Jurisdiction of ITAT Bench shall be determined by location of AO

Panalpine World Transport India Pvt Ltd Vs Addl CIT (ITAT Delhi)

Admittedly, the assessment order which culminates in the present proceeding was passed by an Assessing Officer located at Mumbai. As could be seen, after the final assessment order was passed, the jurisdiction of the Assessing Officer of the assessee was transferred from Mumbai to Delhi and the appeal arising out of the assessment order was disposed of by the first appellate authority located in New Delhi. However, as per Rule 4(1) read with paragraph 4 of the standing order/notification issued in consonance with the extant rule, the jurisdiction of the Bench which can decide the appeal is to be determined by the location of the Assessing Officer. Therefore, since, the location of the Assessing Officer in the instant proceeding is at Mumbai, the appeals, necessarily, should have been filed before Mumbai Benches and not in Delhi Benches. This is also in consonance with the view expressed by the Hon’ble Supreme Court in case of PCIT Vs. ABC Papers Ltd., [2022] 289 taxmann 150(SC).

In view of the aforesaid, we hold that the present appeals are not maintainable due to lack of jurisdiction, hence, are dismissed.

Appeal with ITAT should be filed as per location of AO

FULL TEXT OF THE ORDER OF ITAT DELHI

Captioned cross appeals by the assessee and the Revenue arise out of order dated 03.12.2018 of learned Commissioner of Income Tax (Appeals)-43, New Delhi.

2. When the appeals were taken up for hearing, it was noticed that the assessment order under section 143(3) read with Section 144C(13) of the Act dated 29.05.20 14 was passed by the Deputy Commissioner of Income Tax -10, Mumbai. As per Rule 4 of the Income Tax (Appellate Tribunal) Rules, 1963 read with paragraph 4 of Notification No. F.No.63-AD(AT/97), dated 16^th September 1997 as amended from time to time, the ordinary jurisdiction of the Bench of the Tribunal to decide an appeal is to be determined by the location of the office of the Assessing Officer. Whereas, the cross appeals have been filed, both by the assessee and the Revenue before the Delhi Benches of the Tribunal. Therefore, parties were called upon to make submissions on the maintainability of the present appeals before the Delhi Benches. In response, the learned Authorized Representative has filed the following written submissions:

1. The captioned cross-appeals of Panalpine World Transport (I) Pvt. Ltd. (now merged with DSV Air & Sea Private Limited) (herein after referred as the “Assessee”) and Department relates to Assessment Year 2010-11 and arise out of order dated 03.12.2018 passed by the Commissioner of Income Tax (Appeals) -43, New Delhi.

2. The relevant date and events in the assessment proceedings of the Assessee for the Assessment Year 2010-11 are as follows:

3. Vide application dated 14.12.2022 filed by the Assessee, it was requested to transfer the cross-appeals of Assesee and Revenue from Delhi Bench to Mumbai Bench of Income Tax Appellate Tribunal on the following grounds:

i. The assessment order dated 29.05.20 14 was passed by the Assessing Officer based in Mumbai.

ii. In terms of the ratio laid down by a three judges Bench of Hon’ble Supreme Court

in Pr. CIT vs. ABC Papers Limited, Civil Appeal No. 4252 of 2022, judgment dated 18.08.2022 [(2022) 289 Taxman 150 (SC)], an appeal against decision of the Commissioner of Income Tax (Appeals) shall lie only before the relevant Bench of the Income Tax Appellate Tribunal within whose jurisdiction the Assessing Officer who passed the assessment order is situated.

iii. The registered office as well as operation and management of the Assessee is based in Mumbai.

iv. Presently, post-merger the Assessing Officer based in Mumbai has jurisdiction over the Assessee.

4. It is pertinent to highlight that when the captioned appeals were filed by the Assessee and Revenue before the Hon’ble Delhi Bench of Tribunal – the Addl. CIT, Special Range-7, New Delhi was acting as its “Assessing Officer” and the Assessee NN as assessed in Delhi jurisdiction only.

5. At this juncture, it is respectfully submitted that Para 4 of Notification No. F. No. 63- Ad (AT)/97, dated 16th September 1997 as amended from time to.time issued by the Hon’ble President, Income Tax Appellate Tribunal, New Delhi in pursuance of sub-rule (1) of rule 4 of the Income-tax (Appellate Tribunal) Rules, 1963 provides that “The ordinary jurisdiction of the Bench will be determined not by the place of business or residence of the assessee but by the location of the office of the Assessinz Officer.”

6. It is respectfully submitted that Notification No. F. No. 63-Ad (AT)/97, dated 16th September 1997 (as amended from time to time) issued by the Hon’ble President,. ITAT, is silent on this aspect that the location of the office of the Assessing Officer was to be considered on the date of filing of appeal or the date of passing of the assessment order.

