M/S.MANAPPURAM HOTELS P. LTD,THRISSUR vs. THE ACIT, THRISSUR

3. We note that registry has noted a delay of 16 days in filing the present appeal before the Tribunal. In this respect, it is observed that assessee has filed an application for condonation of the said delay along with an affidavit. Upon perusal of the same and hearing both sides, we deem it fit to condone the delay on the ground that there was sufficient cause for the said delay. Accordingly, we condone the delay to take up the matter for adjudication.

4. This is an appeal which has come up for hearing after its transfer from ITAT, Cochin Bench vide order dated 21.06.2024 by Hon'ble President of ITAT. Contents of the order passed by Hon'ble President, Manappuram Hotels P. Ltd., AY – 2007-08 ITAT accepting the request for transfer of appeal by the assessee from ITAT, Cochin to ITAT, Mumbai are reproduced below: “Regarding - Request for transfer of Appeal in the case of M/s. Mannapuram Hotels Pvt. Ltd.

This appeal is placed before me in pursuance of order dated 29.02.2024 passed by the Bench at Cochin holding that on the basis of the order passed by the Assessing Officer at Mumbai, the appeal is required to be transferred and heard at ITAT Mumbai Benches.

3. It is not in dispute that the impugned order out of which the present appeal arose is passed by the Assessing Officer at Mumbai. In that view of the matter, the learned DR submitted that the appeal will have to be transferred and heard at ITAT Mumbai Benches. The learned counsel for the assessee did not dispute that the territorial jurisdiction of the appeal would lie before ITAT Mumbai Benches on the basis of the decision of Hon'ble Supreme Court in Principal Commissioner of Income-tax vs ABC Papers Ltd. 447 ITR 1 (SC)).

4.1. Prior to this order by Hon'ble President, the Co-ordinate Bench of ITAT, Cochin had passed an interim order dated 29.02.2024 qua its jurisdiction. In the said order, all the relevant facts and history of the case were captured which are extracted below: “2. The brief facts of the case are that in appellate proceedings before the Id. CIT(A), the assessee's counsel, Shri Vipin K.K. CA, conveyed thereto the assessee's directions for not pressing each of the three Grounds of Appeal raised before him. The Id. CIT(A), reproducing the said communication in the impugned order (at para 5), dismissed the assessee's appeal as not pressed. The assessee, a company in hotel business, challenges the same before us on the ground that it was incumbent on the Id. CIT(A), being the first appellate authority under Act with coterminous powers, to have decided the appeal on merits. This is particularly so as the assessee had not been represented before the assessing authority as well. Explaining this aspect of the matter, Shri Suresh, the learned counsel for the assessee before us, would submit that the assessee had, in response to s. 142(1) notice dated 17/6/2009 by the Dy. CIT- 9(2), Mumbai, requested, vide letter dated 23.6.2009, for transferring it's case record to Trichur, Kerala, where the assessee's registered office had been shifted to since 05.02.2004 and, further, where it had accordingly been filing it's returns of income since AY 2003

04. (PB pgs. 34,53). Subsequent enquiry dated 08/9/2009 by the office of the Additional CIT, Range 1, Thrissur, in the matter was also met Manappuram Hotels P. Ltd., AY – 2007-08 by the assessee vide letter of even date (PB pgs. 56 & 55). No order u/s. 127 of the Act was, however, received by the assessee, which position continues to date. Instead, it received an assessment order dated 16/12/2009, making, as against nil returned income, a high pitched assessment at Rs. 42.74 lacs.

