Kitchen installations of a water heater are not prohibited by code. For as long as this water heater is properly installed (gas supply, venting, water connections, TPR valve, support / strapping if required in your area) and it has sufficient amount of combustion air provided. Everything has been explained in my articles under the Plumbing / Gas Water Heater
If you could take a few pictures of this installation (from a distance and close-ups of gas pipes, vent pipe, water pipes) and provide me with a BTU rating (on the manufacturers label attached to the WH) I should be able to tell you if everything has been correctly installed.
Let me know, thanks.