Income Tax Appellate Tribunal - Ahmedabad
Cairn India Limited (Vedanta Ltd.), ... vs The Adit., (Intl.Taxn.), Ahmedabad on 11 May, 2018
S.A. Nos.41 to 45/Ahd/2018
(Arising out of ITA Nos.2680 to 2684/Ahd/2012)
AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively
Page 1 of 11
IN THE INCOME TAX APPELLATE TRIBUNAL,
AHMEDABAD D BENCH, AHMEDABAD
[Coram: Pramod Kumar AM and Madhumita Roy JM]
S.A. Nos .41 to 45/Ahd/2018
(Arising out of ITA Nos. 2680 to 2684/Ahd/2012)
Assessment years: 2008-09, 2009-10, 2008-09, 2009-10 & 2008-09
Vedanta Limited ..........................Applicant
[Successor to Cairn India Limited
(Erstwhile known as Cairn Energy Gujarat BV/
Cairn Energy Cambay BV/Cairn Energy India West BV)]
DLF Atria Building, Jacaranda Marg, N Block, DLF City Phase - II,
Gurgaon (Haryana) 122002. [PAN: AACCS7101B]
Vs
Assistant Director of Income Tax
International Taxation, Ahmedabad .........................Respondent
Appearances by
S N Soparkar and Parin Shah for the applicant
V K Singh and R C Dande for the respondent
Dates of hearing : May 8 and 9, 2018
Date of pronouncement : May 11, 2018
O R D E R
Per Pramod Kumar, AM:
1. By way of these five stay applications, the assessee applicant seeks a stay on collection/recovery of Rs 187.30 crores plus interest for the period of 5½ years, in the demands impugned in five different appeals before us, as detailed below :
Assessment ITA No. Total Demand as Payment made Outstanding
Year on 02.12.2012 by the assessee demand (Rs)
(Rs.) (excluding interest
from 2.12.2012 till
now)
2008-09 2680/Ahd/2012 30,51,41,410 4,21,25,681 26,30,15,729
2009-10 2681/Ahd/2012 52,74,84,295 7,28,20,781 45,46,63,514
2008-09 2682/Ahd/2012 27,23,57,161 3,75,99,718 23,47,57,443
2009-10 2683/Ahd/2012 52,98,70,420 7,31,50,193 45,67,20,227
2008-09 2684/Ahd/2012 53,82,25,441 7,43,03,627 46,39,21,814
Total 187,30,78,727
S.A. Nos.41 to 45/Ahd/2018
(Arising out of ITA Nos.2680 to 2684/Ahd/2012)
AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively
Page 2 of 11
2. These stay applications were originally moved before Income Tax Appellate Tribunal Surat bench on the ground that, at the point of time, the office of the assessee was situated in Surat, and, as a result of creation of Surat bench vide Notification dated 24th July 2017, issued by the Income Tax Appellate Tribunal, the jurisdiction in respect of these appeals, and resultantly in respect of the related stay applications as well, was said to vest in the Surat bench. However, these stay applications were not accepted by the Surat bench since the related appeals were not yet transferred to the Surat bench. It was in this backdrop that the present stay applications were filed before us. We were urged to hear these stay applications as the related appeals were still lying in Ahmedabad, though under the process of transfer to Surat bench, and extend the stay already granted by the Tribunal vide order dated 15th November 2017.
