Jurisdiction of income-tax authorities.

241 (1)

The income-tax authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or assigned to, such authorities under this Act as per 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.

241 (2)

Any income-tax authority, being an authority higher in rank, may, if so directed by the Board, exercise the powers and perform the functions of an income-tax authority lower in rank and any such direction issued by the Board shall be deemed to be a direction issued under sub-section (1).

241 (3)

The directions of the Board under sub-section (1) may authorise any other income-tax authority to issue orders in writing for the exercise of the powers and performance of the functions by all or any of the other income-tax authorities who are subordinate to it.

241 (4)

In issuing the directions or orders referred to in sub-sections (1), (2) and (3), the Board or other income-tax authority authorised by it may have regard to any one or more of the following criteria:—

• (a) territorial area;
• (b) persons or classes of persons;
• (c) incomes or classes of income; and
• (d) cases or classes of cases.

241(5)

Without prejudice to sub-sections (1), (2) and (3), the Board may, by general or special order, subject to such conditions, restrictions or limitations as specified therein––

• (a) authorise any Principal Director General or Director General or Principal Director or Director to perform such functions of any other income-tax authority as may be assigned to him by the Board;

• (b) empower the specified income-tax authority to issue orders in writing that the powers and functions assigned to the Assessing Officer under this Act in respect of any specified area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, shall be exercised or performed by an Additional Commissioner or an Additional Director or a Joint Commissioner or a Joint Director.

241 (6)

Where any order is made under sub-section (5)(b), references in any other provision of this Act or in any rule made thereunder, to the Assessing Officer shall be deemed to be references to such Additional Commissioner or Additional Director or Joint Commissioner or Joint Director by whom the powers and functions are to be exercised or performed under such order, and any provision of this Act requiring approval or sanction of the Joint Commissioner shall not apply.

241 (7)

The directions and orders referred to in sub-sections (1), (2) and (3) may, wherever considered necessary or appropriate for the proper management of work, require two or more Assessing Officers (whether or not of the same class) to exercise and perform, concurrently, the powers and functions in respect of any area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, and––

• (a) where such powers and functions are exercised and performed concurrently by the Assessing Officers of different classes, any authority lower in rank amongst them shall exercise the powers and perform the functions as any higher authority amongst them may direct; and
• (b) references in any other provision of this Act or in any rule made thereunder to the Assessing Officer shall be deemed to be references to such higher authority and any provision of this Act requiring approval or sanction of any such authority shall not apply.

241(8)

Irrespective of anything contained in any direction or order issued under this section, or in section 242, the Board may, by notification, issue any direction for the purposes of furnishing of the return of income or the doing of any other act or thing under this Act or any rule made thereunder by any person or class of persons.

241 (9)

The income-tax authority exercising and performing the powers and functions in relation to the person or class of persons referred to in sub-section (8) shall be such authority as specified in the notification issued under that sub-section.

Explanation

Section Summary:

Section 241 of the Income Tax Act outlines the jurisdiction and powers of income-tax authorities. It provides the Central Board of Direct Taxes (CBDT) with the authority to issue directions on how income-tax authorities should exercise their powers and perform their functions. This section also allows higher-ranking authorities to perform the duties of lower-ranking authorities and enables the delegation of powers and functions among different authorities based on specific criteria like territorial area, types of income, or classes of taxpayers.

Key Changes:

1. Delegation of Powers: The section explicitly allows higher-ranking authorities (e.g., Principal Director General, Director General) to perform functions of lower-ranking authorities (e.g., Assessing Officers) if directed by the Board.
2. Concurrent Jurisdiction: It introduces the concept of concurrent jurisdiction, where two or more Assessing Officers can exercise powers simultaneously over the same case or area.
3. Flexibility in Assigning Functions: The Board can assign specific functions to higher-ranking officers (e.g., Additional Commissioner, Joint Commissioner) instead of the Assessing Officer, bypassing the need for certain approvals or sanctions.
4. Notification Authority: The Board can issue notifications to specify which authority will handle specific cases or classes of taxpayers, particularly for filing returns or other compliance-related tasks.

Practical Implications:

1. For Taxpayers: Taxpayers may interact with higher-ranking officers (e.g., Joint Commissioners) instead of Assessing Officers in certain cases, which could lead to faster decision-making or stricter scrutiny depending on the situation.
2. For Businesses: Businesses may face concurrent jurisdiction, meaning multiple officers could review their tax matters simultaneously. This could increase compliance burdens but also ensure more thorough oversight.
3. For Tax Authorities: The section provides flexibility in managing workloads and assigning cases, improving administrative efficiency. However, it also requires clear communication to avoid confusion over which authority is responsible for a specific case.

Critical Concepts:

1. Concurrent Jurisdiction: When two or more Assessing Officers are authorized to handle the same case or area simultaneously. The higher-ranking officer can direct the lower-ranking officer in such scenarios.
2. Deemed References: If a higher-ranking officer is assigned the functions of an Assessing Officer, references to the Assessing Officer in other provisions of the Act will be treated as references to the higher-ranking officer.
3. Territorial and Functional Criteria: The Board can assign cases based on geographic areas, types of income, or specific taxpayer categories, ensuring targeted administration.

Compliance Steps:

1. Stay Informed: Taxpayers and businesses should monitor notifications from the Board to understand which authority is handling their case.
2. Documentation: Maintain clear records of communications with tax authorities, especially in cases of concurrent jurisdiction.
3. Adherence to Notifications: Follow any specific directions issued by the Board regarding filing returns or other compliance tasks.

Examples:

1. Scenario 1: The Board issues a notification assigning all cases related to high-net-worth individuals in a specific region to a Joint Commissioner. A taxpayer in that region would now interact with the Joint Commissioner instead of the Assessing Officer.
2. Scenario 2: Two Assessing Officers are assigned to review a large corporation’s tax filings concurrently. The higher-ranking officer directs the lower-ranking officer to focus on specific aspects of the case, streamlining the review process.

This section enhances administrative flexibility but requires taxpayers and businesses to stay vigilant about which authority is handling their tax matters.