ITAT Rules Delhi Benches Lack Jurisdiction Over Sahara India Appeals and COs Due to AO’s Location [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) ruled that it lacks jurisdiction over appeals and cross objections related to Sahara India due to the Assessing Officers’(AO) location.

The Revenue-appellant, filed several appeals against Sahara India, respondent assessee, which included Sahara India (Firm) and Sahara India. Some appeals were filed before the Lucknow Benches of the ITAT and others before the Delhi Benches, but all related to assessment orders passed by Assessing Officers based in Lucknow.

The President of the ITAT, by order dated 17.08.2006, transferred 218 such matters including cross objections and appeals under the Wealth Tax Act from the Lucknow Benches to the Delhi Benches under Rule 4 of the Income Tax Appellate Tribunal Rules, 1963.

During the hearing, the Bench raised a question on whether the Delhi Benches could hear these matters in view of the Supreme Court rulings in PCIT vs ABC Papers Ltd and PCIT vs MSPL Ltd.

The two member bench comprising Vikas Awasthy (Judicial Member) and Amitabh Shukla (Accountant Member) heard both sides and considered the Standing Order dated 16.09.1997 issued under the Income Tax Appellate Tribunal Rules. It was admitted that the 11 appeals and 9 cross objections were linked to assessment orders passed by AOs based in Lucknow.

As per the Standing Order, the jurisdiction of a Bench depended on the location of the AO, not the place of business or residence of the assessee.

The appellate tribunal referred to the Supreme Court’s rulings in PCIT vs ABC Papers Ltd. and PCIT vs MSPL Ltd., which clarified that even if a case was transferred under section 127 of the Act, the tribunal and the High Court under whose jurisdiction the original AO was located would retain jurisdiction. The Court made it clear that executive transfers could not shift appellate jurisdiction.

The tribunal rejected the argument that the Supreme Court’s ruling would not apply to appeals transferred to Delhi before the judgment, noting that the Court had only clarified the existing law.

In view of the facts, the Standing Order, and the Supreme Court decisions, the bench held that the Delhi Benches did not have jurisdiction over the appeals and cross objections. As a result, they were dismissed as not maintainable.

However, the tribunal allowed both the Department and the assessee to file fresh appeals or cross objections before the appropriate Bench in Lucknow within 60 days. Any delay in filing would be condoned.

In short,the appeals of the Revenue and the COs of the assessee were dismissed.

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