DCIT -3(4), MUM vs. M/S. UNION BANK OF INDIA (ERSTWHILE CORPORATION BANK), MUM

This appeal by the Revenue is directed against order dated 10.10.2022 passed by the Ld. Commissioner of Income-tax (Appeals)- National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2007-08, raising following grounds:

1. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A), NFAC erred in holding the issue to be a mistake 'apparent from record' & setting aside the rejection of rectification application u/s 154 by the AO, by ignoring the fact that the issue involved IS debatable in nature and not a mistake apparent from record?

2. Whether on the facts and in circumstances of the case and in law, the 2. Whether on the facts and in circumstances of the case and in law, the 2. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A), NFAC erred in relying on the decision of Hon'ble Supreme Court Ld. CIT(A), NFAC erred in relying on the decision of Hon'ble Supreme Court Ld. CIT(A), NFAC erred in relying on the decision of Hon'ble Supreme Court in the case of Saurashtra Kutch Stock Exchange in the case of Saurashtra Kutch Stock Exchange Ltd, ignoring the fact that Ltd, ignoring the fact that the Issue is debatable, the Issue is debatable, as the facts and circumstances of the present case circumstances of the present case is different to that of Vijaya Bank vs Commissioner on income Tax [civil is different to that of Vijaya Bank vs Commissioner on income Tax [civil is different to that of Vijaya Bank vs Commissioner on income Tax [civil appeal no. 3286 appeal no. 3286-3287 of 2010] & Catholic Syrian Bank Ltd vs 3287 of 2010] & Catholic Syrian Bank Ltd vs Commissioner Of Inco Commissioner Of Income Tax CIVIL APPEAL NO. 1143 OF 2011. me Tax CIVIL APPEAL NO. 1143 OF 2011. 1. Whether on the facts and in circumstances of the case and in law, the 1. Whether on the facts and in circumstances of the case and in law, the 1. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A), NFAC was justified in directing the AO to delete the Ld. CIT(A), NFAC was justified in directing the AO to delete the Ld. CIT(A), NFAC was justified in directing the AO to delete the disallowance of bad debts amounting to Rs. 1619.82 crores pertaining to disallowance of bad debts amounting to Rs. 1619.82 crores pertaining to disallowance of bad debts amounting to Rs. 1619.82 crores pertaining to non-Rural bad debts claimed u/s 36(1)(vii) of the Act. l bad debts claimed u/s 36(1)(vii) of the Act. 2. Whether the the Ld. CIT(A), NFAC was right in holding that the 2. Whether the the Ld. CIT(A), NFAC was right in holding that the 2. Whether the the Ld. CIT(A), NFAC was right in holding that the provisions of 36(1)(viia) of the Act do not apply to bad debts made by non provisions of 36(1)(viia) of the Act do not apply to bad debts made by non provisions of 36(1)(viia) of the Act do not apply to bad debts made by non rural branches particularly after insertion of rural branches particularly after insertion of explanation 2 to explanation 2 to clause (viia) of subsection (1) of section 36 by the Finance Act 2013 with effect from 1 of subsection (1) of section 36 by the Finance Act 2013 with effect from 1 of subsection (1) of section 36 by the Finance Act 2013 with effect from 1 April 2014. 2. At the outset before us, At the outset before us, Ld. Counsel for the assessee filed an Ld. Counsel for the assessee filed an application under Rule 29 of the ITAT Rules raising the issue that application under Rule 29 of the ITAT Rules raising the issue that application under Rule 29 of the ITAT Rules raising the issue that Assessing Officer who passed the original assessment order is Assessing Officer who passed the original assessment order is Assessing Officer who passed the original assessment order is situated in Mangalore falling under the jurisdiction of the situated in Mangalore falling under the jurisdiction of the situated in Mangalore falling under the jurisdiction of the Karnataka High Court and ther Karnataka High Court and therefore, in view of the decision of the efore, in view of the decision of the Hon’ble Supreme Court in the case of ABC Papers Ltd. [2022] 447 Hon’ble Supreme Court in the case of ABC Papers Ltd. [2022] 447 Hon’ble Supreme Court in the case of ABC Papers Ltd. [2022] 447 ITR 1 (SC) the jurisdiction of the ITAT o ITR 1 (SC) the jurisdiction of the ITAT or the High Court would r the High Court would depend on the seat of the Assessing Officer who passed the said the seat of the Assessing Officer who passed the said the seat of the Assessing Officer who passed the said assessment order. He submi assessment order. He submitted that correct jurisdiction over the tted that correct jurisdiction over the appeal lies before ITAT Bangalore Bench and this appeal is not appeal lies before ITAT Bangalore Bench and this appeal is not appeal lies before ITAT Bangalore Bench and this appeal is not maintainable before Mumbai Bench of ITAT. The Counsel for the before Mumbai Bench of ITAT. The Counsel for the before Mumbai Bench of ITAT. The Counsel for the referred to the decision of the Hon’ble Bombay High Hon’ble Bombay High assessee referred to the decision of the Court in the case of Pete Court in the case of Peter Vaz v. CIT (2016) 436 ITR 616 r Vaz v. CIT (2016) 436 ITR 616 (Bombay) and submitted that assessee has raised ) and submitted that assessee has raised a a ground by way of application under Rule 27 of the Income of application under Rule 27 of the Income-tax Appellate Tribunal tax Appellate Tribunal Rules, 1963 (in short ‘the Rules’) Rules, 1963 (in short ‘the Rules’) which involve challenge of the which involve challenge of the jurisdiction of the Assessin jurisdiction of the Assessing Officer in preferring this appeal in preferring this appeal, which goes to the root of the matter, goes to the root of the matter, therefore application under Rule 29 therefore application under Rule 29 might be admitted. might be admitted. The Ld. Counsel further submitted that the submitted that the decision of Hon’ble Supreme Court in ABC papers (supra) has of Hon’ble Supreme Court in ABC papers (supra) has of Hon’ble Supreme Court in ABC papers (supra) has been further followed by the Hon’ble Supreme Court in the case of MSPL by the Hon’ble Supreme Court in the case of MSPL by the Hon’ble Supreme Court in the case of MSPL Ltd. [2023] 454 ITR 280. Accordingly, the Ld. Counsel submitted Ltd. [2023] 454 ITR 280. Accordingly, the Ld. Counsel submitted Ltd. [2023] 454 ITR 280. Accordingly, the Ld. Counsel submitted that the Mumbai Bench of the Tribunal has no jurisdiction to hear that the Mumbai Bench of the Tribunal has no jurisdicti that the Mumbai Bench of the Tribunal has no jurisdicti the impugned appeal and the president ITAT does not have power to the impugned appeal and the president ITAT does not have power to the impugned appeal and the president ITAT does not have power to transfer this appeal to Bangalore Bench of ITAT in view of decision his appeal to Bangalore Bench of ITAT in view of decision his appeal to Bangalore Bench of ITAT in view of decision of Hon’ble Bombay High Court in the case of MSPL Ltd in the writ of Hon’ble Bombay High Court in the case of MSPL Ltd of Hon’ble Bombay High Court in the case of MSPL Ltd petition (L) No. 3865 of 2020 petition (L) No. 3865 of 2020, thus appeal need to be dismissed as , thus appeal need to be dismissed as non maintainable.

