ITAT dismisses appeals for lack of jurisdiction under territorial rules; allows refiling before proper Bench

The ITAT Panaji Bench held that it lacks jurisdiction over the appeals since the assessing officer's office is located in Hubli, Karnataka, outside Panaji Bench's territorial jurisdiction. Consequently, the appeals were dismissed as not maintainable. The appellant was granted leave to file the appeals before the appropriate Tribunal Bench having jurisdiction over the assessing officer's area.

---

---

1. ISSUES PRESENTED and CONSIDERED

• Whether the Income Tax Appellate Tribunal (ITAT) Panaji Bench has territorial jurisdiction to entertain appeals where the assessing officer (AO) who passed the original assessment orders is situated outside the territorial jurisdiction of the Panaji Bench.
• The legal effect of the situs of the assessing officer on the maintainability of appeals before a particular ITAT Bench.
• The applicability of standing orders issued by the ITAT and relevant Supreme Court precedent concerning jurisdictional issues.
• Whether administrative orders under section 127 of the Income Tax Act can confer jurisdiction to an ITAT Bench outside the AO's territorial jurisdiction.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Jurisdiction of ITAT Bench based on situs of Assessing Officer

Relevant Legal Framework and Precedents:

The territorial jurisdiction of ITAT Benches is governed by the Income Tax Appellate Tribunal Rules, 1963, and standing orders issued under those rules, particularly Standing Order dated 01/10/1997 and amendments thereof. Explanation 4 to the Standing Order under Rule 4(1) prescribes that the ordinary jurisdiction of the Tribunal is determined by the location of the Jurisdictional Assessing Officer.

The Supreme Court in the case of 'PCIT Vs ABC Papers Ltd.' held that the situs of the assessing officer is the sole decisive factor for determining the jurisdiction of the appellate forum, irrespective of any administrative orders passed under section 127 of the Income Tax Act relating to transfer of cases.

Court's Interpretation and Reasoning:

The Tribunal emphasized that although some benches exercise jurisdiction over multiple states, the fundamental principle remains that jurisdiction is territorially linked to the location of the AO who passed the assessment order. The Supreme Court's ruling firmly settled that the situs of the AO cannot be overridden by administrative transfer orders for jurisdictional purposes.

The Tribunal also noted amendments to the territorial jurisdiction of the Panaji Bench by the Hon'ble President of ITAT, which confined the Panaji Bench's jurisdiction to the State of Goa, Belgaum District, and Karwar Taluka of Uttara Kannada District of Karnataka State. The AO in the present appeals was situated in Hubli city of Dharwad District, Karnataka State, which lies outside the Panaji Bench's territorial jurisdiction.

Key Evidence and Findings:

The AO who framed the original assessments was located in Hubli city, Dharwad District, Karnataka, which is not within the Panaji Bench's jurisdiction as per the standing orders and amendments.

The appellants did not contest or provide any evidence to challenge the jurisdictional claim of the Revenue or the standing orders relied upon.

Application of Law to Facts:

Since the AO's situs is outside the Panaji Bench's territorial jurisdiction, the appeals before the Panaji Bench are not maintainable. The Tribunal cannot entertain appeals where the AO is located outside its jurisdiction, regardless of any administrative transfers of cases.

Treatment of Competing Arguments:

The Revenue argued for dismissal based on lack of jurisdiction, relying on standing orders and Supreme Court precedent. The appellants did not appear or contest the jurisdictional issue, effectively conceding the point.

Conclusions:

The Tribunal concluded that the Panaji Bench lacks jurisdiction to entertain the appeals because the AO's office is situated outside its territorial jurisdiction. Consequently, the appeals are dismissed as not maintainable with liberty to file before the appropriate ITAT Bench having jurisdiction over the AO's location.

Issue 2: Effect of Administrative Transfer Orders under Section 127 on Jurisdiction

Relevant Legal Framework and Precedents:

Section 127 of the Income Tax Act allows for administrative transfer of cases between officers. However, the Supreme Court in 'PCIT Vs ABC Papers Ltd.' clarified that such administrative transfer orders do not affect the jurisdiction of the appellate forum, which is determined solely by the situs of the AO.

Court's Interpretation and Reasoning:

The Tribunal reiterated that administrative orders under section 127 cannot confer jurisdiction to an ITAT Bench outside the AO's territorial jurisdiction. The jurisdictional principle is strictly territorial and not subject to administrative reassignments.

Key Evidence and Findings:

The Revenue relied on standing orders and Supreme Court precedent to assert that administrative transfers do not alter the jurisdictional seat of the AO for appellate purposes. No contrary material was placed before the Tribunal.

Application of Law to Facts:

The Tribunal applied the Supreme Court's ruling to the facts, holding that even if the cases had been administratively transferred, the jurisdiction of the Panaji Bench does not extend to assessments made by an AO located outside its territorial limits.

Treatment of Competing Arguments:

No opposing arguments or evidence were presented by the appellants to challenge this principle.

Conclusions:

Administrative transfer of cases under section 127 does not affect the territorial jurisdiction of the ITAT. The Panaji Bench cannot assume jurisdiction over cases assessed by an AO located outside its territorial jurisdiction, notwithstanding any such transfers.

Issue 3: Maintainability of Appeals Before ITAT in Absence of Appellants

Relevant Legal Framework and Precedents:

Rule 24 of the ITAT Rules, 1963 permits disposal of appeals ex-parte in the absence of the appellant after due notice.

Court's Interpretation and Reasoning:

The Tribunal noted that the appeals were called twice and no one appeared on behalf of the appellants. On the Revenue's request, the Tribunal proceeded to hear and dispose of the appeals ex-parte.

Key Evidence and Findings:

The absence of appellants was recorded, and the Tribunal relied on the Revenue's submissions and the record to decide the jurisdictional issue.

Application of Law to Facts:

The Tribunal correctly exercised its power under Rule 24 to proceed ex-parte and dismiss the appeals on jurisdictional grounds.

Treatment of Competing Arguments:

No arguments were presented by the appellants due to their non-appearance.

Conclusions:

The appeals were validly disposed of ex-parte due to non-appearance of appellants, without prejudice to their right to approach the appropriate ITAT Bench.

---