2023 (4) TMI 1181 - SCH - Income Tax

Supreme Court rules on ITAT appeal venue, transfer power clarified

PRINCIPAL COMMISSIONER OF INCOME TAX 1 MUMBAI & ANR. Versus MSPL LIMITED THROUGH ITS MANAGING DIRECTOR

The Supreme Court upheld the High Court's decision in favor of the Assessee, ruling that appeals against decisions of the ITAT should be filed in the High ... Centralization of the cases - Transfer of case from one tribunal to another i.e from ITAT Bangalore to ITAT Mumbai - Transfer of cases u/s 127 - High Court has allowed the said writ petition preferred by the Assessee and has quashed and set aside the order passed by the President of the ITAT transferring four appeals from Bangalore Bench to Mumbai Bench, which was passed in exercise of powers under Rule 4 of the Income Tax Appellate Rules - HELD THAT:- As it cannot be said that the High Court has committed any error in setting aside the order passed by the President of the ITAT transferring the appeals from the Bangalore Bench to the Mumbai Bench. We are in complete agreement with the view taken by the High court. Therefore, now the appeals will be heard by the ITAT, Bangalore Bench. The present Special Leave Petition deserves to be dismissed and is accordingly dismissed. As observed that the other issues including the powers of the President under Section 255 read with Income Tax Appellate Rules are kept open to be considered in an appropriate proceedings. Issues involved: The issue involves the jurisdiction of the High Court for filing an appeal against an order of the ITAT exercising jurisdiction over more than one state. The High Court of Bombay allowed the writ petition by the Assessee, quashing the order transferring appeals from Bangalore Bench to Mumbai Bench. The Revenue challenged this decision through a Special Leave Petition before the Supreme Court.Judgment Summary:Jurisdiction of High Court: The Supreme Court referred to the decision in Principal Commissioner of Income Tax-I, Chandigarh Vs. ABC Papers Limited, highlighting that the jurisdiction of the High Court for an appeal against the decision of the ITAT should be based on the location of the Assessing Officer. In this case, where the Assessing Officer and the CITA passed orders in Bangalore, the appeal should lie before the ITAT, Bangalore. The Revenue did not dispute these factual aspects.Precedent and Interpretation: The Court cited paragraphs 24, 25, 42, and 45 of the judgment in the ABC Papers Limited case. It emphasized that the High Court within whose jurisdiction the Assessing Officer is located should hear the appeal. The power of transfer under Section 127 pertains to Income Tax Authorities and not the ITAT or the High Court. The Court held that appeals against decisions of the ITAT shall lie before the High Court where the Assessing Officer who passed the assessment order is situated.Decision and Dismissal: The Supreme Court agreed with the High Court's decision to set aside the order transferring appeals from Bangalore Bench to Mumbai Bench. The appeals will now be heard by the ITAT, Bangalore Bench. The Special Leave Petition was dismissed, keeping open the consideration of other issues regarding the powers of the President under Section 255 read with Income Tax Appellate Rules for future proceedings. Pending applications were disposed of accordingly.