TMI Blog2021 (5) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... Order. Whether it be a suit or an appellate proceeding before the Tribunal the place of institution of the suit would be where the defendants reside or works for gain and in case of appeal under the Tribunal Rules where the AO is located. Merely because for assessment years prior to assessment year 2005-06, the Assessing Officer was at Mumbai or for the subsequent assessment years i.e. subsequent to assessment year 2008-09 the Assessing Officer is at Mumbai would be no ground to transfer a pending appeal or appeals pertaining to assessment years 2005-06 to 2008-09 from one Bench of the Tribunal in a different State / Zone to another Bench of the Tribunal in another State / Zone. Petitioner has explained and it has not been denied that post search and seizure assessments for the four assessment years under consideration were carried out in Bangalore along with other cases following centralization of assessment. Now for assessment years subsequent to assessment year 2008-09 the assessment jurisdiction of the petitioner has been reverted back to Mumbai and conferred upon DCIT1(2)(2), Mumbai. This would not mean DCIT-1(2)(2) Mumbai to be the Assessing Officer for the four assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned therein, principles governing the same cannot be read into transfer of appeals from one Bench of the Tribunal to another Bench that too in a different State / Zone, for the simple reason that it is not a case before any AO. Petitioner may have expressed no objection to transfer of assessment jurisdiction from the AO at Bangalore to the AO at Mumbai after assessment for the assessment years covered by the search period, but that cannot be used to non-suit the petitioner in his challenge to transfer of appeals from one Bench of the Tribunal to another Bench in a different State and in a different Zone. The two are altogether different and have no nexus with each other. So, the preliminary objection raised on behalf of the respondents on this count has to fail. Having regard to the mandate of clause (2) of Article 226 of the Constitution of India, this Court certainly has the jurisdiction to entertain the writ petition. In so far filing of appeal instead of writ petition is concerned, a careful reading of section 260A(1) would go to show that an appeal shall lie to the High Court from every order passed in appeal by the Tribunal if the High Court is satisfied that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Appellate Tribunal to Mumbai Benches of the Income Tax Appellate Tribunal is justified and to place the said views before the President to enable the President of the Income Tax Appellate Tribunal to pass orders on the request for transfer of the appeals from the Bangalore Bench to Mumbai Benches. By order dated 20.08.2020 President of Income Tax Appellate Tribunal directed that the above appeals pending in the Income Tax Appellate Tribunal, Bangalore Bench should be heard and determined by the Income Tax Appellate Tribunal, Mumbai Benches at Mumbai. 4. Facts leading to the above orders as pleaded may be briefly noted. 4.1. Petitioner is a company incorporated under the Companies Act, 1956 on 18.10.1961 having its registered office at Maharshi Karve Road, Mumbai. It is stated that since its incorporation its registered office has remained unchanged at Mumbai. Petitioner is engaged in the business of mining, running gas unit and generating power through windmills. It has two mining divisions i.e. mining division-1 and mining division-2 at Hospet, Karnataka. 5. A search and seizure operation under section 132 of the Income Tax Act, 1961 was carried out in the business prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of 50% by the Assessing Officer, the same was upheld for the assessment year 200506. However, for the remaining three assessment years certain reliefs were granted to the petitioner. In the result, the appeal for the assessment year 2005-06 was dismissed and the appeals for the assessment years 2006-07, 2007-08 and 2008-09 were partly allowed. 8. Aggrieved by the order dated 03.02.2011 passed by the CIT (Appeals), petitioner filed four appeals on 06.04.2011 before the Income Tax Appellate Tribunal, Bangalore Bench for the four assessment years which were registered as follows :- i) ITA No.371/B/2011 for the assessment year 2005-06. ii) ITA No.372/B/2011 for the assessment year 2006-07. iii) ITA No.373/B/2011 for the assessment year 2007-08. iv) ITA No.374/B/2011 for the assessment year 2008-09. 9. One of the grounds taken in the appeals was that the search and seizure action carried out in the business premises of the petitioner under section 132 of the Act was invalid as no satisfaction note was recorded prior to the search and seizure as is the requirement under section 132 of the Act. 10. From the order-sheet of the appellate proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that issue of multiplicity of jurisdiction of Mumbai and Bangalore may arise in the appellate proceedings before the Bangalore Bench of the Tribunal. Reference was made to a writ petition filed by the petitioner before this Court against recovery of demand. An apprehension was expressed that difficulties in compliance before Bangalore Bench of the Tribunal and before the High Court of Mumbai might be caused which could be avoided by transfer of appeal proceedings to the jurisdictional Tribunal Bench at Mumbai. Therefore, request was made that all the pending proceedings of appeal before the Tribunal, Bangalore Bench may be transferred to the Mumbai Benches of the Tribunal for effective coordination of appellate proceedings. Commissioner of Income Tax, ITAT-II, Bangalore by his forwarding letter dated 14.08.2013 forwarded the aforesaid letter dated 12.08.2013 to the Vice President of the Tribunal at Bangalore. 