3. When these stay applications were called out for hearing, Shri Soparkar, learned Sr Advocate appearing for the assessee, submitted that while it is indeed true that the office address of the assessee, as recorded in the relevant assessment order, was in Surat at the relevant point of time, the jurisdiction for hearing these appeals will continue to be, notwithstanding the setting up of Surat bench, at Ahmedabad as the CIT(A) passing the orders impugned in these appeals was located in Ahmedabad. He submitted that at the assessment of the assessee company was initially done at Surat, and the Assessing Officer concerned was located at Surat, but, thereafter, the assessment was done by the Assessing Officers, working in international taxation wing, located at Ahmedabad. Learned counsel submits that so far as determination of jurisdiction of the ITAT bench is concerned, it has to be essentially based on the location of the office of the authority whose order is impugned in appeal before us. His line of reasoning is that. Learned counsel points out that under rule 4(1) of the Income Tax Appellate Tribunal Rules 1963, "a bench shall hear and determine such appeals and applications made under the Act as the President may, by general or special order, determine", and then he takes us through the notification no. F No. 63-Ad(AT) 97, dated 16th September 1997- as amended up to date, and points out that according to the said order "all appeals and applications from the Districts, States and Union Territories specified in column 3 shall be, with effect from 1st October 1997, be heard and determined by the benches specified in column 2 of the table". It is his contention that this order uses to the expression "all appeals and applications from" the specified places, and, therefore, what really matters is that the location of the office of the authority passing the orders, impugned in appeals or relatable to applications, and not that of the office of the assessee or even the Assessing Officer. Learned counsel submits that the location of the CIT(A) in all the appeals pertaining to the assessee is Ahmedabad, the jurisdiction vests in Ahmedabad benches only. He fairly accepts that the assessee however, did not realize this legal position, when suddenly, during the course of the last hearing, it was pointed that the office of the assessee, as also the Assessing Officer, in the appeal taken up for hearing, was situated in Surat at the relevant point of time, and, the jurisdiction of hearing the appeal should vest in Surat bench. It was under this misconception of legal position that the assessee had agreed for transfer of his appeals to Surat bench. We are then informed that as on now that office of the assessee, as also that of the assessee's Assessing Officer, is located in New Delhi, and the assessee has made repeated efforts to get these appeals transferred to New Delhi benches, but without any success. Our attention is then invited to the order dated 4th February 2014 passed by the then President rejecting request for transfer of all the appeals to New Delhi. There is nothing more, according to the learned counsel, that the assessee could have done to take the matters S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 3 of 11 to a logical conclusion and ensure an expeditious disposal of the matter. The appeals remain to be disposed of, and, therefore, the assessee has no choice but to seek an extension of stay. In the meantime, with the setting up of Surat bench, there is an added, but ill conceived, confusion about the benches where these appeals are to be heard. In the light of his submissions recorded above, however, there is no confusion really and the appeals are required to be heard and disposed of at Ahmedabad benches. Learned Sr Advocate urges us to hear these appeals at the soonest, and in the meantime, hear and decide these stay applications. On merits of the stay applications, learned counsel for the assessee submits that it is a case in which the disposal of appeals has been delayed due to factors beyond the control of the assessee. The matter has been heard and de heard by the Tribunal. It was part heard for several days and, thereafter, the matter was released, though due to ill health of the then special counsel for the income tax department, for fresh hearing. He takes us through the related facts set out in the stay application and contends that he has done all that he could have done for early disposal of these appeals, but all in vain. When a stay is granted to the assessee for a limited time, when the related appeals have not been disposed of despite due cooperation from the assessee, and when there is no material change in the facts and circumstances so as to disentitle him to further stay, essentially the stay so granted has to be extended suitably. Learned Departmental Representative does not have much to say. As to the question of jurisdiction, he leaves the matter to the bench. As regards the question as to whether this is a fit case for stay or not, learned Departmental Representative submits that the apprehensions of the assessee are unjustified as there is not even an effort to collect or recover the outstanding demands. Unless no such recovery action is initiated by the tax authorities, the apprehensions of the assessee are justified. In any event, according to the learned Departmental Representative, the disposal of appeals is getting inordinately delayed, the outstanding tax demands on the assessee are huge, and the assessee must, therefore, pay a reasonable part of the demand rather than making the tax authorities wait for realization of their legitimate dues.
4. We have considered the rival submissions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We may add that the stay applications were again fixed for hearing on 9th May 2018, as some further clarifications from the learned representatives were considered necessary, and we have heard the learned representatives on those issues. We will set out their arguments, as may be necessary, in the later discussions.
5. We find that so far as the jurisdiction of the bench to hear in appeal is concerned, the legal position is quite clear and unambiguous. The very notification relied upon by the learned senior counsel, in paragraph 4, states as follows:
4. The ordinary jurisdiction of the bench will be determined not by the place of business or residence of the assessee but by the location of the Assessing Officer.
