Section 124 of ITA, 1961 : Section 124: Jurisdiction Of Assessing Officers

Explanation using Example

Imagine a business owner, Mr. Gupta, who operates a chain of retail stores across different regions in India. The principal place of his business is located in Mumbai. According to Section 124 of the Income-tax Act, 1961, the Assessing Officer (AO) with jurisdiction over Mumbai would be responsible for assessing Mr. Gupta's taxes since his principal place of business is situated within that area.

One day, Mr. Gupta receives a notice from an AO based in Delhi, questioning certain transactions. Confused, Mr. Gupta believes that the Delhi AO does not have jurisdiction over his tax matters. He can raise this question of jurisdiction with the concerned authorities as mentioned in the Act, and if there's a disagreement between the Commissioners, the matter will be resolved by the specified authority or the Board.

However, if Mr. Gupta had already filed his returns and received a notice from the Mumbai AO and one month has passed, or the assessment is complete (whichever is earlier), he cannot later question the Mumbai AO's jurisdiction as per the provisions of the Act.

In a situation where Mr. Gupta has not filed his returns, he must raise the question of jurisdiction before the expiry of the time allowed to file the return or respond to the notices as specified in the Act.

Lastly, if Mr. Gupta's business was subject to an action under section 132 or section 132A (pertaining to search and seizure), he would need to question the jurisdiction within one month of being served a notice under the relevant sections related to such actions.