obtain that order himself rather than wait to see whether the Department produces it.

So the realistic reading is that this is a decision on an unanswered record on both sides. That is worth a great deal to the practitioner whose Departmental Representative also produces nothing, and worth considerably less against one who produces the jurisdiction order.

Three further things on the face of the order are worth noting, in the interests of reading it accurately rather than of criticising it.

The order’s own citations should be checked before they are reused. It names the Bombay decision as “Peter Vax” where the case is Peter Vaz, and gives the appeals as “Tax Appeal No. 19, 21 to 25 of 2017” where the range is 19 to 30 of 2017. It names Ashok Devichand Jain as against the Income Tax Officer where the respondent was the Union of India. It cites Kalinga at 151 taxmann.com 234 where the report is at 434. It names the same Delhi decision “Balram Sharma” at one place and “Balraj Sharma” at another. It calls the Raipur decision Aananda Devicon where the cause title is Aananda Devcon, a corruption that appears to have travelled from the reporter into a line of orders. Several of these errors are inherited rather than original, which is how citation errors propagate in this field.

Paragraph 3 records that “necessary approval u/s 151 of the Act was obtained by the AO and statutory notices were issued”. Section 151 supplies the sanction for a notice under section 148, that is, for a reassessment. The notice quashed here is under section 143(2) and the assessment is under section 143(3), and the dates are those of a regular scrutiny: a return of 31 October 2018 and a notice of 28 September 2019, two days inside the then six month limit. A section 151 approval has no place in that sequence. The likeliest explanation is a drafting slip. It is worth flagging because if the proceeding had in truth been a reassessment the whole analysis would shift: the notice would be under section 147 and section 148 rather than section 143(2), and the sanction under section 151 would be an additional battleground.

The text of section 292BB reproduced at page 8 of the order contains an evident corruption, reading “or 75co-operated in any inquiry” for “or co-operated in any inquiry”. Quote the section, not the order. The same applies to paragraph 10, which has the direction of the transfer the wrong way round, as noted above.

None of these affects the outcome. All are reasons to go back to the primary sources rather than to work from the order, which is in any case the better practice.

One more trap for the unwary. Durga Manikanta Traders v. ITO appears frequently in this line and the Revenue’s appeal against it, TAXC No. 110 of 2023, was disposed of by the Chhattisgarh High Court on 30 September 2024 purely because the tax effect fell below the Rs 2 crore limit, with no ruling on the merits. The Tribunal order stands unreversed and it was never affirmed. Anyone citing it as High Court approved will be corrected.

Under the Income-tax Act, 2025

The architecture survives the recodification with the numbers changed, and with one provision whose character changes.

Section 120 becomes section 241, section 124 becomes section 242 and section 127 becomes section 243, all in Chapter XIV, “Tax administration”. Section 143(2) becomes section 270(8), within section 270, “Assessment”, in Chapter XVI, and the time limit becomes a free-standing section 270(9) rather than a proviso, reading three months. Section 292B becomes section 522 and section 292BB becomes section 523, both in Chapter XXIII.

Four traps for anyone drafting against the new numbers.

The bar on challenging jurisdiction is in section 242(4), not section 242(3). The 2025 Act splits the old section 124(2) into two sub-sections, (2) for a single authority and (3) for competing authorities, so the clause-by-clause bar moves down one. Writing section 242(3) will be wrong.

Section 523 has no proviso. What was the proviso to section 292BB becomes a free-standing sub-section (2), so the correct reference is section 523(2).

Section 242(1) remains area-based and section 242(6) remains the “all the powers” provision, so the structural argument set out in this article transfers across unchanged. The long recitals of officer ranks are replaced throughout by the defined term “specified income-tax authority”.

And there is a provision whose re-enactment changes its character. Section 245, “Faceless jurisdiction of income-tax authorities”, corresponds to section 130 of the 1961 Act, which sits in the same part of that Act as sections 120 to 127 and was inserted by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 with effect from 1 November 2020. Section 245 empowers the Central Government by notification to make a scheme for the exercise of the powers referred to in section 241, for “vesting the jurisdiction with the Assessing Officer under section 242”, for the exercise of the power to transfer cases under section 243 and for jurisdiction on change of incumbency under section 244. Its objects include “introducing a team-based exercise of powers and performance of functions by two or more income-tax authorities, concurrently, in respect of any area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, with dynamic jurisdiction.”

Two features bear directly on everything above. Its objects clause expressly contemplates allocation “in respect of … incomes or classes of income”, with dynamic jurisdiction, which is a firmer textual foothold for an allocation by amount than anything in section 120(3). And while section 130(2) of the 1961 Act carries a sunset, “Provided that no direction shall be issued after the 31st day of March, 2022”, section 245(3) of the 2025 Act carries no sunset at all. The power to disapply provisions of the Act for the purposes of a faceless jurisdiction scheme is, under the new Act, permanent. Our page on section 151A deals with the equivalent question on the reassessment side, where the expiry of the corresponding power on 31 March 2022 is itself a live ground.

What this means in practice is that the argument in this article is a 1961 Act argument with a limited life. For tax years from 2026-27 the Department will be allocating under a statute that says in terms that a scheme may vest jurisdiction with the Assessing Officer and may do so by reference to classes of income, and the gap between the instruction and the enabling provision will be much harder to open.

