TaxTMI 
TaxTMI 
2025 (10) TMI 1365
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....isfied with the assessment order, assessee carried the matter in appeal before the ld. CIT (Appeals) in Varanasi. The ld. CIT (Appeals) decided the appeal in Varanasi vide order dated 23.09.2020. 3. Dissatisfied with the order of ld. CIT (Appeals), Revenue filed an appeal before ITAT bearing ITA No. 135/VNS/2020. On receipt of notice, in the Revenue's appeal, assessee has filed Cross Objections bearing No.04/VNS/2021. The appeal and Cross Objections were heard by the Division Bench on 08.02.2023, however, there was a difference of opinion amongst the Hon'ble Members constituting the Division Bench, hence both the Hon'ble Members have independently framed the questions on difference of opinion. The Hon'ble President has appointed me as a Third Member to resolve the questions. The questions referred by the ld. Judicial Member read as under : 1. Whether in the facts and circumstances of the case, the Varanasi, Circuit Bench of the Tribunal having no jurisdiction to hear and determine the appeal and CO arising from the impugned assessment order passed by ITO, Ward 5(2), Kolkata can go into the question of validity of the impugned orders i.e. assessment order and....
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....f the case, whether the appellate order passed by Id. CIT(A), Varanasi is sustainable in the eyes of law, keeping in view that the said appellate order was passed in violation of Section 250(1) and 250(2) of the 1961 Act as well in violation of Rule 46A of the Income-tax Rules, 1962? 7. Whether on facts and circumstances of the case, is it fair and appropriate on the part of ITAT, Circuit Bench, Varanasi, to give any findings on the merits of the issues involved in this appeal more so when the appellate order passed by Id. CIT(A) is suffering from incurable defect of being in violation of Section 250(1) and 250(2) of the 1961 Act as well in violation of Rule 46A of the Income-tax Rules, 1962, or not ? 4. The ld. counsel for the assessee has filed detailed written submissions. He has also relied upon a large number of decisions which are placed in a Paper Book running into 74 pages. 5. With the assistance of the ld. Representative, I have gone through the record carefully. The first question framed by the Hon'ble Judicial Member is that assessment order was framed by ITO, Ward 5(2), Kolkata and therefore, territorial jurisdiction of appellate authority over such a....
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....elates to Income Tax Authorities. In the same chapter, Section 116 enlists the Income Tax Authorities and Section 120 specifies the jurisdiction of such Authorities. While Section 124 specifically speaks of the jurisdiction of Assessing Officers, Section 127 enables a higher authority to transfer a 'case' from one Assessing Officer to another Assessing Officer. All these provisions in Chapter XIII only relate to the executive or administrative powers of Income Tax Authorities. We have no hesitation in our mind that the vesting of appellate jurisdiction has no bearing on judicial remedies provided in Chapter XX of the Act before the ITAT and the High Court. The mistake committed by the High Court was in assuming that the expression "case" in the Explanation to Sub- Section 4 of Section 127 has an overarching effect and would include the proceedings pending before the ITAT as well as a High Court. This fundamental error has led the Division Bench of the High Court of Delhi to come to a conclusion that an order of transfer made under Section 127 would have the effect of transferring the case "lock, stock and barrel" not only from the jurisdiction of the ITAT, but also from tha....
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....g High Court, the entire files relating to the case should now be in the possession and custody of the new Assessing Officer. It could be argued that the Assessing Officer who exercised the jurisdiction before its transfer will not be in a position to assist the High Court, further, he cannot implement the decision of that High Court, after it decides the question of law as he is no more the Assessing Officer. We will now proceed to deal with these arguments. 29. The binding nature of decisions of an appellate court established under a statute on subordinate courts and tribunals within the territorial jurisdiction of the State, is a larger principle involving consistency, certainty and judicial discipline, and it has a direct bearing on the rule of law. This 'need for order' and consistency in decision making must inform our interpretation of judicial remedies. An important reason adopted in the case of Seth Banarasi Dass Gupta, further highlighted by Justice Lahoti in Suresh Desai, is that a decision of a High Court is binding on subordinate courts as well as tribunals operating within its territorial jurisdiction. It is for this very reason that the Assessing Off....
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.... the intervention of a Court of law is against the independence of judiciary. This is true, particularly, when such a transfer can occur in exercise of pure executive power. This is a yet another reason for rejecting the interpretation adopted in the case of Sahara. 32. For the reasons stated above, we hold that the decision of the High Court of Delhi in Sahara and Aar Bee do not lay down the correct law and therefore, we overrule these judgments. 33. In conclusion, we hold that appeals against every decision of the ITAT shall lie only before the High Court within whose jurisdiction the Assessing Officer who passed the assessment order is situated. Even if the case or cases of an assessee are transferred in exercise of power under Section 127 of the Act, the High Court within whose jurisdiction the Assessing Officer has passed the order, shall continue to exercise the jurisdiction of appeal. This principle is applicable even if the transfer is under Section 127 for the same assessment year(s). 34. We will now deal with the decisions of certain High Court which have taken a view that the jurisdiction of the High Court must be based on the location of the I....
