Income-tax assessment order location decides territorial jurisdiction for s.256(2) application; later record transfer ignored, petition dismissed.

Territorial jurisdiction to entertain an application under s. 256(2) of the Income-tax Act was determined by applying the doctrine of precedents and binding efficacy of law within territorial limits. The HC held that the competent HC is the one exercising jurisdiction over the situs of the Assessing Officer who passed the assessment order, preventing forum-shopping to secure a favourable contrary view. A later administrative transfer of certain assessment records under s. 127(1) for other years did not amount to a jurisdictional transfer under s. 120 and had no bearing on jurisdiction for the concluded year in question. The petition was dismissed for want of territorial jurisdiction, with liberty to approach the competent HC.

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Issues Involved:
Jurisdiction of High Court for hearing reference under section 256(2) of the Income-tax Act, 1961.

Summary:

Jurisdictional Objection Raised by Revenue:
The petition under section 256(2) of the Income-tax Act, 1961, was filed seeking mandamus to the Income-tax Appellate Tribunal, New Delhi, to draw up a statement of case and refer the questions for the opinion of the High Court. The Revenue raised a preliminary objection to the maintainability of the application, arguing that it should have been filed before the High Court of Bombay, the jurisdiction over the assessing authority at the relevant time.

Applicability of Delhi High Court's Jurisdiction:
The petitioner contended that since the appellate order was passed by the Tribunal at Delhi, the reference application filed in New Delhi was competent. Additionally, the jurisdiction of the High Court of Delhi was supported by an order transferring powers of the Assessing Officer to Delhi. However, the court referred to precedent cases and highlighted that the High Court having jurisdiction over the situs of the Assessing Officer should hear the reference.

Precedents and Binding Efficacy of High Court's Decisions:
Citing previous cases, the court emphasized that decisions of a High Court are binding only within its territorial jurisdiction. It noted that allowing an assessee to choose a High Court based on favorable laws would create anomalies. The court reiterated that the High Court with jurisdiction over the Assessing Officer's location should handle the reference.

Decision and Dismissal of the Petition:
The court dismissed the petition, stating that the High Court of Bombay, not Delhi, had jurisdiction over the matter. The transfer of assessment records from Bombay to Delhi for other years did not impact the jurisdictional competence of the High Court of Delhi for the present application under section 256(2) of the Act. The petitioner's right to approach the competent High Court for filing an appropriate application under section 256(2) was preserved.

This judgment clarifies the importance of territorial jurisdiction in determining the appropriate High Court for hearing references under the Income-tax Act, emphasizing the binding nature of decisions within a High Court's territorial limits.

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