13. Though the transfer request was made vide application dated 12.08.2013 no follow up steps were taken by the departmental representative and the four appeals continued to remain pending before the Bangalore Bench of the Tribunal. From the order-sheet annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjections dated 27.06.2019. Departmental representative filed written submissions on 12.12.2019 in support of the prayer for transfer of the appeals. 17. The matter was heard by the Bangalore Bench of the Tribunal on 20.02.2020. 18. On 11.09.2020 petitioner received a copy of the impugned order dated 20.08.2020 passed by the President of the Tribunal under rule 4 of the Income Tax Appellate Tribunal Rules, 1963 directing that the four subject appeals be transferred from the Bangalore Bench of the Tribunal to be heard and determined by the Mumbai Benches of the Tribunal at Mumbai. 19. Subsequently, when the petitioner sought for a copy of the order passed by the Bangalore Bench of the Tribunal following which the President had passed the impugned order dated 20.08.2020, it was provided with a copy of order dated 19.03.2020 passed by the Bangalore Bench of the Tribunal accepting the request for transfer and placing its views to enable the President to pass necessary orders. 20. Aggrieved, petitioner has preferred the present writ petition for quashing of the two orders dated 19.03.2020 and 20.08.2020 and for a direction to continue the hearing of the four subject appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Tribunal (already referred to as the Tribunal hereinabove) has filed reply affidavit through the Assistant Registrar. Maintainability of the writ petition has been questioned on two grounds. Firstly, petitioner did not oppose transfer of jurisdiction under section 127 of the Act to Mumbai. Having not challenged such transfer of jurisdiction, it is now not open to the petitioner to oppose transfer of appeals by the Tribunal. Secondly, the writ petition seeks to challenge an administrative decision of the Tribunal which falls within the realm of subjective satisfaction. This cannot be challenged in a writ proceeding. 22.1. On merit, it is submitted that Commissioner of Income Tax-1, Mumbai vide letter dated 12.08.2013 had requested for transfer of the appeals from the Bangalore Bench of the Tribunal to Mumbai Benches of the Tribunal which was repeated subsequently. Petitioner raised objection to such transfer on 27.06.2019. Matter was put up before the President of the Tribunal on 22.10.2019 for administrative orders but the President directed that the Bench at Bangalore may deal with the issue of transfer by way of a speaking order. Personal hearing was granted to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner has further stated that even an administrative order is subject to judicial scrutiny and must therefore conform to the requirements of law. 23.1. In so far convenience of parties is concerned, it is submitted that adjudication of the appeals in Bangalore would be more convenient to the petitioner because it is nearer to its mining units at Hospet, Karnataka. 23.2. In the circumstances, it is submitted that objection of the respondents have no legs to stand. There is merit in the writ petition filed by the petitioner which is accordingly liable to be allowed. 24. Mr. J. D. Mistri, learned senior counsel for the petitioner submits that the transfer application was made on 12.08.2013. For six years no steps were taken by the respondents to press the transfer application so much so that Bangalore Bench of the Tribunal is on record opining that plea of transfer was not a serious plea; rather it was a casual submission. According to Mr. J. D. Mistri, the real purpose behind the move to transfer the pending appeals out of the Bangalore Bench of the Tribunal was to avoid the decision of the Karnataka High Court in the case of C. Ramaiah Reddy (supra). As per the said j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complied with. In support of his submissions, Mr. Mistri has relied upon the following decisions :- I) (AIR 1959 SC 308) Gullapalli Nageswara Rao Vs. Andhra Padesh State Road Transport Corporation. II) (AIR 1963 Cal 331) Ramchandra Jagdishchand Vs. Deputy Collector of Customs, Calcutta. II) [(1969) 2 SCC 262] A. K. Kraipak Vs. Union of India. 25. Mr. Desai, learned senior counsel appearing for respondent No.2 at the outset has referred to the prayer portion of the writ petition. He submits that the foundational order which is under challenge in the writ petition is dated 19.03.2020 passed by the Tribunal at Bangalore. Therefore, the writ petition ought to have been filed before the Karnataka High Court and not before the Bombay High Court. On this ground itself the writ petition may be dismissed. 25.1. He has also questioned invocation of writ jurisdiction of the High Court under Article 226 of the Constitution of India by the petitioner. Referring to section 260A of the Act, he submits that an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal if the High Court is satisfied that the case involves a substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020, State of U.P. Vs. Sudhir Kumar Singh. 