2023 (9) TMI 1485 - AT - Income Tax

Appropriate High Court for disposal of the appeal - proper jurisdiction based on the location of AO passing the impugned order - HELD THAT - We note that the impugned assessment order is passed by the Ld. AO located at Jagadhri in the office of Dy. Commissioner of Income-tax, Circle Yamuna Nagar (Haryana) 135001. In a recent decision by the Hon ble Supreme Court in the case of PCIT Vs. ABC Papers Ltd. 2019 (3) TMI 501 - PUNJAB AND HARYANA HIGH COURT it is held that where even if case of an assessee was transferred in exercise of power u/s. 127, High Court within whose jurisdiction AO passed assessment order would continue to exercise due jurisdiction of appeal. According to the Hon ble Supreme Court, the appropriate High Court for disposal of the appeal would be the one where the case was assessed by the AO. Keeping the aforesaid judgment in view, fact in the present appeal by the revenue is that it is filed before the Kolkata Bench B of the ITAT though the assessment order is passed by the Ld. AO at the office of DCIT, Circle Yamuna Nagar, Circle Jagadhri, Haryana which does not fall with the jurisdiction of ITAT, Kolkata benches. We are constrained to transfer the present appeal from the Kolkata Bench of ITAT to the proper jurisdiction based on the location of AO passing the impugned order by taking into consideration the order of Hon ble High Court of Bombay in the case of MSPL Ltd. 2021 (5) TMI 739 - BOMBAY HIGH COURT In this case, the Hon ble Bombay High Court had an occasion to deal with the power to transfer pending appeal from one bench to another between the Tribunal, whether outside the headquarters in another state or from one bench to another bench within the same headquarters. While dealing with this issue, Hon ble Court analysed section 255 of the Act, more particularly sub-section (5) and (6) and arrived a conclusion that sub-section (5) cannot be interpreted in such a broad manner to clothe the President of the Tribunal, the jurisdiction to transfer a pending appeal from one bench to another bench outside the headquarters in any state. According to the Hon ble High Court in, sub-section (6) of section 255, no power is discernible that an order on the administrative side can be passed by the President, transferring live appeal from one bench to another bench that too in a different state outside the headquarters. Thus we find that the present appeal by the revenue is under improper jurisdiction, owing to the fact that impugned assessment order dated 31.03.2013, is passed by Ld. DCIT, Circle-Yamuna Nagar, Jagardhi, Haryana-135001. Accordingly, this present appeal is dismissed with the liberty to the Revenue to file a fresh appeal before the appropriate bench of the Tribunal having jurisdiction over the assessee along with petition for condonation of delay caused on this account. The period exhausted on account of filing the present appeal and its present disposal may be considered for condonation of delay in disposing the appeal, if filed by the revenue before the appropriate bench of ITAT having jurisdiction over the assessee. Appeal of the Revenue is dismissed.

Summary

Issues Involved:
1. Acceptance of explanation by CIT(A) regarding seized documents.
2. Relevance of seized documents to the assessee.
3. Opportunity for AO to examine the explanation on seized documents.
4. Validity of assessment due to non-service of notice u/s 153A and 143(2).
5. Jurisdiction of the appeal.

Summary:

1. Acceptance of Explanation by CIT(A) Regarding Seized Documents:
The Revenue contended that the CIT(A) erred in accepting the explanation furnished by the assessee regarding seized documents without giving reason, ignoring the fact that the same explanation was not accepted during the search and no such explanation was filed before the AO during assessment proceedings.

2. Relevance of Seized Documents to the Assessee:
The Revenue argued that the CIT(A) erred in believing the explanations of the assessee that the seized papers were not related to him, ignoring the fact that these documents were found and seized from the possession of the assessee during the search, violating Section 292C of the Income-tax Act.

3. Opportunity for AO to Examine the Explanation on Seized Documents:
The Revenue claimed that the CIT(A) erred in accepting the explanation of the assessee on seized documents that were not furnished before the AO without giving the AO an opportunity to examine the same under Section 292C and furnish his comments.

4. Validity of Assessment Due to Non-Service of Notice u/s 153A and 143(2):
The assessee raised additional issues under Rule 27 of the ITAT Rules, arguing that the assessment was invalid due to the non-service of notice u/s 153A and 143(2) and that the service of notice by affixture was invalid in law, making the entire assessment order liable to be quashed.

5. Jurisdiction of the Appeal:
The Tribunal noted that the assessment order was passed by the AO located at Jagadhri in the office of Dy. Commissioner of Income-tax, Circle Yamuna Nagar (Haryana). Referring to the Supreme Court decision in PCIT Vs. ABC Papers Ltd. (2022) and the Bombay High Court decision in MSPL Ltd. Vs. PCIT & Ors, the Tribunal concluded that the appeal was filed under improper jurisdiction as the assessment order was passed by the AO in Haryana, which does not fall within the jurisdiction of ITAT, Kolkata benches.

Conclusion:
The Tribunal dismissed the appeal due to improper jurisdiction, granting the Revenue liberty to file a fresh appeal before the appropriate bench of the Tribunal having jurisdiction over the assessee, along with a petition for condonation of delay. The period exhausted due to the current appeal's filing and disposal may be considered for condonation of delay in the fresh appeal.

Order Pronounced:
The order was pronounced in the open court on 06th September, 2023.