DCIT Vs K.K. Patel Finance Ltd (ITAT Kolkata)
Facts- The assessee, M/s. K.K. Patel Finance Ltd has jurisdiction in Indore. The Assistant Commissioner of Income Tax passed assessment orders, indicating jurisdiction. The parties discussed appellate jurisdiction between the ITAT and the High Court based on the Assessing Officer’s location. The assessee’s counsel requested the appeals be transferred to the ITAT Indore Bench for adjudication.
Conclusion- Held that the power to transfer appeals is vested with the respective Benches of the ITAT, and not with the President of the ITAT and the transfer of appeals from the Kolkata Bench to the Indore Bench was not in the interests of justice, as it would have caused inconvenience to the assessee.
The case law of MSPL Limited vs. PCIT in Writ Petition (L) No. 3865 of 2020 was referred, where the Hon’ble Bombay High Court has held that President, ITAT, has no power to transfer appeal/s between one headquarters to other. The power of transfer available with the President is only qua a particular headquarters where large number of benches are involved. For example in Kolkata there are three functioning Benches, then an appeal from Bench 1 to Bench 3 can be transferred by the President but it cannot be transferred from Kolkata to any other place in the country.
Further, that the appeals cannot be maintainable before the ITAT Kolkata Bench and dismissed the appeals for statistical purposes and also advised both parties to pursue them before 2 months at the ITAT Indore Bench and held that the period of limitation at Kolkata benches will be excluded from the limitation period.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
I.T.A. No. 1384 & 1348/Kol/2017 are appeals directed by the revenue against the orders of the learned Commissioner of Income Tax (Appeals) – 10, Kolkata, (hereinafter the ‘ld. CIT(A)’), passed u/s 250 of the Income Tax Act, 1961 (hereinafter ‘the Act’), dt. 27/03/2017 for the Assessment Year 2008-09 and dt. 28/03/2017 for 2010-11. I.T.A. No. 1544/Kol/2017 is an appeal directed at the instance of the assessee against the order of the learned Commissioner of Income Tax (Appeals) – 10, Kolkata (hereinafter the ‘ld. CIT(A)’), passed u/s 250 of the Income Tax Act, 1961 (hereinafter ‘the Act’), dt. 27/03/2017, for the Assessment Year 2009-10.
2. With the assistance of the learned representatives, we have gone through the record carefully. It emerges out from the record that the assessment order was passed by the Assistant Commissioner of Income Tax, Circle-5(1), Indore. Thus, jurisdiction over the assessee is in Indore. In Assessment Year 2009-10, the revenue has challenged the order of the ld. CIT(A) vide ITA No. 988/Ind/2019 before the ITAT Indore Bench whereas, the cross appeal has been preferred by the assessee before the ITAT Kolkata Bench.
3. During the course of hearing, we have confronted the ld. Counsel for the assessee with the judgment of the Hon’ble Supreme Court rendered in the case of Principal Commissioner of Income-tax vs. ABC Papers Ltd. reported in [2022] 141 com 332 (SC) and pointed out that the appellate jurisdiction of the Tribunal will be the geographical area where the Assessing Officer is situated, namely, in this case the Assessing Officer is situated at Indore, therefore, appellate jurisdiction of ITAT as well as of the Hon’ble High Court will rest at Indore. In response to these queries, he submitted that these appeals be transferred to Indore Bench for adjudication. However, we have confronted him with the judgment of the Hon’ble Bombay high Court rendered in the case of MSPL Limited vs. PCIT in Writ Petition (L) No. 3865 of 2020, judgment dt. 21/05/2021. Vide this judgment, Hon’ble Bombay High Court has held that President, ITAT, has no power to transfer appeal/s between one headquarters to other. The power of transfer available with the President is only qua a particular headquarters where large number of Benches are involved. For example in Kolkata there are three functioning Benches, then an appeal from Bench 1 to Bench 3 can be transferred by the President but it cannot be transferred from Kolkata to any other place in the country. The discussion made by the Hon’ble Bombay High Court, reads as follows:-
“35. That brings us to section 255 of the Act which deals with procedure of Appellate Tribunal. Since Bangalore Bench of the Tribunal in its impugned order dated 19.03.2020 has taken the view that power to transfer appeals from one Bench of the Tribunal to another Bench of the Tribunal including the power to transfer from one Bench to another Bench not within the same headquarters is traceable to section 255 of the Act, the same is extracted hereunder :-
“Procedure of Appellate Tribunal.
255. (1) The powers and functions of the Appellate Tribunal 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 such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it.
(5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.
(6) The Appellate Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the income-tax authorities referred to in section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code (45 of 1860), and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (5 of 1898).”
36. Sub section (1) of section 255 says that the powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof. As per sub section (5), subject to the provisions of the Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches in all matters arising out of the powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings. To complete the narrative, we may also refer to sub section (6) of section 255 which clearly says that a proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code. It also says that the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898.
37. From a careful analysis of section 255, more particularly sub section (5) thereof, it is not discernible as to how power of the President to transfer a pending appeal from one Bench to another Bench outside the headquarters in a different 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 consideration is when an appeal or a bunch of appeals are being heard by a Bench of the Tribunal in one State, can an order on the administrative side be passed by the President transferring a live appeal from one Bench to another Bench that too in a different State outside the headquarters ? In our opinion, no such power is discernible in section 255 of the Act. Reading or conferring such a power would amount to interference in a judicial proceeding of the Tribunal.
39. In so far the order dated 20.08.2020 passed by the President of the Tribunal is concerned, the same has been passed in exercise of the powers conferred by rule 4 of the Tribunal Rules. Relevant portion of the order dated 20.08.2020 reads as under :-
“In pursuance of Rule 4 of the Income Tax Appellate Tribunal Rules 1963, I hereby direct that the appeals mentioned below pertaining to Income Tax Appellate Tribunal, Bangalore Benches, Bangalore shall be heard and determined by Income Tax Appellate Tribunal, Mumbai Benches, Mumbai.
