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Issues involved: Jurisdictional conflict between High Courts regarding section 256(2) application and transfer of assessment.
Summary: The application for recall of an ex parte order was made due to jurisdictional issues involving two High Courts. The assessee's assessments were transferred from Gauhati to Calcutta by an order passed on July 28, 1997. However, the reference application was made in regard to a decision by the Gauhati Bench of the Income-tax Appellate Tribunal, leading to a dispute over jurisdiction. The assessee argued that the appropriate Bench of the High Court at Assam should have jurisdiction in this case. The application under section 256(1) was rejected by the Gauhati Tribunal on September 17, 1997. The assessee relied on previous High Court decisions to support their contentions. The Revenue argued based on the Explanation of section 127 of the Income-tax Act, 1961, which controls assessment transfer powers. The argument was made that section 256(2) application should be made before the High Court at Calcutta due to the order of transfer of assessment. However, the Court disagreed with this argument, emphasizing that the High Court of one state should not interfere in matters of the Income-tax Appellate Tribunal of a different state. The Court concluded that the application for setting aside the ex parte order was allowed due to lack of territorial jurisdiction of the Calcutta High Court. The reference application was rejected on the same grounds. The order was set aside, and parties were directed to act on a signed copy of the order. The Revenue was given the liberty to continue proceedings in accordance with the law.
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