Section 241 · Administration
Section 241 of the Income-tax Act, 2025 — Jurisdiction of Income-tax Authorities
By CA Rajat Agrawal
Updated 04 Jul 2026
Chapter XIV
📜 What the law says — Section 241, Income-tax Act 2025
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.
(2) Any income-tax authority, being an authority higher in rank, may, if so direct-
ed 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).
(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.
(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.
(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 conferred on, or assigned to, the Assess-
ing 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.
(6) Where any order is made under sub-section (5)(b), references in any other pro-
vision 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
In plain language
What Section 241 actually says
Section 241 of the Income-tax Act, 2025 is the foundation stone of the entire tax administration machinery. It answers a simple but crucial question: which income-tax officer has the power to act in your case, and who decides that? The answer is the Central Board of Direct Taxes (CBDT), referred to in the section as "the Board".
In plain words, income-tax authorities (Principal Chief Commissioners, Chief Commissioners, Commissioners, Assessing Officers, and so on) do not pick their own powers. They exercise powers and perform functions strictly in accordance with the directions the Board issues. Section 241 is the enabling provision that lets the Board carve up the country's tax work and hand it out in an orderly way.
The key building blocks of the section
- Board directions (sub-section 1): All authorities work as per directions the Board issues for the exercise of powers and performance of functions.
- Higher may do the work of lower (sub-section 2): If the Board so directs, a higher-ranked authority can exercise the powers and functions of an authority lower in rank. Such a direction is treated as if it were issued under sub-section (1).
- Delegated written orders (sub-section 3): The Board can authorise an authority to issue written orders telling subordinate authorities how to exercise their powers.
- Jurisdiction criteria (sub-section 4): When allotting work, the Board may go by any one or more of four yardsticks - (a) territorial area, (b) persons or classes of persons, (c) incomes or classes of income, and (d) cases or classes of cases.
- Empowering senior officers to delegate (sub-section 5): The Board can let senior officers (Director General, Director, etc.) perform others' functions and empower specified authorities to delegate Assessing Officer powers downward.
- "Assessing Officer" reads flexibly (sub-section 6): Wherever the Act says "Assessing Officer", it means whoever is actually performing that function under Board orders.
- Concurrent jurisdiction (sub-section 7): Two or more Assessing Officers may work on the same area/persons/income/cases at the same time; the lower-ranked follows the higher-ranked officer's directions.
- Board's override by notification (sub-section 8 & 9): Notwithstanding any order, the Board can by notification direct return filing or any other act by any person or class, and specify which authority handles them.
Who does it apply to
Section 241 applies to every taxpayer indirectly and every income-tax authority directly. You will rarely quote it in your ITR, but it is the reason a Mumbai salaried employee is assessed by a Mumbai ward officer while a large corporate goes to a Central Circle or an International Taxation range. It is also the legal basis for the faceless assessment ecosystem, where "your" Assessing Officer may be a team sitting anywhere in India rather than a local ward.
How it connects to other sections
- Section 242 deals with the jurisdiction of Assessing Officers and a taxpayer's right to question jurisdiction within a time limit - it is the 2025 successor of the old Section 124 of the 1961 Act.
- Section 241 itself is the successor of Section 120 of the Income-tax Act, 1961, retaining the same architecture in cleaner language.
- It underpins faceless assessment, appeal and penalty schemes, transfer of cases, and the powers of the various authorities listed in the administration chapter.
Practical implications for you
- You cannot choose your officer, but you also cannot be assessed by an officer who has no jurisdiction over you - jurisdiction flows from Board directions under this section.
- If you feel the wrong officer is acting, the challenge is raised under Section 242 (time-bound objection), not Section 241.
- Notices are valid only if the issuing authority has jurisdiction traceable to a Board direction/notification under Section 241; a jurisdiction defect can be a serious ground of challenge.
- Concurrent jurisdiction means you may occasionally deal with more than one officer on the same matter - this is lawful under sub-section (7).
