Facts of the Case

  1. The assessee filed returns of income for the relevant assessment years before the Income Tax Officer, Jammu.
  2. The assessee claimed deduction under Section 80-IB(4) of the Income-tax Act.
  3. The Assessing Officer at Jammu disallowed the deduction claimed under Section 80-IB(4).
  4. The assessee preferred appeals before the Commissioner of Income Tax (Appeals), Jammu.
  5. The Commissioner of Income Tax (Appeals) allowed the deduction by following the judgment in Shree Balaji Alloys v. CIT (333 ITR 335).
  6. Revenue filed appeals before the ITAT, Amritsar Bench, which were dismissed.
  7. During pendency of proceedings, the assessee sought transfer of its case from Jammu to Delhi.
  8. By order under Section 127, the case was transferred from Income Tax Officer, Ward-I(1), Jammu to Income Tax Officer, Ward-29(1), New Delhi.
  9. Revenue thereafter filed appeals before the Delhi High Court under Section 260A.
  10. The assessee raised an objection that the Delhi High Court lacked jurisdiction because the original assessment proceedings arose in Jammu.

Issues Involved

  1. Whether transfer of a "case" under Section 127 of the Income-tax Act transfers jurisdiction for future appellate proceedings under Section 260A.
  2. Whether the situs of the original Assessing Officer or the transferred Assessing Officer determines jurisdiction of the High Court.
  3. Whether the Delhi High Court possessed jurisdiction to entertain the Revenue’s appeals after transfer of the assessee's case from Jammu to Delhi.

Petitioner’s (Revenue’s) Arguments

  • The Revenue argued that the assessee’s entire case stood transferred from Jammu to New Delhi under Section 127 of the Income-tax Act.
  • Since the transfer order covered all proceedings—past, present and future—the jurisdiction for future proceedings including appeals under Section 260A also shifted to Delhi.
  • Reliance was placed on:
    • CIT v. Sahara India Financial Corporation Ltd. (294 ITR 363 Delhi)
  • It was argued that once the Assessing Officer changed to New Delhi, jurisdiction vested exclusively in the Delhi High Court.

Respondent’s (Assessee’s) Arguments

  • The assessee argued that:
    • Original assessment proceedings had been completed in Jammu.
    • Orders of the Commissioner (Appeals) were passed at Jammu.
    • ITAT Amritsar Bench had jurisdiction over Jammu & Kashmir.
  • Therefore, the High Court exercising jurisdiction over Jammu should hear the appeal and not the Delhi High Court.
  • Reliance was placed on:
    • Ambica Industries v. CCE (2007) 6 SCC 769
    • CIT v. Digvijay Chemicals Ltd. (294 ITR 359)
    • Suresh Desai and Associates v. CIT (230 ITR 912)
    • Seth Banarsi Dass Gupta v. CIT (113 ITR 817)
    • CIT v. Motorola India Ltd. (326 ITR 156)

Court Findings / Order

The Delhi High Court held:

  • The expression "case" under Explanation to Section 127 includes all proceedings relating to the assessee, whether past, pending or future.
  • Once the case stood transferred under Section 127, all future proceedings including appeals under Section 260A would follow the transferred jurisdiction.
  • The determining factor for jurisdiction is the situs of the Assessing Officer at the time of filing of the appeal.
  • On the dates when appeals were filed, the Assessing Officer of the assessee was situated in New Delhi.
  • Therefore, Delhi High Court possessed jurisdiction to entertain the appeals.
  • The preliminary objection raised by the assessee was rejected.
  • Appeals were held maintainable before the Delhi High Court.

Important Clarification

The Court clarified:

  • Jurisdiction under Section 260A is not governed by the location of the Tribunal.
  • Jurisdiction is determined by the location of the Assessing Officer at the time of filing of the appeal.
  • Transfer of a case under Section 127 results in transfer of jurisdiction for future proceedings.
  • Earlier judgments such as Digvijay Chemicals and Suresh Desai were distinguished because in those cases the relevant assessment records had not been transferred.
  • The Court preferred and followed its earlier decision in CIT v. Sahara India Financial Corporation Ltd. over the Punjab & Haryana High Court decision in Motorola India Ltd.

Sections Involved

  • Section 260A – Appeal to High Court
  • Section 127 – Transfer of Case
  • Section 80-IB(4) – Deduction for Industrial Undertakings
  • Section 143(2)
  • Section 142(1)
  • Section 120 of Income-tax Act, 1961

 

Link to Download the Order Delhi High Court Order – Commissioner of Income Tax-X vs M/s Aar Bee Industries

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