At this stage, the parties were required to make arguments with respect to the jurisdiction of this Bench of the Tribunal to hear the instant appeal, with particular reference to the decision in Pr. CIT v. ABC Papers Ltd. [2022] 447 ITR 1 (SC), allowing time for the same. The assessee sought to distinguish the said decision, stating that it was principally in respect of the jurisdiction of the Hon'ble High Court, with reference to that of the Tribunal being incidental. The jurisdiction of a Bench of the Tribunal, a unified body, to hear an appeal lies with the President of the Tribunal under rule 4 of the Income Tax (Appellate Tribunal) Rules, 1963 (ATR). The same had in fact been exercised on 08/5/2007 (PB-2, pg. 5), transferring the Tribunal's appeal (ITA 4663/Mum/2000) for AY 1997-98 to the Cochin Bench. The assessee- company had no establishment in Mumbai, so that the Bench may hear the matter.

3.1 The issue on merits would be the maintainability in law of the impugned order in the given facts and circumstances of the case. In this regard Sh. Suresh could not satisfactorily answer the query by the Bench as to the assessee's non- response to the notices dated 01/10/2009 and 04/11/2009, that followed the notice dated 17/6/2009, accompanied by questionnaire/s, nor indeed show us that the letter dated 08.09.2009 by the absafore by the Addl. CIT, Range-1, Thrissur, was, as claimed, responded to; the letter at PB pg. 55) being neither dated nor receipted. A 3.2 Be that as it may, this Bench has no appellate jurisdiction over the instant appeal inasmuch as the same is with reference to the situs of the AO, i.e., the Bench of the Tribunal under whose territorial jurisdiction the office of the AO is situate. Our decision would though be subject to any special order passed by the President of the Tribunal; it being one unified body. That the assessee's AO as on the date of issue of notice u/s. 143(2) of the Act on 17/9/2008 was the Dy. CIT 9(2), Mumbai, is apparent inasmuch as the said notice by him would only be on the basis of the assessee's address as per it's PAN data base. The assessee admittedly did not object thereto within 30 days, as required u/s. 124(2) of the Act. The jurisdiction of the Dy. CIT-9(2), Mumbai to act as it's AO gets thus established. That being the case, only the Mumbai Bench of the Tribunal, holding territorial jurisdiction over Dy. CIT- 9(2), Mumbai, is entitled to hear the appeal arising out of his order. This, as explained in ABC Papers Ltd. (supra), is as it was imperative for judicial propriety that all authorities below the Hon'ble High Court operate as one unit. Not so interpreting; the order of the High Court being binding on authorities working under it's jurisdiction (Suresh Desai & Ass. v. CIT [1998] 230 ITR 912 (Del)), would be detrimental to consistency and systematic development of law, of prime concern in jurisprudence. That the jurisdiction of the Tribunal is, under the scheme of the Act, with reference to the jurisdiction of the AO, stands abundantly clarified, for which reference be made to paras 13.2, 13.3, 17 & 29 of the said decision, also read out during hearing. This view stands reiterated in Pr. CIT v. MSPL [2023] 454 ITR 280 (SC), affirming the decision by the Hon'ble High Court, reported at [2021] 436 ITR 199 (Bom), setting aside the order by the President of this Tribunal transferring an appeal from one Bench of Manappuram Hotels P. Ltd., AY – 2007-08 the Tribunal to another consequent to the transfer of an assessee's case u/s. 127 of the Act, which was found to be not a relevant consideration. 3.3 The hearing, accordingly, was not proceeded with; the Bench observing that it would pass an interim order qua jurisdiction. The same, in terms of the law laid down, vests with the Mumbai Bench of the Tribunal. The appeal file shall accordingly be transferred by the Registry to the Mumbai Benches of the Tribunal for being taken on its records and listing for hearing, including on the condonation of the delay attending the filing of the appeal. The assessee is at liberty, as Shri Suresh would indicate, to apply to the Hon'ble President for retransfer of this appeal to the Cochin Bench u/r. 4 of the ATR. We order accordingly.”

4.2. Thus, from the above extractions, we note that there is no dispute that the impugned order out of which this appeal has arisen is passed by the ld. Assessing Officer at Mumbai. Accordingly, the territorial jurisdiction for the appeal would like before ITAT Mumbai Benches in view of decision of Hon'ble Supreme Court in the case of PCIT vs. ABC Papers Ltd. 447 ITR 1(SC). This appeal thus came up for hearing before us.

