TMI Blog2018 (5) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... assurance so graciously extended by the learned Departmental Representative, not to take any coercive measures for recovery or collection of the outstanding disputed demands till the time the present stay applications are disposed of by the Tribunal. - S. A. Nos. 41 to 45/Ahd/2018 - - - Dated:- 11-5-2018 - Pramod Kumar AM And Madhumita Roy JM S N Soparkar and Parin Shah for the applicant V K Singh and R C Dande for the respondent ORDER Per Pramod Kumar, AM 1. By way of these five stay applications, the assessee applicant seeks a stay on collection/recovery of ₹ 187.30 crores plus interest for the period of 5 years, in the demands impugned in five different appeals before us, as detailed below : Assessment Year ITA No. Total Demand as on 02.12.2012 (Rs.) Payment made by the assessee Outstanding demand (Rs) (excluding interest from 2.12.2012 till now) 2008-09 2680/Ahd/2012 30,51,41,410 4,21,25,681 26,30,15,729 2009-10 2681/A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hmedabad. Learned counsel submits that so far as determination of jurisdiction of the ITAT bench is concerned, it has to be essentially based on the location of the office of the authority whose order is impugned in appeal before us. His line of reasoning is that. Learned counsel points out that under rule 4(1) of the Income Tax Appellate Tribunal Rules 1963, a bench shall hear and determine such appeals and applications made under the Act as the President may, by general or special order, determine , and then he takes us through the notification no. F No. 63-Ad(AT) 97, dated 16th September 1997- as amended up to date, and points out that according to the said order all appeals and applications from the Districts, States and Union Territories specified in column 3 shall be, with effect from 1st October 1997, be heard and determined by the benches specified in column 2 of the table . It is his contention that this order uses to the expression all appeals and applications from the specified places, and, therefore, what really matters is that the location of the office of the authority passing the orders, impugned in appeals or relatable to applications, and not that of the office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he has done all that he could have done for early disposal of these appeals, but all in vain. When a stay is granted to the assessee for a limited time, when the related appeals have not been disposed of despite due cooperation from the assessee, and when there is no material change in the facts and circumstances so as to disentitle him to further stay, essentially the stay so granted has to be extended suitably. Learned Departmental Representative does not have much to say. As to the question of jurisdiction, he leaves the matter to the bench. As regards the question as to whether this is a fit case for stay or not, learned Departmental Representative submits that the apprehensions of the assessee are unjustified as there is not even an effort to collect or recover the outstanding demands. Unless no such recovery action is initiated by the tax authorities, the apprehensions of the assessee are justified. In any event, according to the learned Departmental Representative, the disposal of appeals is getting inordinately delayed, the outstanding tax demands on the assessee are huge, and the assessee must, therefore, pay a reasonable part of the demand rather than making the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Commissioner of Income Tax, Circle 1(1), Gurgaon. The question naturally arises as to how the appellate jurisdiction is to be decided- on the basis of the jurisdiction of the Assessing Officer at the point of time when the assessment was framed, at the point of time when appeal is filed or at the point of time when appeal is to be heard. The expression used in the notification issued by the Income Tax Appellate Tribunal is that The ordinary jurisdiction of the bench will be determined .. by the location of the Assessing Officer . It does not refer to the location of the Assessing Officer at the point of time when assessment was framed or at the point of time when the appeal was filed, or, for that purpose, at any specific point of time. All that the notification refers to is the location of the Assessing Officer and the jurisdiction is the jurisdiction to, as rule 4(1) of the ITAT Rules 1963 states, hear and determine such appeals and application made under the (Income Tax) Act . In our considered view, therefore, it is the location of the Assessing Officer at the point of time when the Tribunal is to hear and determine such appeals and applications which is relevant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early be an incongruity, and the cross appeals cannot anyway be heard at different places in the light of the law laid down by Hon ble Supreme Court in the case of CST Vs Vijay International Udyog [(1985) 152 ITR 111 (SC)] which requires cross appeals to be heard together. The appeals for different assessment years having common issues should ideally be heard together, but then when benches at different places have jurisdiction over hearing over these different assessment years, such consolidation is not possible at all. As to what should be done in such a situation, we find guidance from the principle embedded in the latin maxim ut res magis valeat quam pereat which is very well explained in Sampat Iyengar s Law of Income Tax [ISBN 978-93- 5139-426-6; Volume 1 at page 104] as follows: Utres magis valeat quam pereat It is a crucial rule of interpretation of statutes that the words of the statute should be given a sensible meaning so as to make them effective. (CIT v Jayashree Charity Trust (1986) 159 ITR 280 (Cal). A construction which would defeat the very object of the legislature should be avoided. (CIT v Horkeri (LN) (1986) 162 ITR 513 (Kar); CIT v Shambulal Nathala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction over the Assessing Officer concerned, and since there can only one Assessing Officer, as held by Hon ble Delhi High Court in the case of Aar Bee Industries (supra), that Assessing Officer is the present Assessing Officer located in the jurisdiction of Delhi benches. When we put our above understanding to the parties, in the hearing on 9th May 2018, learned counsel submitted that our reasoning is flawed for more reasons than one. While he did abandon his plea for deciding on the basis of the location of the CIT(A) passing the order impugned in appeal, he, nevertheless, submitted that the appeal before us is with respect to an order passed by the Assessing Officer and, therefore, the appeal has to be defended by that Officer alone. The