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2007 (10) TMI 384 - HC - Income TaxTerritorial Jurisdiction- A conjoint reading of sections 120 and 127 of the Income Tac Act, 1961, makes it evident that director general or chief Commissioner or commissioner empowered to transfer any case from one or more Assessing officer subordinate to him to any other Assessing Officer. Jurisdiction determined by the location of office of Assessing Officer. Return filed, assessment, revision and appeal to Punjab. Held that- not relevant. Punjab and Haryana High Court has no jurisdiction to hear case. Dismissing the appeal.
Issues Involved:
1. Whether the Tribunal erred in law in holding that the order of the Assessing Officer was not prejudicial and erroneous to the interests of the Revenue concerning the relief under section 80HHC of the Income-tax Act, 1961. 2. Whether the Tribunal erred in law in vacating the order under section 263 of the Income-tax Act, 1961. 3. Preliminary objection regarding the maintainability of the appeals and the territorial jurisdiction of the High Court. Issue-wise Detailed Analysis: Issue 1: Tribunal's Error Regarding Section 80HHC Relief The primary issue was whether the Tribunal erred in law by holding that the order of the Assessing Officer was not prejudicial and erroneous to the interests of the Revenue when the relief under section 80HHC of the Income-tax Act, 1961, was allowed on the total income without adjusting the brought forward loss and unabsorbed depreciation of the earlier years. The assessee filed its return for the assessment year 1996-97, declaring an income of Rs. 3,50,30,300. The return was processed under section 143(1)(a) of the Act, and after scrutiny, the Assessing Officer disallowed certain losses and assessed the income at Rs. 4,21,54,440. The Commissioner of Income-tax, Bangalore, held that the relief under section 80HHC should be allowed on the profits of the current year as reduced by the carried forward business loss and unabsorbed depreciation, finding the Assessing Officer's order erroneous and prejudicial to the interests of the Revenue. The Tribunal, however, allowed the assessee's appeal, leading to the present appeal by the Revenue. Issue 2: Tribunal's Error in Vacating Section 263 Order The second issue was whether the Tribunal erred in vacating the order under section 263 of the Income-tax Act, 1961. The Commissioner of Income-tax had directed the Assessing Officer to modify the assessment to reflect the correct deduction under section 80HHC, which was initially allowed before setting off the unabsorbed loss and depreciation, resulting in excess relief to the assessee. The Tribunal vacated this order, prompting the Revenue to challenge the Tribunal's decision. Issue 3: Preliminary Objection on Maintainability and Jurisdiction The preliminary objection raised by the assessee's counsel concerned the maintainability of the appeals and the territorial jurisdiction of the High Court. The counsel argued that the assessee was assessed in Bangalore, and all relevant orders, including the assessment and revisional orders, were passed by authorities in Bangalore. The appeals were also decided by the Bangalore Bench of the Tribunal. The counsel emphasized that the crucial factor for determining the territorial jurisdiction is the location of the Assessing Officer who passed the assessment order, which in this case was Bangalore. The Revenue's counsel argued that the jurisdiction should be determined by the location of the assessee's head office, which had shifted to Gurgaon, and that the case was transferred to Gurgaon under section 127 of the Act. However, the court held that the jurisdiction is determined by the location of the Assessing Officer who passed the assessment order, and since all relevant orders were passed in Bangalore, the High Court of Punjab and Haryana did not have territorial jurisdiction over the matter. Conclusion: The court sustained the preliminary objection regarding the lack of territorial jurisdiction and dismissed the appeal, directing the Revenue to file the appeals before the competent court of jurisdiction. The court did not opine on the merits of the controversy due to the preliminary objection being upheld.
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