Facts of the Case


  1. The Commissioner of Income Tax (Revenue) challenged an order dated 27.08.2010 passed by the Income Tax Appellate Tribunal under Section 254 of the Income Tax Act, 1961.
  2. The impugned order was passed by the Agra Bench of the ITAT.
  3. The assessment order giving rise to the dispute had also been passed at Agra.
  4. The Revenue approached the Delhi High Court by filing a writ petition under Article 226 of the Constitution seeking quashing of the ITAT order. 

Issues Involved

1. Whether the Delhi High Court had territorial jurisdiction to entertain a writ petition challenging an ITAT order passed by the Agra Bench?

2. Whether the petitioner should approach another competent legal forum having jurisdiction over the matter?

Petitioner’s Arguments

The Revenue (Commissioner of Income Tax) sought:

  • Quashing of the order dated 27.08.2010 passed by the Income Tax Appellate Tribunal under Section 254 of the Income Tax Act.
  • Grant of any other appropriate relief in favour of the petitioner in the facts and circumstances of the case.

Respondent’s Position

Although the brief order does not record detailed submissions of the respondent, Divya Jewellers Pvt. Ltd., the matter involved the challenge to an ITAT order passed by the Agra Bench, where the underlying assessment proceedings had also originated.

Court Findings

The Delhi High Court noted:

  1. The impugned order had been passed by the Income Tax Appellate Tribunal, Agra Bench.
  2. The assessment order had likewise been passed at Agra.
  3. In view of these circumstances, the Court observed that the petitioner should approach the appropriate legal forum having territorial jurisdiction over the matter.
  4. Since the cause of action substantially arose outside Delhi, it was not advisable for the Delhi High Court to entertain the writ petition.

Court Order

The Delhi High Court disposed of the writ petition with the observation that the petitioner should approach the appropriate legal forum competent to deal with the matter.

The Court did not adjudicate the merits of the tax dispute and confined itself to the issue of the proper forum and territorial jurisdiction.

Important Clarification

Principle Emerging from the Judgment

A challenge to an order of the Income Tax Appellate Tribunal should ordinarily be pursued before the High Court having territorial jurisdiction over the Tribunal Bench and the assessment proceedings connected with the dispute.

Where:

  • The ITAT order is passed outside Delhi; and
  • The assessment proceedings also arise outside Delhi,

the Delhi High Court may decline to entertain the writ petition and direct the parties to approach the competent jurisdictional forum.

Sections Involved

  • Section 254, Income Tax Act, 1961 – Orders of the Income Tax Appellate Tribunal (ITAT)
  • Article 226, Constitution of India – Writ Jurisdiction of High Courts

Link to download the order –https://delhihighcourt.nic.in/app/case_number_pdf/2011:DHC:18155/SKN09092011CW64672011_104215.pdf

 

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