ACIT, CENTRAL CIRCLE -3, THANE, THANE vs. ARUN KUMAR PILLAI, BENGALURU
Before: SHRI OM PRAKASH KANT, AM & MS. KAVITHA RAJAGOPAL, JM
Per Kavitha Rajagopal, J M:
These captioned appeals are filed by the revenue, challenging the order of the learned Commissioner of Income Tax (Appeals)- 15, Bengaluru (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short)
2015-16 to 2017-18. 2. As the facts are identical, we hereby pass a consolidated order by taking ITA No.
1940/Mum/2025 as a lead case.
3. The revenue has raised the following grounds of appeal:
ITA No. 1940 to 1942/Mum/2025 (A.Y. 2015-16 to 2016-17)
Arun Kumar Pillai
“1) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in holding that the Panchnama showing the warrant of authorization issued in the name of "M/s Skanray Technologhies Pvt. Ltd.", can be considered a warrant issued in the case of "Arun Kumar Pillai, merely because the name of "Arun Kumar Pillai appears in the address details of the premises searched, thereby directing the assessment u/s 153A instead of Section 153C, contrary to the statutory mandate and established principles governing search and seizure under the Income Tax Act.
21 On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in holding that no material of incriminating nature was found, ignoring the documents seized during the search action which revealed shareholding of the assessee in various companies and such information was not disclosed by the assessee in his ITR filed for the relevant assessment year.
3) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in holding that the addition under section 2(22)(e) of the Income Tax Act, 1961, despite the presence of seized material substantiating the nature of deemed dividend transactions and concluding that the addition was solely based on financial statements already submitted by the assessee.”
Brief facts of the case are that the assessee is an individual and had filed his return of income e u/s 139(1) dated 31.08.2015, declaring total income at Rs. 8,06,57,320/-. The assessee’s case was selected for scrutiny under CASS and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee and the assessment order was passed by the Deputy Commissioner of Income Tax, Central Circle Central Circle 2(3), BLR. 5. Aggrieved the assessee was in appeal before the first appellate authority, challenging the assessment order. 6. The ld. CIT(A) deleted the impugned additions made by the ld. AO and against which the revenue is in appeal before us. 7. As this matter came up for hearing before us, it was observed that the assessment order was passed by the ld. AO, situated at Bangalore, where the resultant juri iction of the Tribunal to decide this appeal would be Bangalore Bench and not the Mumbai Bench
ITA No. 1940 to 1942/Mum/2025 (A.Y. 2015-16 to 2016-17)
Arun Kumar Pillai in view of the decision of the Hon'ble Supreme Court in the case of ABC Papers Ltd.
[2022] 447 ITR 1 (SC).
8. The learned Departmental Representative (ld. DR for short) and the learned Authorised
Representative (ld. AR for short) for the Revenue and the Assessee respectively conceded to the same.
9. We have heard the rival submissions and perused the assessment order placed on record. It is observed that the original assessment order was passed by the ld. A.O.
which Juri ictional High Court would be the Hon’ble High Court of Karnataka. In view of the decision of the Hon'ble Apex Court in the case of ABC Papers Ltd. (supra), wherein it was held that appeal against every decision of the ITAT shall lie only before the Hon’ble High Court within whose juri iction the Assessing Officer passed the assessment order is situated, even if the case or the cases of assessee are transferred invoking power u/s. 127 of the Act, the High Court within whose juri iction the Assessing Officer has passed the order, shall continue to exercise juri iction of the appeal. This would also be applicable to appeals that are filed before the Tribunal as well.
10. From the above, it is evident that the present appeal filed by the Revenue can be adjudicated only by the Bangalore bench, in view of the decision of the Hon'ble Apex
Court in the case of ABC Papers Ltd. (supra) and in the subsequent decision of Hon'ble
Apex Court in the case of Pr. CIT vs. MSPL Ltd. [2023] 150 taxmann.com 41 (SC) which has reiterated this proposition laid down by the Hon'ble Apex Court in the case
ITA No. 1940 to 1942/Mum/2025 (A.Y. 2015-16 to 2016-17)
Arun Kumar Pillai of ABC Papers Ltd. (supra). The relevant extract of the said decision is cited hereunder for ease of reference: -
“3. Learned Senior Advocate appearing on behalf of the Assessee has drawn out attention to the recent decision of this Court in Pr. CIT v. ABC Papers Ltd. [2022] 141 taxmann.com
332/289 Taxman 150/447 ITR1, more particularly paragraphs 24, 25, 42 and 45. It is submitted that in the said decision, it is observed and held by this Court that the seat of ITAT and/or juri iction of the concerned High Court would depend upon where the seat of Assessing Officer was and the Assessing Officer, who passed the order. It is submitted that in the present case, the Assessing Officer passed order in Bangalore. Even the CITA also passed order in Bangalore. It is submitted that, therefore, as observed and held by this Court, the appeal against the Assessment order/the order passed by the CITA would only lie before the ITAT, Bangalore.
The aforesaid factual aspects have not been disputed by Shri N Venkataraman, learned ASG appearing on behalf of the Revenue.
