2018 (5) TMI 1008 - AT - Income Tax

Tribunal assigns jurisdiction to Delhi bench, extends stay on tax demands.

The Tribunal determined that the jurisdiction for hearing the appeals lies with the bench having jurisdiction over the current Assessing Officer, which in ... Stay on collection/recovery seeked - correct jurisdiction of hearing these appeals - Held that:- Assessing Officer having jurisdiction to assess the income of the assessee is located in New Delhi, which falls in jurisdiction of Delhi benches, we find that the jurisdiction for hearing of these applications, and hearing of the related appeals, vests in Delhi benches of this Tribunal. However, it is for the Hon’ble President to take a final call on the issue, as is the unambiguous thrust of Rule 4(1) of the ITAT Rules. We, therefore, deem it fit and proper to direct the Registry to place all stay applications and related appeals, as indeed all other appeals of this assessee, before Hon’ble President for appropriate orders. In order to ensure, however, that these applications are not rendered infructuous or nugatory by recovery of the impugned outstanding tax demands in the meantime, we also take on record the categorical assurance so graciously extended by the learned Departmental Representative, not to take any coercive measures for recovery or collection of the outstanding disputed demands till the time the present stay applications are disposed of by the Tribunal. Issues Involved:1. Jurisdiction of the ITAT bench to hear the appeals.2. Extension of stay on collection/recovery of outstanding tax demands.Issue-wise Detailed Analysis:1. Jurisdiction of the ITAT Bench to Hear the Appeals:The primary issue in this case revolves around determining the appropriate jurisdiction for hearing the appeals filed by the assessee. The assessee's office was initially located in Surat, leading to the appeals being moved to the Surat bench. However, the CIT(A) passing the impugned orders was located in Ahmedabad, creating a jurisdictional ambiguity. The legal position, as clarified by the Tribunal, is that jurisdiction is determined by the location of the Assessing Officer at the time the Tribunal is to 'hear and determine such appeals and applications.' This is supported by the notification under rule 4(1) of the Income Tax Appellate Tribunal Rules 1963, which states, 'The ordinary jurisdiction of the bench will be determined not by the place of business or residence of the assessee but by the location of the Assessing Officer.'The Tribunal further elaborated that the jurisdiction of the bench changes with the transfer of the Assessing Officer's jurisdiction. The Tribunal relied on the precedent set by the Hon’ble Delhi High Court in the case of CIT Vs Aar Bee Industries, which held that 'there can be only one Assessing Officer in respect of a case,' and the jurisdiction is determined by the location of the current Assessing Officer. Consequently, the Tribunal concluded that the jurisdiction for hearing these appeals vests with the Delhi benches, as the current Assessing Officer is located in New Delhi.2. Extension of Stay on Collection/Recovery of Outstanding Tax Demands:The assessee sought an extension of the stay on the collection/recovery of Rs. 187.30 crores plus interest, arguing that the delay in disposing of the appeals was due to factors beyond their control. The Tribunal noted that the appeals had been delayed despite the assessee's cooperation and that there was no material change in the facts and circumstances to disentitle the assessee to further stay. The Departmental Representative did not oppose the stay extension, acknowledging that no recovery action had been initiated.Given these circumstances, the Tribunal directed that no coercive measures for recovery or collection of the outstanding disputed demands should be taken until the stay applications are disposed of by the Tribunal. The Tribunal also scheduled the stay applications for hearing on 25th May 2018 and directed the Registry to place all stay applications and related appeals before the Hon’ble President for appropriate orders.Conclusion:In summary, the Tribunal clarified that the jurisdiction for hearing the appeals lies with the bench having jurisdiction over the current Assessing Officer, which in this case is the Delhi benches. The Tribunal also extended the stay on the collection/recovery of the outstanding tax demands until the stay applications are disposed of, ensuring no coercive measures are taken in the meantime. The matter was referred to the Hon’ble President for final determination of jurisdiction.