TaxTMI 
TaxTMI 
2021 (5) TMI 739
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....ears 2005-06 to 2008-09 as well as order dated 20.08.2020 passed by the President, Income Tax Appellate Tribunal and further seeks a direction that hearing of the above appeals be continued and concluded by the Income Tax Appellate Tribunal, Bangalore Bench. 3. By the order dated 19.03.2020, Bangalore Bench of the Income Tax Appellate Tribunal passed a speaking order expressing its views that request made by the revenue for transfer of the said appeals from the Bangalore Bench of the Income Tax Appellate Tribunal to Mumbai Benches of the Income Tax Appellate Tribunal is justified and to place the said views before the President to enable the President of the Income Tax Appellate Tribunal to pass orders on the request for transfer of the appeals from the Bangalore Bench to Mumbai Benches. By order dated 20.08.2020 President of Income Tax Appellate Tribunal directed that the above appeals pending in the Income Tax Appellate Tribunal, Bangalore Bench should be heard and determined by the Income Tax Appellate Tribunal, Mumbai Benches at Mumbai. 4. Facts leading to the above orders as pleaded may be briefly noted. 4.1. Petitioner is a company incorporated under the Companies Ac....
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....sessment years from 2005-06 to 2008-09, petitioner filed four separate appeals before the Commissioner of Income Tax (Appeals)-VI, Bangalore [briefly "the CIT(Appeals)" hereinafter]. All the four appeals were heard together and were disposed of by a common order dated 03.02.2011. In so far disallowance of deduction under section 10B of the Act is concerned, CIT(Appeals) upheld the decision of the Assessing Officer. Regarding disallowance of operational expenses and depreciation of aircraft to the extent of 50% by the Assessing Officer, the same was upheld for the assessment year 200506. However, for the remaining three assessment years certain reliefs were granted to the petitioner. In the result, the appeal for the assessment year 2005-06 was dismissed and the appeals for the assessment years 2006-07, 2007-08 and 2008-09 were partly allowed. 8. Aggrieved by the order dated 03.02.2011 passed by the CIT (Appeals), petitioner filed four appeals on 06.04.2011 before the Income Tax Appellate Tribunal, Bangalore Bench for the four assessment years which were registered as follows :- i) ITA No.371/B/2011 for the assessment year 2005-06. ii) ITA No.372/B/2....
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....te within three weeks. 12. It may be mentioned that Commissioner of Income Tax-1, Mumbai wrote to the Vice President of the Tribunal, Bangalore on 12.08.2013 stating that jurisdiction of the case of the petitioner is now with the DCIT-1(2)(2), Mumbai under Commissioner of Income Tax-1, Mumbai with effect from 30.08.2012 after decentralization of the case from Commissioner of Income Tax, Karnataka (Central), Bangalore to Mumbai. However, appellate proceedings were going on before the Bangalore Bench of the Tribunal. It was submitted that issue of multiplicity of jurisdiction of Mumbai and Bangalore may arise in the appellate proceedings before the Bangalore Bench of the Tribunal. Reference was made to a writ petition filed by the petitioner before this Court against recovery of demand. An apprehension was expressed that difficulties in compliance before Bangalore Bench of the Tribunal and before the High Court of Mumbai might be caused which could be avoided by transfer of appeal proceedings to the jurisdictional Tribunal Bench at Mumbai. Therefore, request was made that all the pending proceedings of appeal before the Tribunal, Bangalore Bench may be transferred to the Mumbai Be....
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....peals from Bangalore to Mumbai. Thus, Bangalore Bench of the Tribunal opined that plea of transfer raised by the revenue was not a serious one, rather it was a casual submission. While adjourning the hearing final opportunity was granted to the revenue to either drop the transfer plea or to make serious efforts. 16. It may be mentioned that petitioner had requested Bangalore Bench of the Tribunal to provide personal hearing before disposing of the transfer application. In this connection petitioner submitted objections dated 27.06.2019. Departmental representative filed written submissions on 12.12.2019 in support of the prayer for transfer of the appeals. 17. The matter was heard by the Bangalore Bench of the Tribunal on 20.02.2020. 18. On 11.09.2020 petitioner received a copy of the impugned order dated 20.08.2020 passed by the President of the Tribunal under rule 4 of the Income Tax Appellate Tribunal Rules, 1963 directing that the four subject appeals be transferred from the Bangalore Bench of the Tribunal to be heard and determined by the Mumbai Benches of the Tribunal at Mumbai. 19. Subsequently, when the petitioner sought for a copy of the order passed by the Ban....
