ACIT Vs Jyothy Labs Limited (ITAT Mumbai)
The territorial jurisdiction of an ITAT Bench is determined by the location of the Assessing Officer who passed the assessment order, and not by the location of the assessee or the CIT(A); therefore, an appeal filed before a Bench lacking such jurisdiction cannot be decided on merits.
Summary: The appeal filed by the Revenue and the cross objection filed by the assessee arose from the order of the CIT(A)-56, Mumbai for AY 2014-15. The underlying assessment had been passed by the Deputy Commissioner of Income Tax, Corporate Circle 2(2), Chennai-34, under section 143(3) read with section 144C(3) of the Income-tax Act. The Revenue challenged the relief granted by the CIT(A) concerning a transfer pricing adjustment of ₹37,77,11,566/- and deduction under section 37(1) for sales promotion expenses. The assessee, through its cross objection, challenged the validity of the specified domestic transaction adjustment, the reference to the Transfer Pricing Officer and the initiation of penalty proceedings. Before considering the substantive grounds, the Tribunal examined the territorial jurisdiction of the Mumbai Bench. Relying upon the Supreme Court’s decision in PCIT Vs ABC Papers Ltd., the Tribunal observed that the relevant jurisdiction is connected with the location of the Assessing Officer who passed the assessment order. The Tribunal further relied upon the Bombay High Court decision in MSPL Limited Vs PCIT, which considered the territorial jurisdiction of ITAT Benches and the power to transfer pending appeals between Benches. Since the assessment order had been passed by the DCIT, Corporate Circle 2(2), Chennai, the Tribunal held that the appeal filed before the Mumbai Bench was under improper territorial jurisdiction. The cross objection arising from the same appellate order was also held incapable of adjudication by the Mumbai Bench. The Tribunal accordingly dismissed both the Revenue’s appeal and the assessee’s cross objection for want of territorial jurisdiction, while granting liberty to the parties to approach the appropriate Tribunal Bench. The Tribunal expressly left all substantive issues open for consideration by the Bench having territorial jurisdiction over the Assessing Officer who passed the assessment order.
