Territorial jurisdiction of Tribunal benches and transfer procedure clarified; Delhi Bench restored appeals to decide them on merits

Delhi Bench's dismissal of appeals for lack of territorial jurisdiction was held improper because the Bench should have placed the matters before the President for transfer rather than directing fresh filing; the impugned orders dismissing the appeals were set aside and the matters restored to the Delhi Bench to be decided on merits. The Court noted the practice reduced Delhi pendency but shifted cases and burden to the Lucknow Bench and parties; appeals already instituted at Lucknow will be deferred pending final disposal by Delhi Bench, and Lucknow must close overlapping appeals after production of Delhi orders.

---

---

Issues: (i) Whether the Income Tax Appellate Tribunal, Delhi Bench was justified in dismissing transferred appeals and cross-objections on the ground of lack of territorial jurisdiction despite prior administrative transfer orders by the President of the Tribunal; (ii) Whether the decision in PCIT v. M/s ABC Papers Ltd. governs the present dispute about jurisdiction and transfer by administrative orders.

Issue (i): Whether the ITAT Delhi Bench could dismiss appeals transferred to it by the President of the Tribunal on the ground of lack of territorial jurisdiction instead of restoring or transferring them for adjudication.

Analysis: The appeals were earlier transferred by administrative orders of the President of the Tribunal to the Delhi Bench. The Delhi Bench recorded awareness of those transfer orders yet dismissed the appeals for lack of territorial jurisdiction, giving parties liberty to file fresh appeals. The matter was examined in light of the President's administrative powers under the Rules of 1963 and the mechanics for handling transferred matters by a Bench when territorial jurisdiction is questioned.

Conclusion: The dismissal of the transferred appeals by the Delhi Bench on the ground of territorial jurisdiction was unsustainable. The impugned orders are set aside and the matters are restored to the Delhi Bench of the Tribunal to be decided on merits; the Delhi Bench alone shall decide those appeals and corresponding matters filed at Lucknow shall remain deferred until decision by Delhi Bench.

Issue (ii): Whether the Supreme Court's decision in PCIT v. M/s ABC Papers Ltd. applies to bar the Delhi Bench from deciding transferred appeals or justifies dismissal for want of territorial jurisdiction.

Analysis: The precedent in PCIT v. M/s ABC Papers Ltd. addressed the forum for appeals under Section 260A where the supervisory High Court over the Assessing Officer was in question and did not concern administrative transfers by the President of the Tribunal. The facts and legal question in that case differ from matters involving administrative transfer under Section 127(2) and Rule 4, and therefore its principle is not directly applicable to justify dismissal of appeals already transferred by the President.

Conclusion: The PCIT v. M/s ABC Papers Ltd. decision does not validate dismissal of appeals transferred by the President; reliance upon it by the Delhi Bench was misplaced.

Final Conclusion: The impugned orders of the Tribunal dismissing the transferred appeals are set aside and the matters are restored to the Delhi Bench of the Tribunal for adjudication on merits; corresponding appeals pending at the Lucknow Bench shall be treated as deferred and may be closed upon production of final orders by the Delhi Bench.

Ratio Decidendi: An administrative transfer of appeals by the President of the Tribunal under the Rules and Section 127(2) cannot be nullified by a Bench of the Tribunal by dismissing transferred matters for territorial jurisdiction; transferred matters must be adjudicated by the receiving Bench or appropriately reassigned only through the President's administrative authority.

---