7. Whereas, the jurisdictional High Court in CIT vs. AAR BEE Industries [2013] 357 ITR 542 (Delhi) has held that the jurisdiction of High Court (same ratio for ITAT) is determined by situs of Assessing Officer at time of filing appeal. Thus, in the present facts, considering the binding judgment of jurisdictional High Court, the cross-appeals were correctly filed by the Assessee and Revenue before the Delhi Bench of the Income Tax Appellate Tribunal.

8. Recently, the Hon’ble Supreme Court in ABC Papers Limited (supra) has overruled the judgment of the Hon’ble Delhi High Court in AAR BEE Industries (supra) and held that an appeal against decision of the Commissioner of Income Tax (Appeals) shall lie only before the relevant Bench of the Income Tax Appellate Tribunal within whose jurisdiction the Assessing Officer who passed the assessment order is situated. Relevant extract of the decision of Hon’ble Supreme Court in ABC Papers Limited (supra) is reproduced below for ready reference:

“26. ….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 that of the High Court in which the Assessing Officer was located, and vest it in the High Court having jurisdiction over the transferee Assessing Officer.

31. The power of transfer exercisable under section 127 is relatable only to the jurisdiction of the Income-tax Authorities. It has no bearing on the ITAT, much less on a High Court. If we accept the submission, it will have the effect of the executive having the power to determine the jurisdiction of a High Court. This can never be the intention of the Parliament. The jurisdiction of a High Court stands on its own footing by virtue of Section 260A read with Section 269 of the Act. While interpreting a judicial remedy, a Constitutional Court should not adopt an approach where the identity of the appellate forum would be contingent upon or vacillates subject to the exercise of some other power. Such an interpretation will clearly be against the interest of justice.. Under Section 127, the authorities have the power to transfer a case either upon the request of an assessee or for their own reasons. Though the decision under section 127 is subject to judicial review or even an appellate scrutiny, this Court for larger reasons would avoid an interpretation^. that would render the appellate jurisdiction of a High Court dependent upon the executive power. As a matter of principle, transfer of a case from one judicial forum to another judicial forum, without 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.

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 12 7 for the same assessment year(s).”

9. For completeness, it is humbly submitted that the Hon’ble Supreme Court in ACIT vs Saurashtra Kutch Stock Exchange Ltd. 12008] 305 ITR 227 (SC) has held that “It is also well settled that a judicial decision acts retrospectively.” Thus, the law laid down by the Hon’ble Supreme Court in ABC Papers Limited (supra) shall apply even to pending appeals sub-judice before this Hon’ble Tribunal and accordingly, in the present facts, the jurisdiction to adjudicate the captioned cross-appeals vests with the Mumbai Bench of the Income Tax Appellate Tribunal.

10. In view of above, it is prayed to allow the transfer application whilst directing transfer of the captioned cross-appeals of the Assessee and Revenue from Delhi Bench to Mumbai Bench of Tribunal.

11. Without prejudice, on a demurrer and only for the sake of completeness of arguments, it is respectfully submitted that the Asses see has bona fide filed and is pursuing its appeal before the Delhi Bench of Income Tax Appellate, however, in case the Hon’ble Bench is of the opinion that this is not a fit case for exercise of jurisdiction for transfer of its appeal from Delhi Bench to Mumbai Bench of Tribunal than specific directions may be passed whilst allowing the Assessee to re-file its appeal before Mumbai Bench of Tribunal. The period during which the Assessee was pursuing its appeal before the Delhi Bench of Tribunal may be directed to be excluded for the purpose of calculating the period of limitation.

3. We have heard the parties and perused the materials on record. Admittedly, the assessment order which culminates in the present proceeding was passed by an Assessing Officer located at Mumbai. As could be seen, after the final assessment order was passed, the jurisdiction of the Assessing Officer of the assessee was transferred from Mumbai to Delhi and the appeal arising out of the assessment order was disposed of by the first appellate authority located in New Delhi. However, as per Rule 4(1) read with paragraph 4 of the standing order/notification issued in consonance with the extant rule, the jurisdiction of the Bench which can decide the appeal is to be determined by the location of the Assessing Officer. Therefore, since, the location of the Assessing Officer in the instant proceeding is at Mumbai, the appeals, necessarily, should have been filed before Mumbai Benches and not in Delhi Benches. This is also in consonance with the view expressed by the Hon’ble Supreme Court in case of PCIT Vs. ABC Papers Ltd., [2022] 289 taxmann 150(SC).

4. In view of the aforesaid, we hold that the present appeals are not maintainable due to lack of jurisdiction, hence, are dismissed. Accordingly, we do so.

5. However, keeping in view the fact that the parties have filed the appeals under a bonafide belief that appeals are maintainable in Delhi Benches, since the first appellate authority who has disposed of assessee’s appeal is located in New Delhi, we grant liberty to the parties to filed fresh appeals before the Mumbai Benches along with petition seeking condonation of delay in filing the appeals, which shall be considered sympathetically by the concerned Bench.

6. With the aforesaid observations, the appeals are dismissed.

Order pronounced in the open court on 24^th March, 2023