mere fact that the jurisdiction of the Assessing Officer is shifted subsequently does not alter this fundamental position. It is then submitted that even when the appeals with respect to different years are with different benches of the Tribunal, this is perfectly fine, unless otherwise directed by the President of the Tribunal, since the related Assessing Officers will be located in the jurisdictions of such benches and they will be able to defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but then that cannot be a consideration in deciding the jurisdiction of the bench which is to hear the matter. Learned CIT (DR) submits that while he is not really very well conversant with complete details of this case, in principle, he does not see any reasons for not transferring the appeal to the benches having jurisdiction over the place where the present Assessing Officer is situated. As regards the plea about the special order of the President, as a result of rejection of the request for transfer of appeal, learned CIT (DR) declines to join the issue and leaves it to the bench. In brief rejoinder, learned senior counsel once again reiterates his stand and submits that the jurisdiction to hear these appeals vests with Ahmedabad benches only. We are thus urged to hear the appeals at the earliest, and, in the meantime, deal with the stay applications filed by the assessee. Learned senior counsel also filed before us a decision of the coordinate bench, in the case of DCIT Vs V F Arvind Brands Pvt Ltd (ITA No. 1904/Ahd/2013; order dated 14th February 2018), and submitted that he has just received this judicial precedent and it is stated to support the stand of the assessee. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court exercising jurisdiction in respect of the territory covered by the transferee Assessing Officer would be the one which would have jurisdiction to hear the appeal under Section 260A . It is the same approach which governs the jurisdiction of the benches of this Tribunal, as set out in rule 4(1) read with paragraph 4 of the notification- as reproduced earlier in the order. Clearly, therefore, the jurisdiction of the bench depends upon the location of the present Assessing Officer. Hon ble Delhi High Court has left no ambiguity on this aspect. In any case, as Their Lordships note, there can only be one Assessing Officer in respect of a case, and when that be so, the Assessing Officer having jurisdiction at the point of time of hearing of an appeal is the only Assessing Officer of the assessee. Be that as it may, it is not even learned senior counsel s case before us that it is jurisdiction at the point of time of filing of an appeal which must prevail, and that plea may, in any case, end up in a situation contrary to the law laid down by Hon ble Supreme Court in the case of Vijay International Udyog (supra). That will clearly be an incongruity and, as is the settled position, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is dealt with very well elaborate by Hon ble High Court, in Aar Bee Industries case (supra) dealing with this very judicial precedent, and, as Their Lordships indicate, there cannot indeed be any quarrel with the proposition that the definition of expression 'case' in relation to jurisdiction of an Assessing Officer nothing to do with the territorial jurisdiction of the Tribunal or High Courts merely because section 127 of the Act dealing with transfer has been incorporated in the same chapter and the fact that the result of transfer under section 127 has no impact on the jurisdiction of the Courts and Tribunals, but the fact remains that the jurisdiction of the High Court (as indeed of this Tribunal) is determined by the situs of the Assessing Officer and When the Assessing Officer itself has been changed from one place to another, the High Court (as indeed the bench of this Tribunal) exercising jurisdiction in respect of the territory covered by the transferee Assessing Officer would be the one which would have jurisdiction to hear the appeal under Section 260A (and under section 253 in the case of the Tribunal) all the words in italics supplied by us now. The la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll, and all that he pleads is that the Assessing Officer having jurisdiction at the point of time when assessment is framed must decide the jurisdiction of the bench which is to hear the appeal- a plea which is, as we have noted above, categorically rejected and disapproved by Hon ble Delhi High Court in the case of Aar Bee Industries (supra). 9. As regards learned senior counsel s argument that Hon ble President s rejection of learned CIT(DR) s request to transfer the appeals constitutes a specific order assigning jurisdiction to these appeals to Ahmedabad benches, we are unable to see any merits in this plea either. While it is not, and it cannot be, for us to sit in judgment over what Hon ble President decides under rule 4 (1), and, in any case, whatever he decides under rule 4 (1) unquestionably binds us, Hon ble President s rejection of an application for change cannot be seen as clothing the status quo with legality or conferring a jurisdiction when it does not exist. The rejection of the transfer application, based on the recommendation of the then Vice President concerned, was in the light of the law then holding the field, i.e. CIT Vs Digvijay Chemicals Ltd [(2006) 204 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoning. As for the fact that any transfer of appeals, from one station to another, is, as a matter of course, authorised by Hon ble President or Hon ble Vice President in all the cases is purely an internal procedural matter, which is not related to the requirement of the ITAT Rules, and, therefore, beyond the scope of our discussions. 10. In the light of the discussions above, and in view of the undisputed factual position that the Assessing Officer having jurisdiction to assess the income of the assessee is located in New Delhi, which falls in jurisdiction of Delhi benches, we find that the jurisdiction for hearing of these applications, and hearing of the related appeals, vests in Delhi benches of this Tribunal. However, it is for the Hon ble President to take a final call on the issue, as is the unambiguous thrust of Rule 4(1) of the ITAT Rules. We, therefore, deem it fit and proper to direct the Registry to place all stay applications and related appeals, as indeed all other appeals of this assessee, before Hon ble President for appropriate orders. In order to ensure, however, that these applications are not rendered infructuous or nugatory by recovery of the impugned ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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