2006 (1) TMI 223 - AT - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Tribunal to hear the appeal.
2. Validity of the miscellaneous petition filed by the Revenue.
3. The effect of the Revenue's participation in the proceedings.
4. Interpretation of legal provisions and precedents cited.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal to Hear the Appeal:
The Revenue argued that the Tribunal, Visakhapatnam Bench, lacked jurisdiction to hear the appeal in ITA No. 136/Vizag/2005 because the jurisdiction of Khammam District lies with the Hyderabad Bench as per the standing order under ITAT Rules, 1963. The jurisdiction is determined by the location of the office of the Assessing Officer (AO), which was in Khammam District. The Tribunal agreed, stating, "the office of the AO was located in Khammam District, which is within the jurisdiction of Hyderabad Bench of Tribunal."

2. Validity of the Miscellaneous Petition Filed by the Revenue:
The Revenue filed a miscellaneous petition to recall the Tribunal's order, arguing that the order was passed without jurisdiction. The Tribunal noted that the President of the Tribunal had issued a special order directing the Visakhapatnam Bench to hear the miscellaneous petition. The Tribunal held, "In view of above special order, we hold that the Bench at Visakhapatnam... had the jurisdiction to hear this miscellaneous petition."

3. The Effect of the Revenue's Participation in the Proceedings:
The assessee contended that since the Revenue participated in the proceedings before the Tribunal, they could not now challenge the jurisdiction. The Tribunal rejected this argument, stating, "while deciding the jurisdiction of the authority, the participation by the parties in the proceedings before them is irrelevant." The jurisdiction must be determined by the standing order, not by the actions of the parties.

4. Interpretation of Legal Provisions and Precedents Cited:
The Tribunal examined various legal provisions and precedents cited by both parties. It referred to Section 255(5) of the IT Act and Rule 4 of the ITAT Rules, 1963, which empower the Tribunal to regulate its own procedure and specify the jurisdiction of its Benches. The Tribunal also considered several case laws:

- CIT vs. Madanlal & Co.: The Tribunal noted that the Karnataka High Court emphasized determining jurisdiction based on the location of the assessing authority.
- India Glycols Ltd. & Anr. vs. CIT: The Tribunal found the facts of this case different and not applicable to the present issue.
- Seth Banarsi Das Gupta vs. CIT: The Tribunal observed that this case supported the Revenue's position that jurisdiction should be determined by the location of the AO.

The Tribunal concluded that the Visakhapatnam Bench lacked jurisdiction over the appeal, stating, "we recall the order of the Tribunal in ITA No. 136/Vizag/2005 and direct the registry to transfer it to the Tribunal, Hyderabad Benches, for adjudication in accordance with law."

Conclusion:
The Tribunal allowed the miscellaneous petition filed by the Revenue, recalling its earlier order and directing the case to be transferred to the Hyderabad Bench for proper adjudication. The decision was based on the jurisdictional rules specified under ITAT Rules, 1963, and the location of the AO's office.