💡 Example
Example 1 - Territorial vs. class-based jurisdiction: Rahul, a salaried employee in Pune with total income of ₹14,00,000, files his return. Under a CBDT direction issued through Section 241(4)(a) (territorial area) and 241(4)(c) (income class), non-corporate salaried cases in his PIN-code range up to a certain income limit are allotted to a specific Income-tax Officer (Ward). So Rahul's assessment, if any, is handled by that ward - not by a Central Circle meant for search cases.
Example 2 - Higher officer stepping in: A private company, Zenith Traders Pvt. Ltd., with income of ₹9,50,00,000 and a complex transfer-pricing angle, is moved out of the ordinary corporate range. Using Section 241(2) and 241(5), the Board directs that the case be handled by a higher-ranked authority in the International Taxation/Transfer Pricing set-up. The company cannot insist on staying with its old local officer, because the reassignment flows from a valid Board direction.
A relatable story: When Meena received a scrutiny notice, she panicked because it came from a faceless assessment unit in another state, not her familiar local ward. Her CA explained that under Section 241, the Board can allot cases by "cases or classes of cases" and empower officers to act concurrently and even faceless - so the notice was perfectly valid. What actually mattered, the CA said, was whether the objection window under Section 242 was met, not who physically sat where. Meena relaxed and responded on the portal.
| Aspect | Section 241, Income-tax Act 2025 | Section 120, Income-tax Act 1961 (old) |
|---|
| Subject | Jurisdiction of income-tax authorities (general framework) | Jurisdiction of income-tax authorities |
| Who decides jurisdiction | CBDT ("the Board") through directions/orders/notifications | CBDT through directions/orders |
| Jurisdiction criteria | (a) Territorial area (b) Persons/classes (c) Incomes/classes (d) Cases/classes | Same four criteria |
| Higher doing lower's work | Allowed if Board directs [s.241(2)] | Allowed [s.120(2)] |
| Concurrent jurisdiction | Expressly allowed; lower follows higher [s.241(7)] | Expressly allowed |
| Board override by notification | Yes, for return filing / any act [s.241(8)-(9)] | Yes |
| Related AO-level provision | Section 242 (right to object to jurisdiction) | Section 124 |
Related sections
Section 242 — Jurisdiction of Assessing Officers and objection to jurisdiction Section 243 — Power to transfer cases Section 240 — Income-tax authorities (classes of authorities) Section 244 — Change of incumbent of an office Section 246 — Faceless jurisdiction / assessment scheme Section 120 (Act of 1961) — Old equivalent on jurisdiction of authorities
Frequently asked questions
What does Section 241 of the Income-tax Act 2025 deal with?
It lays down how the CBDT (the Board) assigns powers and functions to income-tax authorities, i.e. it is the general framework for the jurisdiction of income-tax authorities. It is the 2025 Act's successor to Section 120 of the 1961 Act.
Can I choose which income-tax officer assesses me?
No. Jurisdiction is allotted by the Board through directions and notifications under Section 241, generally based on territory, class of person, class of income or class of case. You cannot self-select your officer.
What is the difference between Section 241 and Section 242?
Section 241 is the broad framework that empowers the Board to fix jurisdiction of all authorities. Section 242 deals specifically with the Assessing Officer's jurisdiction and gives the taxpayer a time-bound right to object to jurisdiction.
What are the criteria used to fix jurisdiction under Section 241?
The Board may use any one or more of four criteria: territorial area, persons or classes of persons, incomes or classes of income, and cases or classes of cases.
Is faceless assessment covered by Section 241?
Yes, indirectly. Section 241 lets the Board allot cases by class and permit officers to act concurrently and through delegated orders, which is the legal backbone that supports faceless assessment where an officer need not be local.
Can two officers handle my case at the same time?
Yes. Sub-section (7) allows two or more Assessing Officers to exercise powers concurrently over the same area, persons, income or cases, with the lower-ranked officer following the higher-ranked one's directions.
What is the old-law equivalent of Section 241?
Section 241 broadly corresponds to Section 120 of the Income-tax Act, 1961, retaining the same jurisdictional architecture in simpler, restructured language.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 04 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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