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....Delay in hearing the appeals therefore cannot be attributed to the revenue. Finally, it is submitted that since petitioner had expressed no objection to transfer of assessment jurisdiction from Bangalore to Mumbai, the application for transfer of the appeals from Bangalore to Mumbai was a natural corollary to the transfer of assessment jurisdiction. 21.3. In the circumstances, it is submitted that the writ petition so filed is premature and should be dismissed. 22. Respondent No.2 i.e. Income Tax Appellate Tribunal (already referred to as "the Tribunal" hereinabove) has filed reply affidavit through the Assistant Registrar. Maintainability of the writ petition has been questioned on two grounds. Firstly, petitioner did not oppose transfer of jurisdiction under section 127 of the Act to Mumbai. Having not challenged such transfer of jurisdiction, it is now not open to the petitioner to oppose transfer of appeals by the Tribunal. Secondly, the writ petition seeks to challenge an administrative decision of the Tribunal which falls within the realm of subjective satisfaction. This cannot be challenged in a writ proceeding. 22.1. On merit, it is submitted that Commissioner of I....
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....as restored back to Mumbai. Since petitioner was all along assessed at Mumbai except for the period related to the search, it could not have any objection. Provisions of section 127 relating to transfer of assessment jurisdiction cannot be pressed into service to support transfer of pending appeals from one Bench of the Tribunal to another Bench. Section 127 has no application to transfer of appeals. Therefore, the contention in this regard made by the respondents is not only untenable but is also misleading. Petitioner has further stated that even an administrative order is subject to judicial scrutiny and must therefore conform to the requirements of law. 23.1. In so far convenience of parties is concerned, it is submitted that adjudication of the appeals in Bangalore would be more convenient to the petitioner because it is nearer to its mining units at Hospet, Karnataka. 23.2. In the circumstances, it is submitted that objection of the respondents have no legs to stand. There is merit in the writ petition filed by the petitioner which is accordingly liable to be allowed. 24. Mr. J. D. Mistri, learned senior counsel for the petitioner submits that the transfer applicatio....
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.... Tribunal in another State. Therefore, the impugned orders are without any authority of law and are as such liable to be set aside and quashed. 24.2. Mr. Mistri submits that the entire move for transfer of the pending appeals from Bangalore to Mumbai is for wholly extraneous considerations and not for the convenience of the parties. Impugned order of the President is in violation of the principles of natural justice; even it if is an administrative decision, principles of natural justice are required to be complied with. In support of his submissions, Mr. Mistri has relied upon the following decisions :- I) (AIR 1959 SC 308) Gullapalli Nageswara Rao Vs. Andhra Padesh State Road Transport Corporation. II) (AIR 1963 Cal 331) Ramchandra Jagdishchand Vs. Deputy Collector of Customs, Calcutta. II) [(1969) 2 SCC 262] A. K. Kraipak Vs. Union of India. 25. Mr. Desai, learned senior counsel appearing for respondent No.2 at the outset has referred to the prayer portion of the writ petition. He submits that the foundational order which is under challenge in the writ petition is dated 19.03.2020 passed by the Tribunal at Bangalore. Therefore, the writ petition ....
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....e of Madras. D) AIR 1971 SC 1093, Union of India Vs. Jyoti Prakash Mittal. E) AIR 1983 MP 65, Indore Textiles Limited Vs. Union of India. F) AIR 1990 SC 1744, Ossein and Gelatine Manufacturers' Association of India Vs. Mody Alkalies and Chemicals Ltd.. G) 2015 (320) ELT 3, Dharampal Satyapal Ltd. Vs. Dy. Commissioner of Central Excise. H) AIR 1959 SC 1376, Gulapalli Nageshwar Rao Vs. Andhra Pradesh State Road Transport Corporation. I) Civil Appeal No.3498 of 2020 decided on 16.10.2020, State of U.P. Vs. Sudhir Kumar Singh. 26. Mr. Suresh Kumar, learned standing counsel revenue appearing for respondent No.1 has adopted the arguments of Mr. Desai, learned senior counsel for respondent No.2. Mr. Suresh Kumar argued against maintainability of the writ petition on the ground that when the petitioner did not object to transfer of jurisdiction under section 127 of the Act, he cannot object to or challenge transfer of appeals from one Bench of the Tribunal to another Bench. 27. In his reply, Mr. Mistri, learned senior counsel for the petitioner submits that contention of Mr. Desai that the writ petition should have been filed befo....
