Facts of the Case

  • The assessee, M/s Aar Bee Industries, filed returns of income for Assessment Years 2005-06, 2006-07 and 2008-09 before the Income Tax Officer, Jammu.
  • The assessee claimed deduction under Section 80-IB(4) of the Income Tax Act.
  • The Assessing Officer at Jammu disallowed the deduction claim.
  • The assessee challenged the assessment order before the Commissioner of Income Tax (Appeals), Jammu.
  • The Commissioner (Appeals) allowed the deduction claim relying upon Shree Balaji Alloys v. CIT (333 ITR 335).
  • Revenue preferred appeals before the Income Tax Appellate Tribunal, Amritsar Bench.
  • The Tribunal dismissed the Revenue’s appeals and upheld the assessee’s claim.
  • During pendency of proceedings, the assessee requested transfer of its case from Jammu to New Delhi.
  • Pursuant to an order under Section 127 of the Income Tax Act, the case was transferred from Income Tax Officer, Jammu to Income Tax Officer, New Delhi.
  • Revenue thereafter filed appeals before the Delhi High Court under Section 260A.
  • The assessee raised a preliminary objection challenging jurisdiction of the Delhi High Court.

Issues Involved

  1. Whether territorial jurisdiction under Section 260A of the Income Tax Act is determined by the original Assessing Officer who passed the assessment order or by the Assessing Officer having jurisdiction at the time of filing appeal.
  2. Whether transfer of a case under Section 127 of the Income Tax Act transfers all future proceedings including appeals under Section 260A.
  3. Whether Delhi High Court had jurisdiction to entertain appeals after transfer of the assessee's case from Jammu to New Delhi.

Petitioner’s Arguments (Revenue)

  • Revenue argued that the assessee’s entire case had been transferred from Jammu to New Delhi under Section 127 of the Income Tax Act.
  • The expression "case" under the Explanation to Section 127 includes past, present and future proceedings.
  • Since the assessee's case stood transferred to New Delhi, future proceedings including appeals under Section 260A would also fall within Delhi jurisdiction.
  • Revenue relied upon:
    • CIT v. Sahara India Financial Corporation Ltd. (294 ITR 363 Delhi)
  • Revenue submitted that the situs of the Assessing Officer at the time of filing appeal was the relevant factor.

Respondent’s Arguments (Assessee)

  • The assessee contended that:
    • Assessment orders were passed in Jammu.
    • Commissioner (Appeals) orders were passed in Jammu.
    • Appeals before ITAT were decided by Amritsar Bench exercising jurisdiction over Jammu and Kashmir.
  • Therefore, the High Court having jurisdiction over Jammu alone could entertain appeals.
  • Reliance was placed on:
    • Ambica Industries v. CCE (2007) 6 SCC 769
    • CIT v. Digvijay Chemicals Ltd. (294 ITR 359 Delhi)
    • Suresh Desai & Associates v. CIT (230 ITR 912 Delhi)
    • Seth Banarsi Dass Gupta v. CIT (113 ITR 817 Delhi)
    • CIT v. Motorola India Ltd. (326 ITR 156 P&H)

Court Findings / Court Order

The Delhi High Court held that:

  • Jurisdiction for filing an appeal under Section 260A is determined by the situs of the Assessing Officer having jurisdiction on the date of filing the appeal.
  • Transfer of a case under Section 127 includes transfer of all proceedings—past, present and future.
  • Once the assessee's case was transferred to New Delhi, jurisdiction for future proceedings also shifted.
  • The fact that original assessment proceedings were completed in Jammu or that the Tribunal sat at Amritsar was not relevant for determining jurisdiction at the time of filing appeal.
  • The Court followed its earlier decision in CIT v. Sahara India Financial Corporation Ltd.
  • Delhi High Court held that the appeals were maintainable before it.

Order:

The Court held the appeals maintainable and directed listing before the appropriate roster bench for admission and consideration of pending delay condonation applications.

Important Clarification

The judgment clarified that:

  • The determining factor for jurisdiction under Section 260A is the Assessing Officer having jurisdiction at the time the appeal is filed.
  • Transfer under Section 127 is not restricted merely to assessment proceedings.
  • The definition of "case" under Explanation to Section 127 extends to future proceedings including appellate proceedings.
  • Transfer of jurisdiction shifts the forum for future litigation under the Income Tax Act.

Sections Involved

  • Section 80-IB(4) – Deduction for certain industrial undertakings
  • Section 127 – Transfer of cases
  • Section 143(2)
  • Section 142(1)
  • Section 260A – Appeal to High Court
  • Rule 4(1) of Income Tax Appellate Tribunal Rules, 1963

Link to Download the Order https://delhihighcourt.nic.in/app/case_number_pdf/2013:DHC:3042-DB/BDA02072013ITA1482012.pdf

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