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2018 Supreme(P&H) 4767
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Ajay Kumar Mittal, Avneesh Jhingan, JJ.
The Commissioner Of Income Tax (exemptions) - Appellant
Versus
M/s Baba Amarnath Educational Society, Moga - Respondent
ITA No. 232 of 2016
Decided On : 25-10-2018
Denesh Goyal, Senior Standing Counsel, for the Appellant; Mr. Pankaj Jain, Sr. Advocate with Mr. Sachin Bhardwaj, Advocate, for the Respondent
The main legal point established in the judgment is that the lack of territorial jurisdiction renders a decision by a forum null and void, emphasizing the importance of competence in the adjudication process.
Headnote:
Income Tax Act - Territorial Jurisdiction - Section 12AA - 1961 - [Section 12AA] - The appeal involved the issue of territorial jurisdiction of the Tribunal under Section 12AA of the Income Tax Act, 1961. The court found that the Chandigarh Bench did not possess jurisdiction to hear the appeal as the assessee-society was situated at Moga, falling within the jurisdiction of the Amritsar Bench. The court referred to Section 254(2) of the Act, which empowers the Tribunal to rectify any mistake apparent from the record, and held that the lack of territorial jurisdiction was an error apparent from the record. The court also cited the Supreme Court's decision in Pandurang v. State of Maharashtra, emphasizing that a decision by a forum lacking in competence is a nullity. The orders passed by the Chandigarh Bench were set aside, and the matter was directed to be heard afresh by the Amritsar Bench.
Fact of the Case:
The assessee-society applied for registration under Section 12AA of the Income Tax Act. The Commissioner of Income Tax rejected the application, which was later allowed by the Tribunal at Chandigarh. However, it was realized that the society fell within the territorial jurisdiction of the Amritsar Bench, leading to a miscellaneous application by the revenue, which was dismissed. The present appeal was filed by the revenue.
Finding of the Court:
The court found that the Chandigarh Bench did not possess jurisdiction to hear the appeal, as the society was situated within the jurisdiction of the Amritsar Bench. It held that the lack of territorial jurisdiction was an error apparent from the record and cited the Supreme Court's decision to emphasize the nullity of a decision by a forum lacking in competence. The orders passed by the Chandigarh Bench were set aside, and the matter was directed to be heard afresh by the Amritsar Bench.
Issues: The main issue was whether the Chandigarh Bench had jurisdiction to hear the appeal, considering the territorial location of the assessee-society.
Ratio Decidendi: The court's decision was based on the lack of territorial jurisdiction of the Chandigarh Bench, as it did not possess the competence to hear the appeal. It cited Section 254(2) of the Act, which empowers the Tribunal to rectify any mistake apparent from the record, and emphasized the nullity of a decision by a forum lacking in competence.
Final Decision: The appeal was allowed, and the orders passed by the Chandigarh Bench were set aside. The matter was directed to be heard afresh by the Amritsar Bench.
JUDGMENT
Avneesh Jhingan, J. - The revenue has filed the present appeal under section 260A of the Income Tax Act, 1961 (for brevity, 'the Act') against the order dated 28.10.2015 passed by Income Tax Appellate Tribunal, Chandigarh (hereinafter referred to as 'Tribunal') passed in M.A. No. 9/CHD/2014 in ITA No. 825/Chd/2011.
2. As per the appellant, following substantial questions of law arise for consideration in the present appeal:-
i) Whether the ITAT has erred in passing the impugned order after going beyond the jurisdiction and is to that extent bad in law.
ii) Whether the learned ITAT while deciding the miscellaneous application has erred in not considering an order dated 04.09.2013 passed by the President, ITAT directing the cases of assessee for A.Y. 2009-10 to be transferred from Chandigarh Bench to Amritsar Bench, which clearly substantiate the contention of the department and also goes to the root of the matter on the ground that the same was only an administrative order.
iii) Whether the Hon'ble ITAT has erred in passing the order without considering the decision of Hon'ble Supreme Court in judgment reported as 1987(1) RCR (Criminal) 371 (SC) that even a right decision by a wrong forum is no decision and nonexistent in the eyes of law even when the jurisdictional H.C. had followed the ratio in a judgment reported as 2009(1) RCR (Criminal) 414 (P&H).
3. The brief facts necessary for adjudication of the present appeal are that the assesseesociety applied for grant of registration under Section 12AA of the Act. The Commissioner of Income Tax-III, Ludhiana (CIT) vide order dated 28.06.2011 rejected the application. The said order was assailed by the assessee in appeal before the Tribunal at Chandigarh. The Tribunal allowed the appeal of the assessee-society vide order dated 29.12.2011 and the CIT was directed to grant registration. In pursuance to the order of the Tribunal, registration was granted under Section 12AA of the Act on 09.02.2012. At that stage, it was realised that the assessee-society was situated at Moga and the territorial jurisdiction would be that of Amritsar Bench of the Tribunal instead of Chandigarh Bench.
4. The revenue moved a miscellaneous application stating that the order passed by the Chandigarh Bench Tribunal is without jurisdiction as the case falls within the territorial jurisdiction of Amritsar Bench. The application was dismissed vide order dated 28.10.2015. Hence, the present appeal.
5. Heard learned counsel for the parties.
6. Learned counsel for the appellant argued that Chandigarh Bench of the Tribunal did not have the territorial jurisdiction with regard to the case of the assessee-society as it was based at Moga and the same falls within the jurisdiction of Amritsar Bench of the Tribunal. It was urged that the order passed was without jurisdiction and the Tribunal erred in dismissing the miscellaneous application filed by the appellant. He further relied upon the decision of the Supreme Court in the case of Pandurang v. State of Maharashtra, 1987 AIR (SC) 535.
7. Learned counsel for the assessee-society supported the order of the Tribunal by urging that there was no error apparent on record and the case did not fell within the ambit of Section 254 of the Act. Further, the Tribunal rightly dismissed the miscellaneous application as the issue of jurisdiction was not raised by the revenue at the time of hearing of the appeal. He contended that the decision of the Tribunal has not been challenged on merits and the same is sustainable in law. Support was gathered from the decision of the Rajasthan High Court in the case titled as Apex Metchem (P) Ltd. v. Income Tax Appellate Tribunal & ors., CWP No.5081 of 2008, decided on 08.05.2009,
8. The contention raised by learned counsel for the appellant deserves acceptance.
9. It could be disputed by learned counsel for the respondent/assessee that Chandigarh Bench of the Tribunal did not possess jurisdiction to hear the appeal as the assesseesoc
