The division bench of the Supreme Court has held that appeals against Income Tax Appellate Tribunal (ITAT) order lies before the High Court in whose jurisdiction the Assessing Officer who passes the assessment order is situated.
The assessee, M/s. ABC Papers Limited is a company engaged in the manufacture of writing and printing paper. The case of the assessee was transferred to Central Circle, Ghaziabad under Section 127 of the Act and which passed an assessment order. Aggrieved, the assessee filed an appeal which came to be allowed by the Commissioner of Income Tax (Appeals). Against this appellate order, the Revenue preferred an appeal to ITAT, New Delhi, which dismissed the appeal. Thus, the Revenue approached the High Court of Punjab and Haryana as the cases of the assessee were re-transferred under Section 127 of the Act to the Deputy Commissioner of Income Tax, Circle-1(1), Chandigarh.
The High Court of Punjab and Haryana by relying on the decision in Commissioner of Income Tax v. Motorola India Ltd. refused to accept the appeal stating that the court does not have jurisdiction as the Assessing Officer who passed the initial assessment order is situated outside the jurisdiction of the High Court.The Revenue also filed an appealbefore the High Court of Delhi.The High Court of Delhi had taken a view that when an order of transfer under Section 127 of the Act is passed, the jurisdiction gets transferred to the High Court within whosejurisdiction the situs of the transferee officer is located.Aggrieved by the decisions of the High Courts refusing to entertain the appeals against the order of the ITAT revenue preferred appeal before the Supreme Court.
The Supreme Court observed that the jurisdiction of a High Court is not dependent on the location of the ITAT, as sometimes a Bench of the ITAT exercises jurisdiction over a plurality of states.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.
The Coram of Justices U.U. Lalit, S. Ravindra Bhat, and P.S. Narasimha have held that “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)”. The Supreme Court directed the High Court of Delhi to entertain the appeal and dispose of the appeal as per law.
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