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.... parties had argued at length before the Bangalore Bench of the Tribunal. The matter was kept as part heard for further hearing. In the course of the hearing, departmental representative had filed written submissions on 28.06.2011. However, in view of the transfer of the accountant member to Ahmedabad Bench, the four appeals were released from part heard on 08.09.2011. It is true that Karnataka High Court in the case of C. Ramaiah Reddy (supra) has held that in the absence of satisfaction note, the related search under section 132 of the Act becomes invalid. This point was raised on behalf of the petitioner before the Bangalore Bench of the Tribunal as early as on 21.11.2012. In that context, Bangalore Bench of the Tribunal in its order dated 11.02.2013 had directed the departmental representative to produce the satisfaction note for initiating search under section 132 of the Act before the Tribunal. It is also true that satisfaction note has not been produced before the Tribunal till passing of the impugned order dated 19.03.2020. Though from the order-sheet dated 29.07.2013, we find that the departmental representative had prayed for transferring the appeals from Bangalore to Mum....
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....ers by a speaking order. 32. Let us now examine the order dated 19.03.2020 passed by the Bangalore Bench of the Tribunal. Relevant portion of the order reads as under :- "7. The revenue through the Principal Commissioner of Income Tax-1, Mumbai through letter dated 25.4.2019 applied for transfer of the appeals to ITAT Mumbai Benches from ITAT Bangalore Benches. The Assessee had addressed letter dated 27.06.2019 raising objections from the request for such transfer. The Hon'ble President vide his directions dated 22.10.2019 has directed the Bench to deal with the objections by speaking order and obtain its view in the matter and communicate the same to the Head Office. * * * * * 11. We have given a careful consideration to the rival submissions. With regard to objection of the Assessee based on Rule 4(2) of the ITAT Rules and Rule 34 of the Office Manual, we are of the view that the said objections are without any merit. In terms of Sec.255(1) of the Act, the powers and functions of the Appellate Tribunal are exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof. Sec.255(5) of the Act p....
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....e such directions have to be necessarily complied with by the revenue in view of the decision of the Hon'ble Karnataka High Court which is the Jurisdictional High Court in the case of the Assessee, the revenue with a view to avoid complying with the directions of the Tribunal is seeking transfer of the appeals from ITAT Bangalore Benches to ITAT Mumbai Benches, so that it can take advantage of decisions of certain High Courts taking a view contrary to the decision rendered in the case of Ramaiah Reddy (supra) regarding the power of the Tribunal to examine the validity of issue of warrant of search u/s.132 of the Act. This argument is without any merit as the ITAT Benches will deal with the same in accordance with law and the apprehension of the Assessee in this regard is baseless. 13. We have accordingly dealt with the objections of the Assessee by way of this speaking order and as directed by the Hon'ble President, place our views in the matter to enable the Hon'ble President to pass orders on the request for transfer of appeals from Bangalore Benches to Mumbai Benches." 33. From a careful scrutiny of the reasons given by the Bangalore Bench of the Tribunal, it is seen....
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....l may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof. (2) Subject to the provisions contained in sub-section (3), a Bench shall consist of one judicial member and one accountant member. (3) The President or any other member of the Appellate Tribunal authorised in this behalf by the Central Government may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member and which pertains to an assessee whose total income as computed by the Assessing Officer in the case does not exceed fifty lakh rupees, and the President may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member. (4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on su....
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....nt State can be said to be traceable to this provision. What sub section (5) says is that the Tribunal shall have power to regular its own procedure and that of its various Benches while exercising its powers or in the discharge of its functions. This includes notifying the places at which the Benches shall hold their sittings e.g., a particular Bench at Mumbai may hold its sittings at, say, Thane for a particular period for administrative reasons. This provision cannot be interpreted in such a broad manner to clothe the President of the Tribunal the jurisdiction to transfer a pending appeal from one Bench to another Bench outside the headquarters in another State. 38. We have also noticed from sub section (6) that a proceeding before the Tribunal shall be deemed to a judicial proceeding within the meaning of sections 193, 196 and 228 of the Indian Penal Code and it shall also be deemed to be a civil court for the purpose of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898. Therefore, there is no manner of doubt that a proceeding before the Tribunal is a judicial proceeding and for certain limited purpose it is deemed to be a civil court. Question for conside....