5.1. Facts briefly stated in this order in para 2 are that assessee is engaged in the business of hotels. Impugned order u/s.144 was passed by observing that assessee did not attend any proceedings and no submissions were made despite several opportunities. Ld. Assessing Officer noted an increase of Rs.42,74,025/- towards unsecured loans which was added u/s.68 as cash credit since assessee failed to discharge his onus of establishing identity and credit worthiness of the lenders and genuineness of the transactions. Ld. Assessing Officer also disallowed the loss of Rs.34,19,342/- claimed by the assessee in its return of income by holding that assessee could not prove the 5.2. Ld. CIT(A) after considering the submissions made by the Authorised Representative of the assessee summarily dismissed the appeal by stating that assessee had chosen not to press the grounds of appeal raised in the appeal memo. His observations and findings in this respect contained in Para – 5 and 6 are extracted below:

“In a letter filed by the Authorized Representative on behalf of the appellant on 13- -2018, the Authorized Representative submitted as follows:- "As directed by the assesse we are not pressing following grounds .

1. Ground No.1: Challenge to Order u/s.144. 2. Ground No.2: Addition under section 68. 3. Ground No.3: Disallowance of all the expenses."

6. Vide the above letter, the appellant has chosen not to press any of the three grounds filed along with appeal memo: In view of this, all the three grounds are dismissed.

7. In the result, the appeal is dismissed.”

5.3. In the present appeal before the Tribunal, the core issue so far dealt with has been in respect of jurisdiction of the appellate authority to adjudicate upon the grounds raised by the assessee and for want of correct jurisdiction, it has moved places. While perusing the order of the ld. CIT(A), we are once again constrained to look into the jurisdiction of the ld. CIT(A) who dismissed the appeal in the manner in which it has been done. In this respect, it is important to take note of notice of demand u/s.156 of the Act, dated 16.12.2009 issued by DCIT–9(2), Mumbai, raising a demand of Rs.19,13,390/-. In the said notice of demand in para -6, assessee has been intimated to present an appeal, if it so desires, against the said demand before “CIT(A)-20”. The said demand notice is extracted below:

5.4. Thus, from para-6 of the above notice, it is very clear that first appeal by the assessee ought to have been filed before CIT(A)-20 and it must be relating to Mumbai jurisdiction since notice of demand is issued by DCIT-9(2), Mumbai and cannot be inferred to refer to CIT(A), Thrissur, where the assessee had infact filed its appeal and the matter has been adjudicated upon as discussed above. On this set of facts, the primary question which comes to our mind is, whether ld. CIT(A), Thrissur had the jurisdiction to admit the said appeal and adjudicate upon it to dismiss it, by observing as to assessee not choosing to press the grounds raised in the appeal memo.

Manappuram Hotels P. Ltd., AY – 2007-08 5.5. In this context, it is important to take note of provisions contained in section 249 which requires admission of the appeal. It is incumbent upon ld. CIT(A) to first consider admissibility of the appeal which lay before him so as to be in compliance with the provisions of the Act and only after its admission that the subsequent step of adjudication can be taken up. To our mind, ld. CIT(A), Thrissur has not looked into the fact of admissibility of the appeal which was filed by the assessee despite specific mention of “CIT(A)-20” in the notice of demand issued by DCIT- 9(2), Mumbai. Accordingly, in the given set of facts and applicable law, we find it appropriate to remit the matter back to the file of ld. CIT(A), to decide on the admissibility of the appeal and thereby accordingly adjudicate in accordance with the provisions of law. Ld. CIT(A) may consider granting liberty to the assessee of filing a fresh appeal under the proper jurisdiction and condoning the delay for such filing in accordance with the provisions of law.