2023 (7) TMI 613 - AT - Income Tax

Appellate jurisdiction of ITAT - Appeal lies with ITAT Kolkata or ITAT Indore - approaching the wrong appellate jurisdiction - Power of President of Kolkata ITAT to transfer the appeal to another headquarter of ITAT in the country e.g. ITAT Indore - HELD THAT - Hon ble Supreme Court rendered in the case of Principal Commissioner of Income-tax vs. ABC Papers Ltd. 2022 (8) TMI 863 - SUPREME COURT said that the appellate jurisdiction of the Tribunal will be the geographical area where the AO is situated, namely, in this case the AO is situated at Indore, therefore, appellate jurisdiction of ITAT as well as of the Hon ble High Court will rest at Indore. President, ITAT, has no power to transfer appeal/s between one headquarters to other. The power of transfer available with the President is only qua a particular headquarters where large number of Benches are involved. For example in Kolkata there are three functioning Benches, then an appeal from Bench 1 to Bench 3 can be transferred by the President but it cannot be transferred from Kolkata to any other place in the country. We find that these appeals are not maintainable in the present form before the ITAT Kolkata. The assessee as well as the revenue are at liberty to approach the competent authority, namely, Indore, if so advised. Case appeals are being filed before the Indore Bench of the ITAT, then the period consumed in litigating at Kolkata benches be excluded from the period of limitation. The simple reason for this observation is that prior to the decision of the Hon ble Bombay High Court, the Hon ble President used to transfer appeals across Benches on the request of parties. The position of law by interpreting the ITAT Rules, has been laid out recently. Therefore, there should not be any miscarriage of justice qua the assessee by approaching the wrong appellate jurisdiction.

Summary

Issues Involved:
1. Jurisdiction of the Tribunal
2. Transfer of Appeals
3. Validity of Appeals before ITAT Kolkata

Summary:

Jurisdiction of the Tribunal:
The core issue pertains to the jurisdiction of the Tribunal to hear the appeals. The assessment order was passed by the Assistant Commissioner of Income Tax, Circle-5(1), Indore, indicating that jurisdiction over the assessee lies in Indore. The appellate jurisdiction of the Tribunal, as well as the Hon'ble High Court, rests at Indore, as per the judgment of the Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax vs. ABC Papers Ltd. and the Hon'ble Bombay High Court in the case of MSPL Limited vs. PCIT. The President of ITAT does not have the power to transfer appeals between different headquarters.

Transfer of Appeals:
The Tribunal examined the power of the President of ITAT under section 255 of the Income Tax Act and rule 4 of the Tribunal Rules. The Hon'ble Bombay High Court clarified that the President can only transfer appeals within the same headquarters and not to a different state or zone. The power to regulate its own procedure and the procedure of the Benches does not extend to transferring appeals across states. The Tribunal also noted that the convenience of the parties is not a valid ground for transferring cases out of a state.

Validity of Appeals before ITAT Kolkata:
The appeals were initially filed before the ITAT Kolkata Bench. However, as the jurisdiction lies in Indore, these appeals are deemed not maintainable before the ITAT Kolkata. The Tribunal observed that prior to the decision of the Hon'ble Bombay High Court, the President used to transfer appeals across Benches on request, but this practice has been recently clarified and restricted. Therefore, the parties are given two months to approach the ITAT Indore Bench, and the period consumed in litigating at Kolkata benches will be excluded from the period of limitation.

Conclusion:
In conclusion, the appeals were dismissed for statistical purposes as not maintainable before the ITAT Kolkata. The assessee and the revenue are at liberty to approach the competent authority at Indore. The order was pronounced in the Court on 13th July, 2023, at Kolkata.