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Facts
The Revenue filed an appeal before the ITAT Delhi Bench against an order from the CIT(A), which originated from a rectification order passed by the DCIT, Circle 7(1)(2), Mumbai. The assessee contended that the appeal should lie before the Mumbai Bench, citing Supreme Court rulings on jurisdiction, despite the case being subsequently transferred to Delhi. The Revenue argued that the transfer of jurisdiction to Delhi allowed the appeal to be filed there.
Held
Following the Supreme Court's decision in Pr. CIT Vs. ABC Papers Ltd., the Tribunal held that jurisdiction for appeals against an AO's order lies with the ITAT bench corresponding to the Assessing Officer who originally passed the order. Since the rectification order was issued by a Mumbai AO, the appeal was not maintainable before the ITAT Delhi Bench, regardless of the subsequent transfer of assessee's jurisdiction.
Key Issues
Whether the ITAT Delhi Bench had jurisdiction to entertain an appeal when the original rectification order was passed by an Assessing Officer in Mumbai, even after the assessee's jurisdiction was transferred to Delhi.
Sections Cited
Section 154, Section 127(2), Section 260A, Section 269
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Income Tax Appellate Tribunal, DELHI BENCH “E”NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI PRADIP KUMAR KEDIA
Revenue by Shri Mahesh Kumar, CIT DR Assessee by Shri Ganesh Rajgopalan, CA सुनवाईक�तारीख/ Date of hearing: 12.03.2024 27.05.2024 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.
This appeal is filed by the Revenue against the order passed by the Ld.CIT(Appeals)-NFAC, Delhi dated 11.09.2023 for the AY 2013-14 and arising out of the 154 order dated 16.10.2018 passed by the DCIT, Circle 7(1)(2), Mumbai.
I.T.A.No.3208/Del/2023
The Ld. Counsel for the assessee, at the outset, submits that the Revenue has wrongly filed appeal before the Delhi Bench of the Tribunal instead of the Mumbai Bench of the Tribunal as the Assessing Officer who passed the order u/s 154 of the Act is the DCIT, Circle 7(1)(2), Mumbai and the appeal lies only before the Mumbai Bench of the Tribunal and not before Delhi Bench of the Tribunal.
The Ld. Counsel for the assessee further submits that the Hon’ble Supreme Court in the case of PCIT Vs. MSPL Limited reported in 150 taxmann.com 44, following its own ruling in Pr. CIT Vs. ABC Papers Ltd. (141 taxmann.com 332) held that the Tribunal and the jurisdiction of the concerned High Court would depend on the AO who pass the order. Ld. Counsel, therefore, submits that since in the assessee’s case the AO who completed the assessment and passed rectification order u/s 154 dated 16.10.2018 is DCIT, Circle 7(1)(2), Mumbai the appeal to Tribunal lies only before the Mumbai Bench of the Tribunal and not before the Delhi Bench of the Tribunal, even though the case was transferred subsequently to Delhi.
Ld. DR submits that though the rectification order u/s 154 dated 16.10.2018 was passed by the DCIT, Circle 7(1)(2), Mumbai 2
I.T.A.No.3208/Del/2023 the case was transferred by the Pr. CIT-8, Mumbai through order u/s 127(2) of the I.T. Act dated 14.02.2023 transferring the case of the assessee to the jurisdiction of the Assessing Officer who is holding charge in DCIT, Circle 15(1), Delhi. Therefore, the Ld. DR submits that the appeal was filed on 10.11.2023 by the present Jurisdictional Assessing Officer of the assessee.
Heard rival submissions and perused the orders of the authorities below.
In the present appeal, the Revenue challenged the order of the Ld.CIT(Appeals)-NFAC, Delhi which order was passed pursuant to 154 order dated 16.10.2018 passed by the DCIT, Circle 7(1)(2), Mumbai. The present appeal was filed by the DCIT, Circle 13(1), New Delhi before the Tribunal on 10.11.2023 pursuant to the transfer of jurisdiction of the assessee to Circle 15(1), Delhi by the Pr. CIT-8, Mumbai by order dated14.02.2023 u/s 127(2) of the I.T.
Act.
In the case of Pr. CIT Vs. ABC Papers Ltd. (447 ITR 1), the Hon’ble Supreme Court held as under: -
“31. 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 3
I.T.A.No.3208/Del/2023 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 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 and Aar Bee 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).”
I.T.A.No.3208/Del/2023
As could be seen from the above, the Hon’ble Supreme Court held that appeals against every decision of the ITAT shall lie only before the High Court within whose jurisdiction the AO who passed the assessment order is situated. If we apply this principle an appeal to High Court challenging the order of the Assessing Officer i.e. DCIT, Circle 7(1)(2), Mumbai would lie only to the Hon’ble High Court of Bombay. In the circumstances, the second Appellate Authority i.e. ITAT would be Mumbai Bench of the Tribunal and not the Delhi Bench of the Tribunal. Therefore, the appeal filed by the Revenue against the order of the DCIT, Circle 7(1)(2), Mumbai is not maintainable before the ITAT, Delhi Bench. Thus, we hold that this appeal of the Revenue cannot lie before the ITAT Delhi Bench and accordingly this appeal is dismissed as not maintainable. However, the Revenue is at liberty to file appeal in the Mumbai Bench of the Tribunal, if so advised.
In the result, appeal of the Revenue is dismissed as not maintainable.
Order pronounced in the open court on 27/05/2024