26. Mr. Suresh Kumar, learned standing counsel revenue appearing for respondent No.1 has adopted the arguments of Mr. Desai, learned senior counsel for respondent No.2. Mr. Suresh Kumar argued against maintainability of the writ petition on the ground that when the petitioner did not object to transfer of jurisdiction under section 127 of the Act, he cannot object to or challenge transfer of appeals from one Bench of the Tribunal to another Bench. 27. In his reply, Mr. Mistri, learned senior counsel for the petitioner submits that contention of Mr. Desai that the writ petition should have been filed before the Karnataka High Court in view of order dated 19.03.2020 passed by the Bangalore Bench of the Tribunal is legally unsound. The present writ petition has been filed challenging amongst others the ultimate order dated 20.08.2020 passed by the President of the Tribunal at Mumbai. Cause of action for filing the writ petition had arisen in Mumbai and, therefore, the present writ petition filed before this Court is certainly maintainable. 27.1. In so far submission of Mr. Desai that instead of writ petition an appeal under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act becomes invalid. This point was raised on behalf of the petitioner before the Bangalore Bench of the Tribunal as early as on 21.11.2012. In that context, Bangalore Bench of the Tribunal in its order dated 11.02.2013 had directed the departmental representative to produce the satisfaction note for initiating search under section 132 of the Act before the Tribunal. It is also true that satisfaction note has not been produced before the Tribunal till passing of the impugned order dated 19.03.2020. Though from the order-sheet dated 29.07.2013, we find that the departmental representative had prayed for transferring the appeals from Bangalore to Mumbai, the application for transfer was filed by Commissioner of Income Tax-1, Mumbai before the Vice President of the Tribunal on 12.08.2013. However, from 12.08.2013 no steps were taken by the revenue to pursue the transfer application so much so that the Bangalore Bench of the Tribunal in its order dated 19.03.2019 was constrained to pass adverse observations on the revenue. Tribunal opined that plea raised by the revenue for transfer was not a serious plea; rather it was a casual submission. 30. Petitioner has contended that Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s directed the Bench to deal with the objections by speaking order and obtain its view in the matter and communicate the same to the Head Office. * * * * * 11. We have given a careful consideration to the rival submissions. With regard to objection of the Assessee based on Rule 4(2) of the ITAT Rules and Rule 34 of the Office Manual, we are of the view that the said objections are without any merit. In terms of Sec.255(1) of the Act, the powers and functions of the Appellate Tribunal are exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the members thereof. Sec.255(5) of the Act provides that subject to the provisions of this Act, the Appellate Tribunal shall have power to regular its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings . Therefore, the power of the President to transfer appeals from one Bench to other Bench, including the power to transfer from one Bench to another Bench not within the same headquarters, can be traced to provisions of Sec.255 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamine the validity of issue of warrant of search u/s.132 of the Act. This argument is without any merit as the ITAT Benches will deal with the same in accordance with law and the apprehension of the Assessee in this regard is baseless. 13. We have accordingly dealt with the objections of the Assessee by way of this speaking order and as directed by the Hon ble President, place our views in the matter to enable the Hon ble President to pass orders on the request for transfer of appeals from Bangalore Benches to Mumbai Benches. 33. From a careful scrutiny of the reasons given by the Bangalore Bench of the Tribunal, it is seen that according to the Tribunal the power of the President to transfer appeals from one Bench to another Bench including the power to transfer from one Bench to another Bench not within the same headquarters can be traced to section 255 of the Act. Thereafter Tribunal noted that the power to transfer can be exercised at the request of either of the parties to the proceedings, be it the appellant or the respondent. Primary consideration while considering such a request is the balance of convenience of all the parties. After observing that registered off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer in the case does not exceed fifty lakh rupees, and the President may, for the disposal of any particular case, constitute a Special Bench consisting of three or more members, one of whom shall necessarily be a judicial member and one an accountant member. (4) If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided, they shall state the point or points on which they differ, and the case shall be referred by the President of the Appellate Tribunal for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case, including those who first heard it. (5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending appeal from one Bench to another Bench outside the headquarters in another State. 