3.1 We find that the Hon’ble Supreme Cour We find that the Hon’ble Supreme Court in the case of t in the case of ABC Papers Ltd. (supra) held that appeal against every decision of the that appeal against every decision of the ITAT shall lie only before the High Court within whose jurisdiction the ITAT shall lie only before the High Court within whose jurisdiction the ITAT shall lie only before the High Court within whose jurisdiction the Assessing Officer passed the assessment order is situated, even if Assessing Officer passed the assessment order is situated Assessing Officer passed the assessment order is situated the case or the cases the case or the cases of assessee are transferred invoking invoking power u/s 127 of the Act, the High Court within whose jurisdiction the the High Court within whose jurisdiction the the High Court within whose jurisdiction the Assessing Officer has passed the order Assessing Officer has passed the order , shall continue to exercise , shall continue to exercise jurisdiction of the appeal and this principle jurisdiction of the appeal and this principle is applicable even if the is applicable even if the transfer is u/s 127 of the Act for same 127 of the Act for same assessment year assessment year(s). The same principle lies for the the filing appeal before the ITAT. In the case in . In the case in hand, the Assistant the Assistant Commissioner of Income- -tax, Circle 2, Mangalore, has passed the assessment order, hence the appeal lies Mangalore, has passed the assessment order, hence the appeal lies Mangalore, has passed the assessment order, hence the appeal lies e Bangalore Bench. Further, the Hon’ble Bombay High Hon’ble Bombay High before the Bangalore Bench. Court in the case of MSPL Ltd. (supra) Court in the case of MSPL Ltd. (supra) held that the President of held that the President of ITAT has no power to transfer the appeals no power to transfer the appeals from Bench at one from Bench at one headquarter to bench at another headquarter to bench at another headquarter, and this appeal can’t , and this appeal can’t be transferred to Bangalore Bench . erred to Bangalore Bench .

3.2 In view of the above, In view of the above, we are of the opinion that the appeal of we are of the opinion that the appeal of the Revenue is not maintainable not maintainable in present form before the ITAT, present form before the ITAT, Mumbai Bench. The Revenue Mumbai Bench. The Revenue is at liberty to approach the liberty to approach the concerned Bench of the ITAT having juris concerned Bench of the ITAT having jurisdiction over the Assessing diction over the Assessing Officer at Mangalore, , if so advised. The period of limitation if so advised. The period of limitation in filing the appeal shall accordingly be considered by the concerned Bench shall accordingly be considered by the concerned Bench shall accordingly be considered by the concerned Bench keeping in view the fact that the fact that ITAT Rules have been have been interpreted by the Hon’ble Bombay High C the Hon’ble Bombay High Court recently, which has has been further upheld by the Hon’ble Supreme Court in MSPL Ltd. (supra). upheld by the Hon’ble Supreme Court in MSPL Ltd. (supra). upheld by the Hon’ble Supreme Court in MSPL Ltd. (supra).