ACIT, NEW DELHI vs. M/S SAHARA INDIA (FIRM), LUCKNOW

Shri Ashish Tripathi, representing the Department seconded the submissions made by ld. Counsel for the assessee in so far as Territorial Jurisdiction of Delhi Benches to adjudicate these appeals.

We have heard the submissions made by both sides and have considered the Standing Order Rules F.No.63/AD(AT)/97 dated 16.09.1997 under IT(AT). It is an admitted position that the 11 appeals and 9 cross objections emanate from the assessment orders passed by the Assessing Officers having situs at Lucknow. The Standing Order dated 16.09.1997 (supra) inter alia states:

The Hon’ble Apex Court in the case of PCIT vs. ABC Paper Ltd. (supra) inter alia after considering provisions of section 127 and 255(5) of the Act, Rule 3 and 4 of the IT(AT) Rules and catena of judgment on the issue in an ambiguous manner held that even if the case of an assessee is transferred u/s. 127 of the Act, the Tribunal and the Hon’ble High Court within whose jurisdiction AO passed assessment order would continue to exercise jurisdiction of appeal. For the sake of completeness the relevant extract of the observations of the Hon’ble Apex Court are reproduced herein under:- “30. The legal structure under the Income-tax Act commencing with Assessing Officer, the Commissioner of Appeals, ITAT and finally the High Court under section 260A must be seen as a lineal progression of judicial remedies. Culmination of all these proceedings in question of law jurisdiction of the High Court under section 260A of the Act is of special significance as it depicts the overarching judicial superintendence of the High Court over Tribunals and other Authorities operating within its territorial jurisdiction.

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 (A.Y.1995-96), CO No. 249/DEL/2009 And other Sahara Group Cases 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.

For the reasons stated above, we hold that the decision of the High Court of Delhi in Sahara India Financial Corpn. India Ltd. (supra) and Aar Bee Industries (supra), do not lay down the correct law and therefore, we overrule these judgments.

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 127 for the same assessment year(s).” [Emphasized by us] 8. The Hon’ble Apex Court in the case of PCIT vs. MSPL Ltd. (supra) has reiterated the legal position that the seat of Tribunal and/or jurisdiction of concerned Hon’ble High Court would depend upon where seat of the Assessing Officer who has passed the assessment order. The fact that subsequently the cases are consolidated before another Assessing Officer in exercise of power u/s. 127 of the Act would not change the jurisdiction of appellate Authorities.

We find no force in the argument of ld. Counsel for the assessee either, that the decision rendered in the case of ABC Papers Ltd. (supra) will have no impact on the appeals which have been transferred to Delhi Benches from Lucknow Benches prior to the said judgment. The Hon’ble Apex Court has explained the law ‘as it has always been’ and has not expounded any new legal principle.

Before parting we may observe that the appellant cannot be left in lurch. Liberty is granted to the Department, as well as, the respondent/assessee to file fresh appeals/cross objections, as the case may be before appropriate Bench of the Tribunal i.e. at Lucknow Benches, within 60 days from the date of receipt of this order. The consequent delay caused in filing of these appeals/cross objections from the date of impugned order shall be condoned.