1997 (7) TMI 100 - HC - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Patna High Court and its Ranchi Bench for cases under section 256 of the Income-tax Act and section 27 of the Wealth-tax Act.
2. Obligation of the Income-tax Appellate Tribunal to refer cases to the appropriate High Court.
3. Transfer of pending cases from Patna to Ranchi Bench of the Patna High Court.

Detailed Analysis:

Jurisdiction of the Patna High Court and its Ranchi Bench:
The petitioner sought a writ of mandamus directing the High Court of Judicature at Patna to transfer all pending matters under section 256 of the Income-tax Act and section 27 of the Wealth-tax Act from Patna to the Ranchi Bench. The petitioner argued that after the establishment of the permanent Ranchi Bench under the High Court at Patna (Establishment of a Permanent Bench at Ranchi) Act, 1976, the references should be made to the Ranchi Bench for cases arising in the districts of Hazaribagh, Giridih, Dhanbad, Ranchi, Palamau, and Singhbhum.

The court noted that section 256 of the Income-tax Act does not specify the territorial jurisdiction of the High Court for references. However, the jurisdiction should be determined based on the place where the assessee carries on business or resides, aligning with the jurisdiction of the Income-tax Officer and the place of assessment.

Section 2 of the 1976 Act and Rule 3 of the Patna High Court Rules mandate that cases arising in the specified districts should be filed and heard at the Ranchi Bench, unless the Chief Justice orders otherwise.

Obligation of the Income-tax Appellate Tribunal:
The court emphasized that the jurisdiction of the High Court for references under section 256 of the Income-tax Act should be determined by the location of the assessee's business or residence. The Appellate Tribunal must refer cases to the High Court having jurisdiction over the area where the assessee's business or residence is located.

The court referred to several precedents, including decisions from the Delhi High Court and the Karnataka High Court, which supported the view that references should be made to the High Court having jurisdiction over the place where the assessee's business or residence is situated.

Transfer of Pending Cases:
The petitioner also sought the transfer of all pending reference cases from Patna to the Ranchi Bench. The court refused this prayer, stating that all pending cases at the Patna High Court would continue to be heard and disposed of by the Patna High Court.

However, the court directed that henceforth, all reference applications under section 256 of the Income-tax Act and section 27 of the Wealth-tax Act arising from the assessment orders of officers within the territorial jurisdiction of the specified districts should be filed and referred to the Ranchi Bench.

Conclusion:
The court allowed the appeal in part, directing the Income-tax Appellate Tribunal and the Commissioner of Income-tax, Ranchi, to refer all future reference applications to the Ranchi Bench. The prayer for transferring pending cases from Patna to Ranchi was refused. The court emphasized the statutory jurisdiction of the Ranchi Bench over cases arising in the specified districts and clarified the procedural obligations of the Appellate Tribunal in making references.