PCIT Chandigarh Vs ABC Papers Limited (Supreme Court)
Date-18th August 2022
Sub-The Hon’ble Supreme court in this case was called upon to decide which High Court would have the jurisdiction to entertain an appeal against a decision of a Bench of the ITAT exercising jurisdiction over more than one state, particularly when case(s) of same assessment year are transferred under Section 127 of the Act. Should it be the High Court of the State in which the ITAT is physically located or the High Court of the State in which the Assessee is residing and/or doing its business or the High Court where the Assessing Officer who assessed the assessee is located.

The court after noting statutory provisions as contained in the Income-tax Act 1961 noted that a judicial remedy must be effective, independent and at the same time certain. Certainty of forum would involve unequivocal vesting of jurisdiction to adjudicate and determine the dispute in a named forum. The court also noted the decision of the Supreme Court in the case of Seth Banarasi Das Gupta, where it was held that the most appropriate high court for filing an appeal would be the high court where the assessing officer is located. However, the court was confronted of the peculiar situation in a case where the jurisdiction is transferred from one AO to another AO in a different state u/s 127 of the Act. Finally, the court after noting law and several decisions in this regard , held that appeals against every decision of the ITAT shall lie only before the High Court within whose jurisdiction the Assessing Officer who passed the assessment order is situated. Even if the case or cases of an assessee are transferred in exercise of power under Section 127 of the Act, the High Court within whose jurisdiction the Assessing Officer has passed the order, shall continue to exercise the jurisdiction of appeal. This principle is applicable even if the transfer is under Section 127 for the same assessment year(s).

This decision will be important in deciding the jurisdiction of the High Court. However, applying the said decision in a faceless environment where all the orders are passed by NFAC, Delhi the jurisdiction probably will vest with Delhi High Court. The said issue has not been dealt with in the present case.

Ramesh Patodia
19-08-2022