COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 vs. CHARU AGARWAL

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ITA/315/2022HC DelhiDLHC01033884202208 September 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that it did not have the territorial jurisdiction to entertain the present appeals. Citing the Supreme Court's judgment in Pr. Commissioner of Income Tax – I, Chandigarh vs. ABC Papers Limited, 2022 SCC OnLine SC 1036, the Court emphasized 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. The Court noted that the Assessing Officer in this case is based in Gurgaon, Haryana. Therefore, the Delhi High Court dismissed the appeals. However, the appellant was granted liberty to file the appeals in the appropriate court having territorial jurisdiction within twelve weeks. The rights and contentions of all parties were left open.

What were the facts?

These are income tax appeals filed by the Commissioner of Income Tax (International Taxation)-2, the revenue, against an order dated February 8, 2022, passed by the Income Tax Appellate Tribunal (ITAT). The appeals pertain to Assessment Year 2017-18 and concern the respondent, Charu Agarwal, the assessee. The revenue's primary contention is that the ITAT erred in granting the assessee a deduction under Section 54 of the Income Tax Act, 1961, for capital gains arising from the sale of a plot of land. The revenue notes that the Assessing Officer who passed the assessment orders is located in Gurgaon, Haryana. The appeals were filed before the Delhi High Court.

What were the issues?

1. Whether the Delhi High Court has the territorial jurisdiction to entertain appeals against the ITAT order when the Assessing Officer who passed the assessment order is situated in Gurgaon, Haryana. (Question of law, turning on territorial jurisdiction). Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The revenue argued that the ITAT erred in extending the benefit of deduction under Section 54 of the Income Tax Act, 1961, to capital gains arising on the sale of a plot of land not appurtenant to a house property, which was not owned by the assessee. The revenue relied on the Supreme Court's decision in Pr. Commissioner of Income Tax – I, Chandigarh vs. ABC Papers Limited, 2022 SCC OnLine SC 1036, to argue that appeals against ITAT decisions lie only before the High Court within whose jurisdiction the Assessing Officer who passed the assessment order is situated.

Which sections of the Income-tax Act were involved?

Section 54,Section 127

AI-generated summary — verify with the full judgment below

$~30 & 31 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 314/2022 COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 ..... Appellant Through: Mr.Sanjay Kumar, Sr.Standing Counsel for the Revenue with Ms.Easha Kadian, Advocate. versus CHARU AGARWAL ..... Respondent Through: None 31 + ITA 315/2022 COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 ..... Appellant Through: Mr.Sanjay Kumar, Sr.Standing Counsel for the Revenue with Ms.Easha Kadian, Advocate. versus CHARU AGARWAL ..... Respondent Through: None CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 08.09.2022 C.M.No.39308/2022 in ITA No.314/2022 C.M.No.39309/2022 in ITA No.315/2022 Exemption allowed, subject to all just exceptions. Accordingly, the applications stand disposed of. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 01:35:31

ITA No.314/2022 ITA No.315/2022 Present income tax appeals have been filed challenging the order dated 8th February, 2022 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 1367/Del./2020 & ITA No. 1794/Del./2020 for the Assessment Year 2017-18. Learned counsel for the Appellant states that the ITAT has erred in extending the benefit of deduction under Section 54 of the Income Tax Act, 1961 [‘the Act’] to capital gains arising on sale of plot of land not appurtenant to house property which was not owned by the assessee. A perusal of the paper book reveals that the Assessing Officer, who has passed the assessment orders, is based in Gurgaon, Haryana. Recently, the Supreme Court in Pr. Commissioner of Income Tax – I, Chandigarh vs. ABC Papers Limited, 2022 SCC OnLine SC 1036 has held as under:- “38. 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).” In view of the aforesaid judgment, this Court does not have the territorial jurisdiction to entertain the present appeals. Accordingly, the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 01:35:31

appeals are dismissed with liberty to the appellant to file the appeals in accordance with law in a court having territorial jurisdiction within twelve weeks. The rights and contentions of all the parties are left open. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J SEPTEMBER 8, 2022 KA This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 01:35:31

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