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....l to hear and determine such appeal and application made under the Act, are as per the standing order amended from time to time till date. It has been directed vide standing order that subject to any special order all appeals and applications from the District, States, Union Territory specified thereunder shall with effect from 1st October 1997, be heard and determined by the benches specified in colum no.2 of the table. At serial no.6 of the said table the Kolkata Benches of the ITAT has powers and jurisdiction to hear and determine the appeals from state of West Bangal, Sikkim and Union Territory of Andaman and Nicobar Islands. There is no dispute that ITO, Ward 5(2) Kolkata falls under the territorial jurisdiction of ITAT, Kolkata Benches and therefore, the ITAT, Kolkata Benches have the jurisdiction to hear and determine the appeal arising from the impugned assessment order. In absence of any special order the ITAT, circuit Bench Varanasi has no jurisdiction to hear and determine the appeal arising from impugned assessment order passed by ITO, Ward 5(2), Kolkata. Once, it is found and held that the jurisdiction to hear and determine the appeal arising from the impugned assessme....
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....he first appeal by assessee before Id. CIT(A) shall be condoned by jurisdictional Id. CIT(A), Kolkatta, as in our considered view the assessee had under bonafide belief filed and pursuing first appeal with Id. CIT(A), Varanasi, owing to change in the Registered Office from State of West Bengal to State of Uttar Pradesh. Filing of legal proceedings at the correct forum having jurisdiction is the fundamental and cardinal principle and back bone of robust judicial delivery system. Reference is drawn to the decision of Hon'ble! Supreme Court in the case of PCIT v. ABC Papers Limited, reported in (2022) 141 taxmann.com 332(SC). The second appeal from the appellate order passed by jurisdictional CIT(A), Kolkatta shall lie with ITAT, Kolkatta Benches, Kolkatta, and an appeal u/s 260A from the appellate order to be passed by ITAT, Kolkatta Benches, Kolkatta shall lie with Hon'ble High Court of Calcutta. So far as merit of the additions are concerned, for the sake of completeness, we have observed that the assessee did not file any reply before the AO during assessment proceedings to various queries raised by the ITO, Ward 5(2), Kolkatta, as the assessee never participated in assess....
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.... plea could only be entertained by ITAT, Kolkata and only ITAT Kolkata could decide whether impugned order of the CIT (Appeals), Varanasi is valid or without jurisdiction. Once ITAT, Varanasi does not have a jurisdiction to entertain the issue, then nothing could be adjudicated. Similar situation has been faced by ITAT Varanasi on an earlier occasion when ITA No.386/All/2014 has come up for hearing. The Bench found that territorial jurisdiction of the Tribunal over the assessee in the case of ACIT Vs M/s Motiwala Industries Ltd. lies in Delhi, hence the Bench has dismissed the appeal with a liberty to the Revenue to prefer a fresh appeal before Delhi Benches, if advised so. I would like to take note of this order of the Division Bench dated 26.09.2023 wherein identical issue is involved. The relevant part of the discussion in ITA No.386/All/2014 is as under : 3. In the meantime, a technical issue was noticed by the Tribunal, i.e., the co-ordinate bench, vide its interim order dated 12-01-2023, had expressed the view that the correct jurisdiction to deal with this appeal would be with Delhi benches of ITAT, since the assessing officer located in Delhi has passed the order. ....
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.... the appeal of the revenue on this technical ground. However, the revenue may prefer a fresh appeal before the Delhi benches along with the petition for condoning the delay citing the reasons for the delay in filing before the Delhi benches, if so advised. 8. In the result, the appeal filed by the revenue is dismissed. 9. Order pronounced in the open court on 26.09.2023. Sd/- (AMIT SHUKLA) JUDICIAL MEMBER Sd/- (B.R.BASKARAN) ACCOUNTANT MEMBER Dated 26th September, 2023. 8. In view of the above discussion, I find that after the judgement of Hon'ble Supreme Court in the case of PCIT Vs ABC Papers Limited in Civil Appeal No.4252 of 2022, the appellate jurisdiction shall be determined on the basis of location of the ld. AO who has passed the assessment order. The ITAT, Varanasi does not have jurisdiction because assessment order was passed by ITAT, Kolkata. Therefore, the present appeal is not maintainable in the present form. It deserves to be dismissed. The parties will be at liberty to avail the appropriate remedies, as per law. 9. It is also important to note that the ld. AM also concur this view but only obse....