ITAT Bench Cannot Reject Appeals for Lack of Territorial Jurisdiction After President’s Transfer Order: Delhi HC

Sahara India Vs Income Tax Appellate Tribunal Delhi & Ors. (Delhi High Court)

The writ petitions challenged the common order dated 30.05.2025 and the order dated 20.11.2024 passed by the Income Tax Appellate Tribunal, Bench “A”, New Delhi, whereby the Tribunal rejected the appeals filed by both the assessees and the Revenue on the ground of lack of territorial jurisdiction. The appeals related to Assessment Years 1995-96, 1996-97, 1997-98 and 1998-99, and the place of assessment was Lucknow.

The petitioners submitted that the Tribunal had committed errors of law and fact in dismissing the appeals on the ground of territorial jurisdiction. It was argued that, in an identical factual situation concerning another group company, a Coordinate Bench of the Delhi High Court had, by judgment dated 22.01.2026 in Sahara India Limited v. Income Tax Appellate Tribunal, allowed the writ petition, set aside similar orders of the Tribunal, and restored the appeals for hearing before the Delhi Bench of the Tribunal.

Counsel for the respondent did not dispute the factual or legal position arising from the earlier judgment.

The High Court relied upon the reasoning contained in the earlier decision. It noted that the Coordinate Bench had observed that the Delhi Bench of the Tribunal had rejected the appeals despite being aware that they had been transferred from the Lucknow Bench pursuant to an administrative order of the President of the Tribunal. The earlier judgment held that a Bench of the Tribunal could not nullify or sit in appeal over the administrative transfer order passed by the President of the Tribunal. It further observed that the Tribunal had erred in relying upon the decision in ABC Papers Ltd., as that decision dealt with the High Court having jurisdiction over appeals under Section 260A of the Income-tax Act, 1961 following transfer under Section 127, and did not concern the validity or effect of an administrative transfer of appeals between Benches of the Tribunal.

The earlier judgment also observed that, even if the Delhi Bench believed that it lacked territorial jurisdiction, it ought to have placed the matters before the President of the Tribunal for appropriate transfer orders rather than dismissing the appeals and directing the parties to institute fresh appeals before the Lucknow Bench. It further restored the appeals to their original numbers before the Delhi Bench and directed that any appeals filed before the Lucknow Bench pursuant to the Tribunal’s orders should remain deferred.

Following the reasoning in the Coordinate Bench decision, the Delhi High Court allowed the present writ petitions. It set aside the impugned orders of the Tribunal and restored the appeals to the dockets of the Delhi Bench of the Tribunal for decision in accordance with law.

The Court further clarified that, if the parties had filed any appeals or cross-objections before the Lucknow Bench pursuant to the Tribunal’s impugned orders, the hearing of those appeals or cross-objections would remain deferred. Those matters were directed to be transferred to the Delhi Bench of the Tribunal, where the appeals would thereafter be heard and decided in accordance with law.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. The present writ petitions have been preferred against the common order dated 30.05.2025 [challenged in W.P.(C) 7484/2026, W.P.(C) 7485/2026, W.P.(C) 7491/2026 and W.P.(C) 7507/2026] and the order dated 20.11.2024 [challenged in W.P.(C) 7486/2026] passed by the Income Tax Appellate Tribunal, Bench “A”, New Delhi (‘hereinafter referred to as the Tribunal), whereby the appeals were rejected on the ground of lack of territorial jurisdiction.

2. A tabular chart containing the particulars of the order under challenge in each of the writ petitions is reproduced hereunder:

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3. Mr. Aditya Vohra, learned Counsel for the petitioners, submitted that the Tribunal has dismissed the appeals filed by the petitioners/assessees as well as the corresponding appeals filed by the Revenue, on the ground of lack of territorial jurisdiction.

4. He further submitted that the Tribunal has clearly fallen into an error of law so also of facts. In this regard, he submitted that in an identical fact-situation involving another company of the group, a Coordinate Bench of this Court, by its judgment dated 22.01.2026 in case of Sahara India Limited v. Income Tax Appellate Tribunal reported in 2026 183 com 179 (Delhi), allowed the writ petition and while setting aside the impugned orders, remanded the matter and restored the appeals for hearing before Delhi Bench of the Tribunal.

5. Ruchir Bhatia, learned Senior Standing Counsel for the respondent, is not in a position to dispute the aforesaid position of fact and law.

6. In the case of Sahara India (supra), the Coordinate Bench of this Court had observed as under:

“16. The orders dated 20.11.2024 passed by Delhi Bench of the Tribunal, impugned in the present writ petition rejecting the appeals outrightly on the ground of lack of territorial jurisdiction, despite being cognizant of the fact that the appeals came to be transferred by the order passed by the President of the Tribunal shocks us, to say the least. We are using such strong expression for the Delhi Bench of the Tribunal, because of the background facts.

14. A simple look at para No.4 of the impugned order clearly unravels that the fact that the appeals stood transferred from the Lucknow Bench of the Tribunal was very much known to the Bench hearing the appeals. We would like to reproduce relevant part of the order to underscore that the Tribunal was cognizant of the factum of transfer, which reads as follows:

“4. Faced with this situation, both the learned parties raised their vehement submissions that Income Tax Appellate Tribunal, Delhi Benches could very well decide the instant cases once they have transferred from Lucknow benches.”

