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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Ujjal Bhuyan, Milind N Jadhav, JJ.
Mspl Limited - Appellant
Versus
Principal Commissioner Of Income Tax-1 - Respondent
Writ Petition (L) No. 3865 of 2020
Decided On : 21-05-2021
INCOME TAX - TRANSFER OF APPEALS - JURISDICTION - POWER OF PRESIDENT OF TRIBUNAL - SECTION 255 OF THE INCOME TAX ACT, 1961 - RULE 4 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 - STANDING ORDER ISSUED UNDER RULE 4 OF THE TRIBUNAL RULES - TRANSFER OF APPEALS FROM BANGALORE BENCH OF THE TRIBUNAL TO MUMBAI BENCHES OF THE TRIBUNAL - VALIDITY - WHETHER THE PRESIDENT OF THE TRIBUNAL HAS THE POWER TO TRANSFER APPEALS FROM ONE BENCH OF THE TRIBUNAL TO ANOTHER BENCH OUTSIDE THE HEADQUARTERS IN A DIFFERENT STATE - WHETHER RULE 4 OF THE TRIBUNAL RULES EMPOWERS THE PRESIDENT TO TRANSFER APPEALS FROM ONE BENCH TO ANOTHER BENCH IN A DIFFERENT HEADQUARTER - WHETHER THE STANDING ORDER ISSUED UNDER RULE 4 OF THE TRIBUNAL RULES CAN BE INVOKED TO TRANSFER A PENDING APPEAL FROM ONE BENCH UNDER ONE HEADQUARTER TO ANOTHER BENCH IN A DIFFERENT HEADQUARTER - WHETHER THE TRIBUNAL CAN TRANSFER AN APPEAL AT THE REQUEST OF A PARTY WHO IS NOT A RESPONDENT IN THE APPEAL - WHETHER THE CONVENIENCE OF A PARTY CAN BE A CRITERIA FOR TRANSFERRING A CASE OUT OF A STATE - WHETHER THE APPELLANT CAN BE FORCED TO TRANSFER THE APPEAL AGAINST HIS EXPRESS OBJECTION - HELD, THE PRESIDENT OF THE TRIBUNAL DOES NOT HAVE THE POWER TO TRANSFER APPEALS FROM ONE BENCH OF THE TRIBUNAL TO ANOTHER BENCH OUTSIDE THE HEADQUARTERS IN A DIFFERENT STATE - RULE 4 OF THE TRIBUNAL RULES EMPOWERS THE PRESIDENT TO TRANSFER APPEALS FROM ONE BENCH TO ANOTHER BENCH WITHIN THE SAME HEADQUARTER - THE STANDING ORDER ISSUED UNDER RULE 4 OF THE TRIBUNAL RULES CANNOT BE INVOKED TO TRANSFER A PENDING APPEAL FROM ONE BENCH UNDER ONE HEADQUARTER TO ANOTHER BENCH IN A DIFFERENT HEADQUARTER - THE TRIBUNAL CANNOT TRANSFER AN APPEAL AT THE REQUEST OF A PARTY WHO IS NOT A RESPONDENT IN THE APPEAL - THE CONVENIENCE OF A PARTY CAN HARDLY BE A CRITERIA FOR TRANSFERRING A CASE OUT OF A STATE - THE APPELLANT CANNOT BE FORCED TO TRANSFER THE APPEAL AGAINST HIS EXPRESS OBJECTION.
Fact of the Case:
The petitioner, a company incorporated under the Companies Act, 1956, filed four appeals before the Income Tax Appellate Tribunal, Bangalore Bench, for the assessment years 2005-06 to 2008-09. The revenue filed an application for transferring the appeals from Bangalore Bench to Mumbai Benches of the Tribunal. The Bangalore Bench of the Tribunal passed an order expressing its views that the request for transfer of appeals 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 Bangalore Bench to Mumbai Benches. The President of Income Tax Appellate Tribunal directed that the 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. The petitioner filed a writ petition challenging the orders passed by the Tribunal.
Finding of the Court:
The Court held that the President of the Tribunal does not have the power to transfer appeals from one Bench of the Tribunal to another Bench outside the headquarters in a different State. Rule 4 of the Tribunal Rules empowers the President to transfer appeals from one Bench to another Bench within the same headquarters. The Standing Order issued under Rule 4 of the Tribunal Rules cannot be invoked to transfer a pending appeal from one Bench under one headquarters to another Bench in a different headquarters. The Tribunal cannot transfer an appeal at the request of a party who is not a respondent in the appeal. The convenience of a party can hardly be a criteria for transferring a case out of a State. The appellant cannot be forced to transfer the appeal against his express objection.
Issues: Whether the President of the Tribunal has the power to transfer appeals from one Bench of the Tribunal to another Bench outside the headquarters in a different State.
Ratio Decidendi: 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 provisions of Sec.255 of the Act and the rules and Office Manual being subordinate legislation cannot be said to be exhaustive of the power of transfer, as was sought to be canvassed on behalf of the Assessee.
Final Decision: The Court allowed the writ petition and set aside the orders passed by the Tribunal transferring the appeals from Bangalore Bench to Mumbai Benches.
JUDGMENT
Ujjal Bhuyan, J. - Heard Mr. J. D. Mistri, learned senior counsel for the petitioner; Mr. Suresh Kumar, learned standing counsel revenue for respondent No.1; and Mr. R. V. Desai, learned senior counsel for respondent No.2.
2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 19.03.2020 passed by the Income Tax Appellate Tribunal, Bangalore Bench in ITA Nos.371 to 374/ Bang/2011 for the assessment years 2005-06 to 2008-09 as well as order dated 20.08.2020 passed by the President, Income Tax Appellate Tribunal and further seeks a direction that hearing of the above appeals be continued and concluded by the Income Tax Appellate Tribunal, Bangalore Bench.
3. By the order dated 19.03.2020, Bangalore Bench of the Income Tax Appellate Tribunal passed a speaking order expressing its views that request made by the revenue for transfer of the said appeals from the Bangalore Bench of the Income Tax 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 premises of the petitioner on 26.10.2007. Pursuant to the search action, proceedings were initiated under section 153A of the Income Tax Act, 1961 (briefly "the Act" hereinafter). Consequently, assessment proceedings were drawn up in respect of four assessment years i.e. assessment years 2005-06, 2006- 07, 2007-08 and 2008-09. Separate assessment orders were passed by the Assessing Officer i.e. Assistant Commissioner of Income Tax, Central Circle-2(1), Bangalore on 31.12.2009 for the above four assessment years. In so far the first three assessment years are concerned, the assessments were made under section 143(3) read with section 153A of the Act. However, for the assessment year 2008-09, the assessment was made under section 143(3).
6. In the assessment proceedings petitioner filed report under section 10B of the Act along with audit report under section 44AB of the said Act and claimed deduction under section 10B for the assessment years 2006-07, 2007-08 and 2008-09. Petitioner also claimed deduction on account of expenditure and depreciation for use of aircrafts for all the four assessment years. Assessing Officer negatived the claim of the petitioner for deduction under section 10B of the Act as according to the Assessing Officer petitioner had violated the conditions laid down under section 10B(2) of the Act. Thus, vide the assessment orders dated 31.12.2009 it was held that petitioner would not be entitled to deduction under section 10B in respect of the assessment years 2006-07, 2007-08 and 2008-09. Accordingly such claim was disallowed and brought to tax as income of the respective years. In so far claim of expenditure and depreciation for use of aircraft is concerned, the Assessing Officer disallowed 50% of the operational expenses as well as depreciation.
7. Being aggrieved by the aforesaid orders of the A
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