On a live file

A note on which files this is for. On a notice issued from 1 April 2021 the section 143(2) notice comes from the National Faceless Assessment Centre, not from a named rank, and the question becomes whether the jurisdictional Assessing Officer underneath holds the case at all rather than who signed the notice. The steps below are written for a notice issued by a named officer, which in practice means an assessment year up to 2020-21, a reassessment where the notice came from the jurisdictional officer, or a central charge.

At the notice stage, within one month of service. Compare the returned income against the limit for the class of assessee and for the station. Confirm whether the station is one of the eight metro charges named in Instruction 1/2011. If the officer is on the wrong side of the line, object in writing to the Assessing Officer, and ask expressly under section 124(4) that the question be referred for determination under section 124(2) before the assessment is made. Do not rely on an oral objection and do not let the objection sit inside a reply on the merits: make it a separate letter with its own subject line, and keep the acknowledgment. The one month matters doubly, because the duty under section 124(4) is expressed to be subject to section 124(3) and does not arise on an objection that is already out of time.

In the same letter, ask for the documents. The jurisdiction order under section 120(2) under which this officer claims to hold the case, which is the document that actually decides the question; any order under section 127 transferring the case; any concurrent jurisdiction order under section 120(5); any direction of the Board under the Explanation to section 120(1); any adjustment of the limits under Instruction 6/2011 and the reasons recorded for it; any authorisation of the officer as prescribed authority for the purposes of section 143(2) read with rule 12E; and the reason recorded for selecting the case for scrutiny, with the category of selection. A refusal or a silence is itself worth having on the file. And obtain the jurisdiction order for the charge yourself, rather than relying on the Department to produce it.

Check who the prescribed authority was, on the date the notice issued. Notification No. 65/2019 is keyed to the class of return: it covers returns furnished under section 139 or in response to section 142(1) during the financial year commencing 1 April 2018, and it came into force on publication in the Gazette. Notification No. 79/2020 names no financial year; it authorises the Assistant or Deputy Commissioner (National e-Assessment Centre), Delhi for returns under section 139 or section 142(1) generally and came into force on 13 August 2020. Notification No. 25/2021 moved the function to the Assistant or Deputy Commissioner (NaFAC), Delhi from 1 April 2021 and also covers returns under section 148(1). There is a later notification of 2022 which may have superseded 25/2021 and which should be checked for a current year. So identify the date of the notice first, then the instrument in force on that date, and only then ask whether the class of return brings a particular designation into play. For a return furnished in financial year 2019-20, or before 13 August 2020 in 2020-21, no designation covering that class of returns could be traced for this article. Do not assume there was none and do not assume there was one: ask for the authorisation in writing and record the answer.

Check the dates on the notice itself. For a notice up to 31 March 2021 the proviso to section 143(2) allowed six months from the end of the financial year in which the return was furnished; from 1 April 2021 it is three months. Testing an older notice against the three month rule will produce a wrong answer in the assessee’s favour, which is worse than no answer at all. On limitation for completing the assessment, see our page on section 153.

If the objection is not answered, say so in the appeal. The failure to make the reference required by section 124(4) is a ground, though it is not independent of timing: the duty arises only on a timely objection, and the Revenue’s answer on the merits, that the breach is a curable irregularity on S.S. Ahluwalia, is at least an answer that concedes the duty.

Take the ground before the Commissioner (Appeals) where an appeal is pending, under section 250(5), rather than saving it for the Tribunal. Where it is the Revenue that has appealed to the Tribunal from relief given below, the vehicle is a cross-objection, which is how the point reached the Bench in Khadamat and in Svadeshi Enterprises, in both cases with delay condoned.

Before the Tribunal, put the three facts on the record. The returned income, the designation of the officer who issued the notice, and the station. File the notice itself. Without those an additional ground is not the pure question of law that NTPC covers, and put an explanation for the delay on the record even though the ground is jurisdictional.

Be candid about the authority. The Bench will be told about Shivaaditiya, and it is better to deal with it in opening than to be seen to have avoided it. Lead with the cases on the present fact pattern rather than with the longer list of officer-too-junior cases, and say which proposition each case is being cited for.

Work out what a win is worth before you take it. Whether a fresh notice can still issue, whether a reopening under section 148 is available on the same information, and whether the tax effect clears the Rs 2 crore threshold for a departmental appeal to a High Court. Ask for the merits in the alternative, because a jurisdictional win that leaves every other ground undecided is a win that can be undone entirely.

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This article states the law as at 19 October 2026 and is written for general information. It is not advice on any particular file. Where a point could not be closed against a primary source, this article says so on the page rather than asserting it. In particular: the text of CBDT Instruction No. 1/2011 is taken from published reproductions, the Department not publishing the instruction on its own website; a clarification dated 8 December 2011 which the Board treats as part of the jurisdiction criteria could not be traced; the 2026 revision of the limits for the Delhi Region rests on secondary sources, with the position in other regions not established; no law report citation could be traced for PCIT v. Mintu Das; the decision cited in the order under discussion as Balram or Balraj Sharma could not be verified under either name and is not relied on; and Ambience Farms and Harish Kumar Chhabada are mentioned as authorities a practitioner may meet but could not be obtained and are not cited.

This note is general commentary on the law as at 19 October 2026 and is not advice on any matter. The position in a particular case depends on its own facts.