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2007 (5) TMI 208 - HC - Income TaxTerritorial jurisdiction of the High Court - transfer a case from one jurisdiction to another u/s 127(2) - Appeal u/s 260A of the Act is pending before the Lucknow Bench of the Allahabad High Court in respect of the order passed by the Tribunal - HELD THAT - The effect of the transfer of jurisdiction from Lucknow to Delhi specifically arises in the present case and we are of the view that the jurisdiction in respect of the assessee having been transferred to Delhi lock stock and barrel and all the records of the assessee also having been transferred from Lucknow to Delhi it is only the High Court in Delhi that can entertain an appeal u/s 260A of the Act directed against the order passed by the Tribunal. Our conclusion follows from a plain reading of the Explanation to section 127(4) of the Act as well as from the effect of the order passed by the CIT (Central) Kanpur u/s 127(2) of the Act. Consequently with effect from September 29 2005 (the date from which the order passed u/s 127(2) of the Act is enforced) the jurisdiction in respect of the assessee for future proceedings u/s 260A of the Act is with the Delhi High Court. Admittedly the present appeals have been filed after September 29 2005 and so they would be maintainable in this court and no other High Court. Thus we reject the contention of learned counsel for the assessee.
Issues Involved:
1. Territorial jurisdiction of the High Court. 2. Transfer of case under Section 127(2) of the Income-tax Act. 3. Substantial questions of law raised by the Revenue. Issue-wise Detailed Analysis: 1. Territorial Jurisdiction of the High Court: The primary issue raised by the assessee was whether the Delhi High Court had the territorial jurisdiction to entertain the appeals under Section 260A of the Income-tax Act, 1961. The assessment and appellate orders were passed in Lucknow, and an appeal was pending before the Lucknow Bench of the Allahabad High Court. The court held that it had the necessary jurisdiction due to an order passed under Section 127(2) of the Act, which transferred the case from Lucknow to Delhi. The court emphasized that the transfer included all proceedings under the Act, past, present, and future, which meant that the appeal under Section 260A could only be filed in Delhi. 2. Transfer of Case under Section 127(2) of the Income-tax Act: The court examined Section 127(2) of the Act, which empowers the Director-General, Chief Commissioner, or Commissioner to transfer cases between jurisdictions after providing a reasonable opportunity of being heard and recording reasons for the transfer. The court noted that a notice was issued to the assessee on June 20, 2005, proposing to transfer the case from Lucknow to Delhi for coordinated investigation and assessment. Despite the assessee's objections, the Commissioner of Income-tax (Central), Kanpur, ordered the transfer on July 29, 2005. This order was upheld by the Lucknow Bench of the Allahabad High Court and the Supreme Court, making it final and binding. Consequently, the jurisdiction for all future proceedings, including appeals under Section 260A, shifted to Delhi. 3. Substantial Questions of Law Raised by the Revenue: The court identified several substantial questions of law raised by the Revenue, which warranted the admission of the appeal. These included: - Section 68 Additions: Whether the Tribunal was correct in upholding the deletion of Rs. 8,55,25,37,618 added by the Assessing Officer under Section 68. - Interest on Deposits: Whether the Tribunal was correct in deleting the disallowance of Rs. 50,12,45,795 made by the Assessing Officer on account of interest on deposits. - Unexplained Cash Credits: Whether the Tribunal was correct in deleting the addition of Rs. 53,86,65,000 made under Section 68 on account of unexplained cash credits. - Expenses Pertaining to Earlier Years: Whether the Tribunal was correct in deleting the addition of Rs. 28,59,490 on account of expenses pertaining to earlier years. - Telecasting Fee: Whether the Tribunal was correct in deleting the disallowance of Rs. 5,01,750 out of telecasting fee being commission paid. - Guidelines Compliance: Whether the Tribunal was correct in holding that the Assessing Officer did not follow the guidelines given by the Commissioner of Income-tax (Appeals). - Remand Request: Whether the Tribunal was correct in declining the Revenue's request to remand the matter to the Assessing Officer. - Assessment Order Classification: Whether the Tribunal was correct in directing the Assessing Officer to treat the assessment order under Section 143(3) instead of Section 144. - Disposal of Appeal as Infructuous: Whether the Tribunal was justified in disposing of the Revenue's appeal as infructuous in view of an earlier order. - Perverse Order: Whether the Tribunal's order dated July 22, 2005, was perverse in law. The court admitted the appeal and framed the above questions of law for consideration. The paper books were to be filed in accordance with the High Court rules, with one set of paper books for all three appeals. Conclusion: The Delhi High Court held that it had the territorial jurisdiction to entertain the appeals under Section 260A due to the transfer of the case from Lucknow to Delhi under Section 127(2) of the Income-tax Act. The court admitted the appeal on several substantial questions of law raised by the Revenue, requiring a detailed examination of the Tribunal's order.
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