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Income Tax Law | Jurisdiction

Section 120 of the Income-tax Act, 1961: Jurisdiction of Income-tax Authorities

Section 120 of the Income-tax Act, 1961 lays down how the Central Board of Direct Taxes (CBDT) allocates jurisdiction, powers and functions among income-tax authorities. The corresponding provision for tax years governed by the Income-tax Act, 2025 is section 241.

Law applicable from 1 April 2026: The Income-tax Act, 2025 commenced on 1 April 2026. Section 120 of the 1961 Act remains relevant to earlier tax years and proceedings preserved by the repeal and savings provisions of section 536 of the 2025 Act. Check the relevant tax year and proceedings before applying either provision.

What is jurisdiction under section 120?

Jurisdiction is the legally assigned authority to exercise specified income-tax powers over particular taxpayers, geographical areas, categories of income or cases. Under section 120, an officer's designation alone does not necessarily establish authority over every taxpayer: the relevant CBDT directions, orders and statutory provisions must also be considered.

Section 120 of the Income-tax Act, 1961: Subsection-wise explanation

Section 120(1): CBDT directions

Income-tax authorities exercise the powers and functions conferred or assigned under the Act in accordance with directions issued by the CBDT. The Explanation clarifies that a higher-ranking authority may exercise a lower-ranking authority's powers and functions when the Board so directs.

Section 120(2): Delegation of administrative directions

The Board may authorise another income-tax authority to issue written orders allocating powers and functions among authorities subordinate to it.

Section 120(3): Criteria for assigning jurisdiction

Jurisdiction may be determined by one or more of four criteria:

  • Territorial area: a city, district, region or other specified area;
  • Persons or classes of persons: specified taxpayers or taxpayer categories;
  • Incomes or classes of income: particular types of taxable income; and
  • Cases or classes of cases: specified proceedings or groups of cases.

Section 120(4): Assignment of functions and Assessing Officer powers

Subject to conditions, restrictions and limitations in the relevant orders, the Board may authorise designated senior officers to perform functions of other authorities. It may also empower specified senior officers to direct that Assessing Officer functions for identified areas, persons, incomes or cases be performed by Additional Commissioners, Additional Directors, Joint Commissioners or Joint Directors. Statutory references and approval requirements operate as provided in this subsection and the relevant order.

Section 120(5): Concurrent jurisdiction

Directions or orders may assign the same functions to two or more Assessing Officers concurrently. Where the officers are of different ranks, the lower-ranking authority acts as directed by the higher-ranking authority, with the statutory consequences for references to the Assessing Officer and certain approval requirements.

Section 120(6): Notification for returns and other compliance

Despite other jurisdictional orders and section 124, the Board may notify the income-tax authority responsible for receiving returns or carrying out other specified acts for a person or class of persons.

How the jurisdiction rules work in practice

For example, the CBDT may allocate a class of corporate taxpayers to a designated assessment unit, or confer concurrent jurisdiction on specified officers for a category of cases. The valid order or notification, not merely a taxpayer's location, determines which authority may perform the assigned function.

If a taxpayer disputes an Assessing Officer's jurisdiction, the procedural rules and time limits under section 124 of the 1961 Act may be relevant. A case transfer raises a separate question under section 127. These provisions should not be treated as interchangeable.

Corresponding section 241 of the Income-tax Act, 2025

Section 241 of the Income-tax Act, 2025 restates and reorganises the jurisdiction framework in nine subsections. It covers Board directions, powers exercised by higher-ranking officers, written allocation orders, the same four jurisdiction criteria, delegation of Assessing Officer functions, concurrent jurisdiction and notifications for return-filing or other statutory acts.

The provisions are not identical in numbering: the earlier section 120(4) is reorganised across subsections 241(5) and 241(6), concurrent jurisdiction appears in section 241(7), and notification-related provisions appear in subsections 241(8) and 241(9). Refer to the applicable Act and current notification when dealing with an actual proceeding.

Section 116 identifies the classes of income-tax authorities; section 117 deals with their appointment; section 118 addresses subordination; and section 119 concerns CBDT instructions. Section 120 is specifically concerned with jurisdiction and allocation of functions.

Official legislation and guidance

Frequently asked questions

Who decides the jurisdiction of income-tax authorities?

The CBDT issues jurisdictional directions under section 120 of the 1961 Act or section 241 of the 2025 Act, as applicable, and may authorise other authorities to issue written allocation orders.

Can two Assessing Officers have concurrent jurisdiction?

Yes. Section 120(5) of the 1961 Act and section 241(7) of the 2025 Act provide for concurrent exercise of specified powers and functions.

Is section 120 still relevant after 1 April 2026?

Yes, for earlier tax years and saved proceedings governed by the 1961 Act. For the new Act, the corresponding jurisdiction provision is section 241.

This article explains the statutory framework and is not a substitute for the applicable CBDT notification, jurisdiction order or professional advice in a specific case. Updated 26 October 2026.