IMPORTANT POINTS
(1) Even if case or cases of an assessee are transferred in exercise of power under Section 127 of Income Tax Act, 1961, High Court within whose jurisdiction Assessing Officer has passed order, shall continue to exercise jurisdiction of appeal.
(2) Binding nature of decisions of an appellate court established under a statute on subordinate courts and tribunals within territorial jurisdiction of State, is a larger principle involving consistency, certainty and judicial discipline, and it has a direct bearing on rule of law.
(3) A judicial remedy must be effective, independent and at the same time certain.

JUDGMENT :

PAMIDIGHANTAM SRI NARASIMHA, J.

1. These appeals give rise to an important question concerning appellate jurisdiction of the High Courts under Section 260A of the Income Tax Act, 1961¹[hereinafter referred to as ‘the Act’.] against judgments of Income Tax Appellate Tribunals²[hereinafter referred to as ‘ITAT’ / ‘Tribunals’.]. As Benches of the ITAT are constituted to exercise jurisdiction over more than one state, each state having a separate High Court, question arose as to which of the High Court is the appropriate Court for filing appeals under Section 260A. The question arose because Section 260A is open-textual and does not specify the High Court before which an appeal would lie in cases where Tribunals operated for plurality of States. This question came to be conclusively answered by the High Court of Delhi in the case of Seth Banarsi Dass Gupta v. Commissioner of Income Tax, (1978) 113 ITR 817 (Del)., wherein it was held that the appropriate High Court would be the one where the Assessing Authority is situated. This judgment continuous to hold the field.

2. In these appeals, a further question that arise for consideration is the jurisdiction of the High Court consequent upon administrative order of transfer of a ‘case’ under Section 127 of the Act from one Assessing Authority to another Assessing Officer located in a different State. The Punjab & Haryana High Court took the view that such a transfer would not change the principle laid down in Seth Banarasi Dass Gupta. However, the Delhi High Court in CIT v. Sahara India Financial Corporation Ltd., (2007) 294 ITR 363 (Del) and CIT v. Aar Bee Industries Ltd., (2013) 357 ITR 542 (Del). has taken a different view. The Delhi High Court held that an administrative order of transfer of cases will also have the consequence of transferring even the jurisdiction of the High Court. As there is a difference of opinion between the High Court of Punjab & Haryana on the one hand and the High Court of Delhi on the other, we are called upon to determine and declare the appropriate High Court for filing an appeal in such cases.

3. Having considered the matter in detail, and while reversing the judgments of the Delhi High Court in Sahara and Aar Bee, we have also held that the appellate jurisdiction of the High Court stands on its own foundation and cannot be subject to the exercise of executive power to transfer a ‘case’ from one Assessing Officer to another Assessing Officer.

Facts of the case:

4. The Appellant herein, M/s. ABC Papers Ltd. ⁶[hereinafter referred to as ‘the Assessee’.] is a company engaged in the manufacture of writing and printing paper. For the assessment year 2008-09, the Assessee filed its income tax returns before the Assessing Officer, New Delhi, on 30.09.2008. The Deputy Commissioner of Income Tax, Circle-1(1), New Delhi, issued a notice under Section 143 (2) of the Act and followed it up by an order of assessment dated 30.12.2010. Aggrieved by that order, the Assessee preferred an appeal to the Commissioner of Income Tax (Appeals) - IV, New Delhi, and by his order dated 16.02.2012, the Commissioner allowed the appeal. Against this appellate order, the Revenue carried the matter to ITAT, New Delhi. The ITAT, New Delhi, by its order dated 11.05.2017, upheld the order of the CIT (Appeals) - IV, New Delhi, and dismissed the appeal filed by the Revenue. Against this order of the ITAT, the Revenue filed ITA No. 517 of 2017 before the High Court of Punjab & Haryana.

5. It is important to note certain events that overtook the above-referred proceedings. While the matter was pending appeal before the CIT (Appeals) - IV, New Delhi, as indicated above, a search operation under Section 132(1) of the Act was carried out on 04.05.2011 at the office and factory of the Assessee in Chandigarh and certain places in the State of Punjab, by the Directorate of Income Tax (Investigation), Ludhiana. Yet another development that took place after the search operation was that, by a