Section 120 of ITA, 1961 : Section 120: Jurisdiction Of Income-Tax Authorities

Explanation using Example

Imagine a small business owner, Mr. Sharma, who operates a chain of cafes in Mumbai. The Income Tax Department, under the Income-tax Act, 1961, needs to conduct an audit of his business for the previous financial year. The Board (Central Board of Direct Taxes) issues a direction that due to the complexity and volume of cases in Mumbai, a higher-ranking Income-tax authority, such as a Joint Commissioner, will directly oversee the audit of businesses like Mr. Sharma's instead of the usual Assessing Officer.

In this scenario, the Joint Commissioner, in accordance with Section 120(4)(b) of the Income-tax Act, may exercise the powers typically held by the Assessing Officer for Mr. Sharma's case. This means that the Joint Commissioner will handle the assessment, and any references to the Assessing Officer in other provisions would now be referring to the Joint Commissioner for the purpose of Mr. Sharma's audit.

This reallocation of duties helps streamline the process and ensures that cases requiring more expertise are managed by officers with the appropriate level of experience and authority.