(emphasis supplied)

18. According to us, the impugned order passed by the Delhi Bench of the Tribunal amounts to sitting over an administrative order of the President of the Tribunal and setting an administrative order at naught. Such order is in the teeth of the administrative powers of the President of the Tribunal. Once a matter stands transferred from one Bench to another for whatever reasons, except for the High Court or the court competent considering legality of said order, no statutory authority including the Tribunal can upturn such order of the President of the Tribunal. A Bench of the Tribunal of whatever strength can by no stretch of imagination do the same. Because an administrative order of the President cannot be undone by judicial order of the Bench of the Tribunal.

19. Reliance placed by the Delhi Bench of the Tribunal on the judgment rendered in the case of ABC Papers Ltd. (supra) is also misplaced inasmuch as a look at the above referred judgment of Hon’ble the Supreme Court clearly shows that the issue before Hon’ble the Supreme Court was as to whether appellate jurisdiction under Section 260A shifts after a case is transferred under Section 127 of the Act of 1961, where following the transfer of the assessee’s cases under Section 127 of the Act of 1961, both the Punjab & Haryana High Court and the Delhi High Court had declined jurisdiction over appeals filed under Section 260A against orders of the Tribunal. While dealing with such case, Hon’ble the Supreme Court held that the High Court which has supervisory jurisdiction over the Assessing Officer who had passed the order impugned has the jurisdiction to entertain the writ petition or appeal under Section 260A of the Act of 1961.

20. Needless to mention that in the case before the Apex Court, the question involved was where would an appeal under Section 260A lie (before Punjab & Haryana High Court or before the Delhi High Court) and it was not a case of transfer of appeal by virtue of administrative order at all. We are therefore, of the view that the Delhi Bench of the Tribunal has erred.

21. Going by the principle laid down in the above referred case, may be the appeal under 260A against the order on merit passed by the Tribunal may lie before the Allahabad High Court, but so far as the appeals before the Tribunal are concerned, they were to be heard by the Tribunal, Principal Bench Delhi. Because the said judgment of Hon’ble the Supreme Court does not apply to the extant facts where the administrative power of the President (if any) were in question.

22. We have asked a question to ourselves as well, in light of the said judgment of the Apex Court as to what would happen to the writ petition in hands. Having pondered over the issue we hold that since the question before us pertains to the legality or propriety of the Tribunal’s order rejecting the appeals on the ground of lack of territorial jurisdiction and also because the issue does not directly emanate from any assessment order, the writ petitions are required to be heard by us and hence, the situs of AO will not be relevant and situs of the Tribunal (Delhi) is the determining factor.

23. Though, we are of the view that approach of the Tribunal, Delhi Bench in dismissing the appeals and directing the assessees and the department to file fresh appeals before Lucknow Bench of the Tribunal is erroneous but still we feel that even if the Delhi Bench was of the view that it lacked the territorial jurisdiction, it ought to have placed the matters before the President for passing appropriate orders for transferring these cases to Lucknow. This kind of practice showcases the Tribunal’s overzealousness of disposing more cases.

24. We are informed that these (13 appeals) are not the only appeals, which Delhi Bench of the Tribunal has dismissed, there are many more. Ironically, by way of impugned order dated 20.11.2024, the Delhi Bench has been able to reduce its pendency by a number of cases but at the same time it has led to an automatic increase at Lucknow Bench and the Department & the assessee have been burdened with the onerous task of instituting fresh appeals before the Lucknow Bench, though otherwise not required.

25. We, therefore, set aside all the orders impugned in these petitions and restore the matters back to their original number to the dockets of the Delhi Bench of the Tribunal, to be decided on merits.

26. We are conscious of the fact that more than 200 appeals were transferred from the Lucknow Bench of the Tribunal to Delhi Bench of the Tribunal, by the order(s) of the President passed in 2006. Consequent to the order(s) of like nature passed by the Tribunal, the concerned parties might have filed appeals/cross-objections before the Lucknow Bench. If that be so, as a sequel to restoration of the appeals, hearing of such appeals, which have been filed at Lucknow Bench shall remain deferred. It is held that it is only the Delhi Bench of the Tribunal, which shall decide the appeals on merits. Once such appeals are finally decided by the Delhi Bench, upon production of a copy of order of disposal, the Lucknow Bench shall close those appeal(s) as having been decided by Delhi Bench of the Tribunal.”

7. Following the reasoning given in the aforesaid judgment, the present writ petitions are also allowed. Consequently, the impugned order(s) passed by the Tribunal are set aside and the appeals are restored to the dockets of the Delhi Bench of the Tribunal to be decided in accordance with law.

8. We make it clear that, consequent to the impugned order of the Tribunal, if the parties have filed any appeals and/or cross objections before the Lucknow Bench of the Tribunal, the hearing of such appeals and/or cross objections before the Lucknow Bench shall be deferred and those appeals and/or cross objections shall be transferred to the Delhi Bench of the Tribunal. The appeals shall thereafter be heard and decided by the Delhi Bench in accordance with law.