In paras 24, 25, 42 and 45 of the judgment and order in the case of ABC Papers Ltd. (supra), this Court has observed and held as under –
Keeping the above principle in mind, we will now return to the inquiry into the appropriate High Court for filing an appeal against an order of a bench of the ITAT exercising juri iction over more than one state. We notice that the issue has already fallen for consideration before a Division Bench of the High Court of Delhi way back in 1978 in the case of Seth Banarsi Dass Gupta. Having considered the matter in detail, the High Court of Delhi held that the "most appropriate" High Court for filing an appeal would be the one where the Assessing Officer is located. The decision was followed in Suresh Desai (supra) by Justice Lahoti (as he then was) and provided additional reasons in support of the same view. The interpretative choices are based on the following reasons, which we have reformulated as under:
1 As benches of the ITAT exercise juri iction over more than one state, Explanation to Standing Order No. 1 of 1954 and Standing Order No. 1 of 1967 issued under the Rules prescribe that, the juri iction of the ITAT should be based on the location of the Assessing Officer. The same principle should apply for determining the juri iction of the High Court for an appeal against the decision of the ITAT.
2 It would be appropriate for the ITAT to refer a question of law to the High Court within whose juri iction the Assessing Officer or the CIT which has decided the case is located, as these authorities would be bound to follow the decision of the concerned High Court.
ITA No. 1940 to 1942/Mum/2025 (A.Y. 2015-16 to 2016-17)
Arun Kumar Pillai
3This interpretation will also be in consonance with the expression "in relation with any State, the High Court of that State" provided in the definition of the "High Court" in Section 66(8) (under the present 1961 Act, it is Section 269).
4 The appeals and references cannot be made to a High Court only on the basis that a bench of the ITAT is located within the juri iction of the said High Court, as it will create an anomalous situation for that as well as other High Courts.
5 In view of the doctrine of precedents and the rule of binding efficacy of law laid down by a High Court within its territorial juri iction, a question of law arising for decision in a reference should be determined by the High Court which exercises territorial juri iction over the situs of the Assessing Officer (Suresh Desai).
The principle laid in Seth Banarasi Dass is followed in Suresh Desai & Associates v. Commissioner of Income Tax, Birla Cotton Spinning and Weaving Mills Ltd. v. Commissioner of Income Tax, Commissioner of Income-tax v. Digvijay Chemicals Ltd. and Commissioner of Income-tax v. Motorola India Ltd. It is interesting to note that this basic principle is accepted and abided as a precedent even in the two subsequent judgments of the High Court of Delhi in Sahara and Aar Bee. Thus, it is well-settled that the appellate juri iction of a High Court under section 260A is exercisable by a High Court within whose territorial juri iction the assessing officer is located.
The power of transfer exercisable under section 127 is relatable only to the juri iction 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 juri iction of a High Court. This can never be the intention of the Parliament. The juri iction 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.
In conclusion, we hold that appeals against every decision of the ITAT shall lie only before the High Court within whose juri iction 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 juri iction the Assessing Officer has passed the order, shall continue to exercise the juri iction of appeal. This principle is applicable even if the transfer is under Section 127 for the same assessment year(s)." 6. In view of the above and for the reasons stated hereinabove, it cannot be said that the High Court has committed any error in setting aside the order passed by the President of the ITAT transferring the appeals from the Bangalore Bench to the Mumbai Bench. We are in complete agreement with the view taken by the High court. Therefore, now the appeals will be heard by the ITAT, Bangalore Bench.
ITA No. 1940 to 1942/Mum/2025 (A.Y. 2015-16 to 2016-17)
Arun Kumar Pillai
In view of the above, the present Special Leave Petition deserves to be dismissed and is accordingly dismissed.”
11. It is now a settled proposition of law that the juri iction of the ITAT in adjudicating an appeal would lie within the juri iction of the Assessing Officer who had passed the assessment order which is the subject matter of appeal before the Tribunal, we, therefore, are inclined to dismiss these appeals filed by the Revenue with the liberty to the Revenue to file these appeals before the ITAT having juri iction over the assessing officer who had passed the assessment order in these cases, i.e., the Bangalore Bench.
The delay in filing the appeal shall be condoned as if the assessee has filed the appeal in the first instance within the period of limitation.
12. In the result, the appeal filed by the Revenue is dismissed for statistical purpose.
ITA No. 1941 & 1942/Mum/2025
13. The finding in ITA No. 1940/Mum/2025 shall apply mutatis mutandis to these appeals also.
14. In the result, all the appeals filed by the Revenue are dismissed for statistical purpose.
Order pronounced in the open court on 26.05.2025 (OM PRAKASH KANT)
JUDICIAL MEMBER
Mumbai; Dated: 26.05.2025
Karishma J. Pawar (Stenographer)
Copy of the Order forwarded to:
The Appellant 2. The Respondent 3. CIT- concerned
ITA No. 1940 to 1942/Mum/2025 (A.Y. 2015-16 to 2016-17)
Arun Kumar Pillai
DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt.