High Court's Jurisdiction Limited by Tribunal's Location, Not Assessee's Office Shift

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Case Name:

Commissioner of Income Tax vs. H.F.C.L. Infotel Ltd.(High Court of Punjab & Haryana)

I.T.A. No. 473 of 2006

Date: 24th January 2008

Key Takeaways:

1. A High Court's jurisdiction for tax appeals is determined by the location of the ITAT that passed the order, not the current location of the assessee's registered office.

2. Shifting of a company's registered office after an ITAT order does not change the jurisdictional High Court for appeal purposes.

3. The case reinforces the importance of territorial jurisdiction in tax appeal matters.

Issue:

Does the High Court of Punjab & Haryana have jurisdiction to entertain an appeal against an order passed by the Chennai Bench of the Income Tax Appellate Tribunal, when the assessee company shifted its registered office to Punjab & Haryana after the ITAT order was passed?

Facts:

1. The ITAT's Chennai Bench passed an order on 14.2.2006 for the assessment year 1998-1999.

2. The order was received by the CIT, Chennai office on 23.3.2006.

3. After the ITAT order, the assessee company shifted its registered office to the jurisdiction of the Punjab & Haryana High Court.

4. The Income Tax Department filed an appeal in the Punjab & Haryana High Court against the ITAT's order.

Arguments:

The Department argued that since the assessee had shifted its registered office to Punjab & Haryana after the ITAT order, the Punjab & Haryana High Court should have jurisdiction to hear the appeal.

Key Legal Precedents:

1. Suresh Desai & Associates vs. CIT (1998) 148 CTR (Del) 345 : (1998) 230 ITR 912 (Del) 

  - The Delhi High Court held that jurisdiction is vested in the High Court where the assessment was made, not where cases were transferred for a few years.

2. CIT vs. Motorola India Ltd. (2010) 326 ITR 156 (P&H) 

  - The Punjab & Haryana High Court ruled that jurisdiction is determined by the location of the Assessing Officer, not the business or residence of the assessee.

Judgement:

The High Court of Punjab & Haryana ruled that it does not have jurisdiction to entertain the appeal. The court based its decision on the following points:

1. Section 269 (of Income Tax Act, 1961) defines "High Court" in relation to appeals as the High Court for that State. 

2. The jurisdiction is determined by the location of the ITAT bench that passed the order, not the current location of the assessee's registered office.

3. The court relied on previous judgments (Suresh Desai & Associates and CIT vs. Motorola India Ltd.) to support its decision.

The court returned the appeal to the appellant (Income Tax Department) with the liberty to approach the appropriate High Court having jurisdiction in the matter. 

FAQs:

1. Q: Why couldn't the Punjab & Haryana High Court hear the appeal?

  A: The court's jurisdiction is determined by the location of the ITAT that passed the order (Chennai), not the current location of the assessee's office.

2. Q: Does shifting a company's registered office affect which High Court can hear tax appeals?

  A: No, the jurisdiction for tax appeals remains with the High Court corresponding to the ITAT that passed the original order.

3. Q: What should the Income Tax Department do now?

  A: They can file the appeal in the Madras High Court, which has jurisdiction over the Chennai ITAT bench.

4. Q: What's the significance of this judgment?

  A: It clarifies that companies cannot change the appellate jurisdiction by simply moving their registered office after an ITAT order is passed.

5. Q: How is the jurisdiction of a High Court in tax matters determined?

  A: According to Rule 4 of the relevant Rules, jurisdiction is determined by the location of the office of the Assessing Officer, not the business or residence of the assessee. 

This case emphasizes the importance of understanding jurisdictional rules in tax appeal matters and highlights that post-order changes in a company's registered office do not affect the appellate jurisdiction of High Courts in tax cases.

The Department has filed this appeal against the order dated 14.2.2006 passed by the Income Tax Appellate Tribunal, Bench `A' Chennai, in ITA No. 66/Mds/2002, titled as the Deputy Commissioner of Income Tax, Chennai versus M/s the Investment Trust of India Ltd., Chennai, pertaining to the assessment year 1998-1999.

In this appeal, not only the order was passed by the Chennai Bench of the Income Tax Appellate Tribunal (hereinafter referred to as `the ITAT'), but the order of the ITAT was also received in the office of CIT, Chennai, on 23.3.2006. Though in the appeal, it has not been disclosed as to why this appeal has been filed in this Court, but at the time of arguments, it was submitted that after the order passed by the ITAT, the assessee has shifted its registered office within the jurisdiction of this Court.

Therefore,the appeal has been filed here.

After hearing the arguments of learned counsel for the appellant, we are of the opinion that this Court has no jurisdiction to entertain this appeal against the order of the Chennai Bench, merely on the ground that after passing of the impugned order, the assessee has shifted its registered office from the jurisdiction of the Madras High Court to the jurisdiction of this Court. Section 269 (of Income Tax Act, 1961), which falls under Chapter XX, dealing with Appeals and Revisions, provides that in this Chapter, “High Court” means (i) in relation to any State the High Court for that State. The similar question came up for consideration before the Delhi High Court in Suresh Desai and Associates v. Commissioner of Income-tax, (1998) 230 ITR 912, where it was held that the jurisdiction to make assessment in respect of matters arising at Bombay had not been conferred or transferred to Delhi by reference to territory or persons or classes of persons or incomes or classes of income or cases or classes of cases as contemplated by Section 120 (of Income Tax Act, 1961). Such transfer of assessment cases for a few years other than the year in question had no relevance and no bearing on the territorial jurisdiction competence of the High Court of Delhi to hear the application under Section 256(2) (of Income Tax Act, 1961). It was held that in such situation, the jurisdiction vested in the High Court of Bombay and not in the High Court of Delhi. Again a similar question came for consideration before this Court in ITA No. 44 of 2005, titled as “The Commissioner of Income Tax, Faridabad versus M/s Motorola India Ltd.”, which was decided by a Division Bench of this Court on 3.10.2007, wherein it was held as under :-

“We have thoughtfully considered the submissions made by the learned counsel for the parties and have also gone through the judgments and notifications on which reliance has been placed. It is undisputed that the returns dated 29.11.1996 and 12.12.1996 were filed by the assessee-respondent at Bangalore and the assessment order dated 31.3.1999 was passed by the Assessing Officer at Bangalore (A-1). Even the revisional order in exercise of jurisdiction under Section 263 (of Income Tax Act, 1961) was passed by the Commissioner of Income Tax at Bangalore. All other orders have been passed by the revenue officers at Bangalore. Even the appeals before the Tribunal were decided on 29.6.2004 at Bangalore. According to Note 4 under sub-rule (1) of Rule 4 (of Income Tax Rules, 1962), it has been stipulated that ordinary jurisdiction of the Bench is to be determined not by the business or residence of the assessee but by the location of the office of the Assessing Officer. This statutory guidance is available from the standing order dated 16.9.1997, passed under sub-rule (1) of Rule 4 (of Income Tax Rules, 1962).”

In view of the aforesaid legal position, we are of the opinion that this Court has no jurisdiction to entertain this appeal. Therefore, this appeal is returned to the appellant with liberty to approach the High Court having the jurisdiction in the matter, if so advised.

( SATISH KUMAR MITTAL )

JUDGE

January 24, 2008 ( RAKESH KUMAR GARG )

JUDGE