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Section 242 Income Tax Act 2025: How Can You Challenge Assessing Officer Jurisdiction?

Section 242 explains which Assessing Officer (AO) may assess a taxpayer, how jurisdiction disputes are resolved and the strict time limits for raising an objection.

Current law: The Income-tax Act, 2025 came into force on 1 April 2026. Section 242 is titled "Jurisdiction of Assessing Officers" and broadly corresponds to Section 124 of the Income-tax Act, 1961. For earlier tax years, applicable transitional provisions must also be checked.
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What does Section 242 regulate?

Section 242 governs the territorial jurisdiction of Assessing Officers acting under directions or orders issued under Section 241(1), (2) or (3). It distinguishes taxpayers carrying on business or profession from other persons, prescribes the authority that resolves jurisdiction disputes and restricts the period during which a taxpayer may question jurisdiction.

Section 242 explained: Subsections (1) to (6)

Section 242(1): Business location or residence

Where an AO has been assigned an area under Section 241, the AO has jurisdiction over a person carrying on business or profession in that area. If the business or profession operates from more than one location, the principal place of business or profession determines this territorial connection. For a person not carrying on business or profession, residence within the assigned area is the relevant criterion.

Section 242(2): Who decides a jurisdiction dispute?

When a question arises about whether an AO has jurisdiction to assess a person, the specified income-tax authority determines the question. The taxpayer does not decide jurisdiction merely by selecting a preferred office.

Section 242(3): Disputes involving different areas

Where different specified income-tax authorities are concerned, they determine the jurisdiction question together. If they disagree, the Board or another specified income-tax authority notified by the Board determines it.

Section 242(4): When is it too late to object?

Section 242(4) imposes separate cut-offs depending on whether a return was filed, no return was filed, or action was taken under Sections 247 or 248. The earliest applicable statutory event controls; an objection should therefore be made promptly.

Section 242(5): Reference before assessment

Where a taxpayer raises a jurisdiction objection within the permitted time and the AO does not accept it, the AO must refer the question for determination under subsection (2) or (3) before making the assessment.

Section 242(6): Powers concerning income within the area

Despite the other provisions of Section 242 or directions under Section 241, an AO has the statutory powers of an AO in respect of income accruing, arising or received within the area assigned to that AO under Section 241(1), (2) or (3).

What are the time limits to challenge AO jurisdiction?

Important: The following deadlines concern objections under Section 242(4). The facts, notice type, date of service and stage of assessment should be verified before filing.
  • Return filed under Section 263(1): Objection cannot be raised after one month from service of notice under Section 268(1) or 270(8), or completion of assessment, whichever is earlier.
  • No return filed: Objection cannot be raised after expiry of the time allowed in a notice under Section 268(1) or 280(2) for filing the return, or in a notice under Section 271(2) to show cause against best judgment assessment, whichever is earlier.
  • Action under Section 247 or 248: Objection cannot be raised after one month from service of notice under Section 294(1)(a), or completion of assessment, whichever is earlier.

These are statutory limits for questioning jurisdiction under this section. Whether a separate legal defect can be challenged on another ground depends on the facts and applicable law.

Relevant statutory definitions

Assessing Officer - Section 2(12): Includes specified income-tax officers vested with relevant jurisdiction under Section 241 or another provision, and designated senior officers directed under Section 241(5)(b) to exercise AO powers.
Assessee - Section 2(11): Includes persons liable to pay tax or another sum under the Act, persons subject to relevant assessment or refund proceedings and persons deemed to be assessees or assessees in default.
Board - Section 2(18): The Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963.
Business - Section 2(20): Includes trade, commerce, manufacture and an adventure or concern in the nature of trade, commerce or manufacture.
Specified income-tax authority: The authority identified under the applicable statutory framework and jurisdictional directions for deciding questions under Section 242; the relevant notification or order should be checked in each case.

Practical examples

Example 1: Multiple business locations

A taxpayer runs offices in Delhi and Jaipur but has the principal place of business in Delhi. Subject to the applicable jurisdiction orders, the location of that principal place is relevant under Section 242(1)(a).

Example 2: Individual without a business

A salaried individual resides in Pune and does not carry on a business or profession. The individual's residence is the relevant territorial factor under Section 242(1)(b), subject to the applicable assignment of jurisdiction.

Example 3: Objection after receiving notice

A taxpayer who filed a return receives a notice under Section 268(1). The taxpayer should check the date of service immediately: the jurisdiction objection window under Section 242(4)(a) ends at the earlier of one month after service or completion of assessment.

How should a taxpayer raise a jurisdiction objection?

Identify the AO named in the notice, obtain the relevant jurisdictional order where available, state the taxpayer's residence or principal place of business with supporting documents, and submit a reasoned written objection before the statutory deadline. Retain the filing acknowledgement. If the AO disagrees with a timely objection, Section 242(5) requires a reference to the appropriate authority before assessment.

Frequently asked questions

Can an Assessing Officer assess someone outside the officer's assigned area?

The answer depends on the applicable Section 241 orders and the specific statutory powers. Section 242(6) also preserves powers concerning income accruing, arising or received within the AO's assigned area.

Does the taxpayer's permanent address always determine jurisdiction?

No. Section 242(1) uses the business or principal business location for persons carrying on business or profession, and residence for other persons.

Can I object after assessment is completed?

Section 242(4) bars a jurisdiction objection under that provision after the applicable deadline, which may occur even before assessment is completed. Any other available legal remedy requires separate examination.

Who decides if two income-tax authorities disagree?

Under Section 242(3), the Board or the authority it notifies determines the matter if the concerned specified income-tax authorities do not agree.

Official law and related provisions

Official Income-tax Act 2025 PDFIncome Tax e-Filing PortalSection 241: Jurisdiction of authorities

Updated: 11 November 2026. This article is general legal information; the applicable statutory text, notifications and individual case facts prevail.