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....here are two or more Benches of the Tribunal working at any headquarters, the President or, in his absence, the senior Vice President or Vice President of the concerned zone or in his absence the senior-most member of the station present at the headquarters may transfer an appeal or an application from any one of such Benches to any other. While sub rule (1) empowers the President to direct hearing of appeals by a Bench by a general or special order, sub rule (2) is more specific. It deals with a situation where there are more than two Benches of the Tribunal at any headquarter; when there are multiple Benches in a headquarter, the President or, in his absence the senior Vice President etc. may transfer an appeal or an application from one of such Benches to any other. Meaning thereby that it is a transfer of an appeal or an application from one Bench to another Bench within the same headquarters. For example, in Mumbai the number of Benches is twelve and in Bangalore, the number of Benches is three. Thus, this provision can be invoked to transfer an appeal from one Bench in Mumbai to another Bench in Mumbai or from one Bench in Bangalore to another Bench in Bangalore. But this pro....
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....le-2(1), Bangalore, the Assessing Officer. 45. Because of search and seizure action under section 132 of the Act against the petitioner in connection with the mining operations at Hospet in the State of Karnataka consequential assessment proceedings were initiated for the assessment years 2005-06, 2006-07, 2007-08 and 2008-09. In so far the first three assessment years are concerned, the assessment orders were passed under section 153A of the Act read with 143(3) thereof. For the last assessment year i.e. 2008-09, the assessment order was made under section 143(3). Following centralization of the cases at Bangalore, the assessments were carried out at Bangalore and in all the assessment orders the Assessing Officer was Assistant Commissioner of Income Tax, Central Circle-2(1), Bangalore. As we have already seen, the first appeals against the assessment orders were preferred before CIT-A at Bangalore whereafter the appeals were filed before the Tribunal at Bangalore and rightly so because the Assessing Officer i.e., the respondent was from Bangalore. 46. Though provisions of the Civil Procedure Code, 1908 may not be applicable to the Act as well as to proceedings before the Tr....
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.... rightly filed. Ordinarily if a court has jurisdiction to hear a case, the case ought to proceed in that court only. This principle can certainly be extended to appeals before the Tribunal. In such circumstances transfer cannot be forced upon the appellant i.e. the petitioner against its express objection. 49. It is also a settled proposition that convenience of a party in a case can hardly be a criteria for transferring a case out of a State. [Please see judgment and order dated 07.05.2021 passed by the Supreme Court in Transfer Petition (Criminal) No.17 of 2021, Rajkumar Sabu -Vs- M/s. Sabu Trade Pvt. Ltd.]. Plea that records were transferred from Bangalore to Mumbai and that it would be convenient for the revenue if the appeals are heard at Mumbai cannot be a valid ground for transfer. Cases are transferred to serve the ends of justice and justice must not only be done but must be seen to have been done, that too, from the perspective of the litigant. 50. In the order dated 19.03.2020 Bangalore Bench of the Tribunal noted in paragraph 11 that the power to transfer of the appeal can be exercised by the Tribunal at the request of either party to the proceedings before it, be....
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.... Assessing Officer subject to compliance of the conditions mentioned therein, principles governing the same cannot be read into transfer of appeals from one Bench of the Tribunal to another Bench that too in a different State / Zone, for the simple reason that it is not a case before any Assessing Officer. Petitioner may have expressed no objection to transfer of assessment jurisdiction from the Assessing Officer at Bangalore to the Assessing Officer at Mumbai after assessment for the assessment years covered by the search period, but that cannot be used to non-suit the petitioner in his challenge to transfer of appeals from one Bench of the Tribunal to another Bench in a different State and in a different Zone. The two are altogether different and have no nexus with each other. So, the preliminary objection raised on behalf of the respondents on this count has to fail. 52. The other preliminary objection raised by the respondents, more particularly by Mr. Desai, learned senior counsel for respondent No.2 that firstly, the writ petition should have been filed before the Karnataka High Court and secondly an appeal under section 260A of the Act ought to have been filed instead of ....