38. We have also noticed from sub section (6) that a proceeding before the Tribunal shall be deemed to a judicial proceeding within the meaning of sections 193, 196 and 228 of the Indian Penal Code and it shall also be deemed to be a civil court for the purpose of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898. Therefore, there is no manner of doubt that a proceeding before the Tribunal is a judicial proceeding and for certain limited purpose it is deemed to be a civil court. Question for consideration is when an appeal or a bunch of appeals are being heard by a Bench of the Tribunal in one State, can an order on the administrative side be passed by the President transferring a live appeal from one Bench to another Bench that too in a different State outside the headquarters ? In our opinion, no such power is discernible in section 255 of the Act. Reading or conferring such a power would amount to interference in a judicial proceeding of the Tribunal. 39. In so far the order dated 20.08.2020 passed by the President of the Tribunal is concerned, the same has been pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial order, sub rule (2) is more specific. It deals with a situation where there are more than two Benches of the Tribunal at any headquarter; when there are multiple Benches in a headquarter, the President or, in his absence the senior Vice President etc. may transfer an appeal or an application from one of such Benches to any other. Meaning thereby that it is a transfer of an appeal or an application from one Bench to another Bench within the same headquarters. For example, in Mumbai the number of Benches is twelve and in Bangalore, the number of Benches is three. Thus, this provision can be invoked to transfer an appeal from one Bench in Mumbai to another Bench in Mumbai or from one Bench in Bangalore to another Bench in Bangalore. But this provision cannot be invoked to transfer a pending appeal from one Bench under one headquarter to another Bench in a different headquarter. 42. While on the Tribunal Rules, we may also refer to rules 13 and 28. Who may be joined as respondent in an appeal by the assessee is dealt with in rule 13. In an appeal by an assessee under sub-section (1) of section 253, the concerned Assessing Officer shall be made a respondent to the appeal. Conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act read with 143(3) thereof. For the last assessment year i.e. 2008-09, the assessment order was made under section 143(3). Following centralization of the cases at Bangalore, the assessments were carried out at Bangalore and in all the assessment orders the Assessing Officer was Assistant Commissioner of Income Tax, Central Circle-2(1), Bangalore. As we have already seen, the first appeals against the assessment orders were preferred before CIT-A at Bangalore whereafter the appeals were filed before the Tribunal at Bangalore and rightly so because the Assessing Officer i.e., the respondent was from Bangalore. 46. Though provisions of the Civil Procedure Code, 1908 may not be applicable to the Act as well as to proceedings before the Tribunal, nonetheless as a matter of principle, we can advert to section 20 thereof, which says that every suit shall be instituted in a court within the local limits of whose jurisdiction the defendant or in the case of multiple defendants, each of the defendants resides or carries on business or personally works for gain. This principle finds manifestation in clause 4 of the Standing Order. Whether it be a suit or an appellate proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a State. [Please see judgment and order dated 07.05.2021 passed by the Supreme Court in Transfer Petition (Criminal) No.17 of 2021, Rajkumar Sabu -Vs- M/s. Sabu Trade Pvt. Ltd.]. Plea that records were transferred from Bangalore to Mumbai and that it would be convenient for the revenue if the appeals are heard at Mumbai cannot be a valid ground for transfer. Cases are transferred to serve the ends of justice and justice must not only be done but must be seen to have been done, that too, from the perspective of the litigant. 50. In the order dated 19.03.2020 Bangalore Bench of the Tribunal noted in paragraph 11 that the power to transfer of the appeal can be exercised by the Tribunal at the request of either party to the proceedings before it, be it the appellant or the respondent and that the primary consideration while considering such a request is the balance of convenience of the parties. In so far convenience of a party is concerned we have already dealt with it in the preceding paragraph. What is of significance is that even according to the Tribunal the power to transfer can be exercised at the request of either party to the proceedings before the Tribunal, be it the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer at Mumbai after assessment for the assessment years covered by the search period, but that cannot be used to non-suit the petitioner in his challenge to transfer of appeals from one Bench of the Tribunal to another Bench in a different State and in a different Zone. The two are altogether different and have no nexus with each other. So, the preliminary objection raised on behalf of the respondents on this count has to fail. 52. The other preliminary objection raised by the respondents, more particularly by Mr. Desai, learned senior counsel for respondent No.2 that firstly, the writ petition should have been filed before the Karnataka High Court and secondly an appeal under section 260A of the Act ought to have been filed instead of a writ petition, we find both the objections to be without any merit. The opinion rendered by the Bangalore Bench of the Tribunal vide order dated 19.03.2020 attained finality when the President of the Tribunal passed the impugned order dated 20.08.2020 which order was passed at Mumbai. That apart, clause (2) of Article 226 makes it clear that the power to issue directions, orders or writs by any High Court within its territorial jur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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