6. As this notification is issued under rule 4(1) of the Income Tax Appellate Tribunal Rules 1963, it has a force of law and it is does not leave any discretion with the bench- or, for that purpose, with anyone other than Hon'ble President of the Income Tax Appellate Tribunal, so far as determination of the jurisdiction for hearing of an appeal is concerned. In S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 4 of 11 view of this unambiguous legal position, the arguments advanced by the learned senior counsel, with respect to determination of jurisdiction on the basis of location of the authority whose order is impugned in the related appeal, are devoid of legally sustainable merits. That is not, however, the end of the matter. There is, however, a practical problem that we must deal with. There is sometimes a change in the jurisdiction, as in this case, of the Assessing Officer. In the case of this very assessee, the assessment was, in the initial years, done by an Assessing Officer located in Surat. Later, the jurisdiction to assess this assessee shifted to another Assessing Officer located in Ahmedabad. As the things now, the jurisdiction to assessee this assessee vests with an Assessing Officer based in New Delhi. As can be seen from the case history, the designation of these three Assessing Officer located in three different cities are (i) Income Tax Officer (International Taxation) Surat, (ii) Assistant Director of International Taxation, Ahmedabad, and (iii) Assistant Commissioner of Income Tax, Circle 1(1), Gurgaon. The question naturally arises as to how the appellate jurisdiction is to be decided- on the basis of the jurisdiction of the Assessing Officer at the point of time when the assessment was framed, at the point of time when appeal is filed or at the point of time when appeal is to be heard. The expression used in the notification issued by the Income Tax Appellate Tribunal is that "The ordinary jurisdiction of the bench will be determined ........ by the location of the Assessing Officer". It does not refer to the location of the Assessing Officer at the point of time when assessment was framed or at the point of time when the appeal was filed, or, for that purpose, at any specific point of time. All that the notification refers to is "the location of the Assessing Officer" and the jurisdiction is the jurisdiction to, as rule 4(1) of the ITAT Rules 1963 states, "hear and determine such appeals and application made under the (Income Tax) Act". In our considered view, therefore, it is the location of the Assessing Officer at the point of time when the Tribunal is to "hear and determine such appeals and applications" which is relevant for determination of the jurisdiction of the bench which is to hear and determine the appeals and applications under the Act. When the location of the Assessing Officer having jurisdiction over assessment of the assessee changes, the jurisdiction of the bench of the Tribunal, which is to take judicial call on the appeals and applications, automatically changes as a corollary to, and as an offshoot of, the change in the location of the change of the Assessing Officer. It is also important to bear in mind the fact that the assessment of each year is not entirely on standalone basis but in continuity, and that when the new Assessing Officer takes over from the earlier Assessing Officer, as a result of order under section 127, the earlier Assessing Officer becomes completely functus officio so far as the assessee is concerned. It is thus not only the power to assessee the income of the assessee in future but all powers and duties in relation to the assessments framed earlier that gets transferred to the new Assessing Officer. Once jurisdiction under section 127 is transferred, the officer earlier having the jurisdiction to assessee income of the assessee cannot at all be said to be Assessing Officer of the assessee. As observed by Hon'ble Delhi High Court in the case of CIT Vs Aar Bee Industries [(2013) 357 ITR 542 (Del)], rejecting the plea of the assessee that Hon'ble High Court's jurisdiction to hear the appeal against the order passed by the Tribunal depends upon the location of the Assessing Officer at the point of time when the assessment order was framed, "It is a well accepted principle that there can be only one Assessing Officer in respect of a case". If there can be only one Assessing Officer in a case, that Assessing Officer is essentially the holding jurisdiction at present. The transfer is not assessment year specific but in entirety. in any case, if we are to determine the jurisdiction of the bench to hear the cases based on the point of time when the assessment was framed or when appeal was filed, it may S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 5 of 11 result in a situation in the case of one assessee, different benches of the Tribunal will have jurisdiction to hear its appeal for different years- and even cross appeals for one year in a case is which in between the point of time when cross appeals are filed, there is a change in the jurisdiction with respect to the Assessing Officer. That would clearly be an incongruity, and the cross appeals cannot anyway be heard at different places in the light of the law laid down by Hon'ble Supreme Court in the case of CST Vs Vijay International Udyog [(1985) 152 ITR 111 (SC)] which requires cross appeals to be heard together. The appeals for different assessment years having common issues should ideally be heard together, but then when benches at different places have jurisdiction over hearing over these different assessment years, such consolidation is not possible at all. As to what should be done in such a situation, we find guidance from the principle embedded in the latin maxim ut res magis valeat quam pereat which is very well explained in Sampat Iyengar's Law of Income Tax [ISBN 978-93- 5139-426-6; Volume 1 at page 104] as follows:
Ut res magis valeat quam pereat It is a crucial rule of interpretation of statutes that the words of the statute should be given a sensible meaning so as to make them effective. (CIT v Jayashree Charity Trust (1986) 159 ITR 280 (Cal). A construction which would defeat the very object of the legislature should be avoided. (CIT v Horkeri (LN) (1986) 162 ITR 513 (Kar); CIT v Shambulal Nathalal & Co. (1984) 145 ITR 329 (Kar). See also Sunil Srivastava v Union of India (1984) 145 ITR 356 (Pat). A statute is designed to be workable and the interpretation thereof by a court should be to secure that object unless crucial omission or clear direction makes that end unattainable. (CIT v Teja Singh (S) (1959) 35 ITR 408, 414, 415 (SC). The provisions in a taxing statute dealing with machinery for assessment have to be construed according to the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective. Applying the principle laid down by the Privy Council in CIT v Mahaliram Ramjidas (1940) 8 ITR 442 (PC) the Supreme Court in Gursahai Saigal v CIT (1963) 48 ITR 1 (SC) stated that the proper way to deal with a provision laying down machinery for assessment is to give it an interpretation which 'makes the machinery workable'. In Banarsi Debi v ITO (1964) 53 ITR 100 (SC), the Supreme Court however stated that the above rule cannot be made applicable to a charging section, which has to be construed strictly. See also Longman's Green & Co. Ltd. (1932) 17 TC 272, 282 (Per Finlay, J); Robinson v Cory (1934) 18 TC 411, 425 (CA); Drummond v Collins (1915) 6 TC 525, 540 (HL) per Lord Parker.) The court should avoid a construction that attributes irrationality to the legislature and prefer a construction that would render the provision constitutionally valid. (Varghese (KP) v ITO (1981) 131 ITR 597 (SC); CIT v Gopal Rao (G) (1985) 151 ITR 308 (AP). In interpreting a statute, the court should not start with the presumption that the provisions are likely to be abused or misused. (CIT v Sheo Kumari Debi (1986) 157 ITR 13 (Pat) (FB).
However complicated or mind-twisting a provision may be, the court will attempt to give it a meaning. (CIT v Distributors (Baroda) (P) Ltd. (1972) 83 ITR 377 (SC); ITO v Damodar Bhat (M) (1969) 71 ITR 806 (SC).
7. Viewed thus, the only way the reference to Assessing Officer can be treated in harmony with the scheme and purposes of the Act, is to be treat the Assessing Officer having current jurisdiction over assessment of income of the assessee. It is in the light of the above S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 6 of 11 discussions that we were of the opinion that the jurisdiction to hear and determine these appeals, and the related applications, must vest with the bench having jurisdiction over the Assessing Officer concerned, and since there can only one Assessing Officer, as held by Hon'ble Delhi High Court in the case of Aar Bee Industries (supra), that Assessing Officer is the present Assessing Officer located in the jurisdiction of Delhi benches. When we put our above understanding to the parties, in the hearing on 9th May 2018, learned counsel submitted that our reasoning is flawed for more reasons than one. While he did abandon his plea for deciding on the basis of the location of the CIT(A) passing the order impugned in appeal, he, nevertheless, submitted that the appeal before us is with respect to an order passed by the Assessing Officer and, therefore, the appeal has to be defended by that Officer alone. The mere fact that the jurisdiction of the Assessing Officer is shifted subsequently does not alter this fundamental position. It is then submitted that even when the appeals with respect to different years are with different benches of the Tribunal, this is perfectly fine, unless otherwise directed by the President of the Tribunal, since the related Assessing Officers will be located in the jurisdictions of such benches and they will be able to defend the respective orders. It is submitted that there is only one Tribunal, i.e. Income Tax Appellate Tribunal, irrespective of the location of the bench exercising jurisdiction over an appeal, and, therefore, it is not realty necessary to transfer the appeal just because the jurisdiction of the Assessing Officer has changed. On the strength of these arguments, learned counsel urges us to hold that the jurisdiction of the bench, for hearing the appeals and applications, should be decided on the basis of the location of the Assessing Officer framing the assessment impugned in appeal. It is then submitted that once President of the Tribunal, vide order dated 4th February 2014, has specifically rejected the request, filed by the Commissioner (DR), for transfer of all these appeals to Delhi benches, which has jurisdiction over the present Assessing Officer, this rejection order constitutes a "special order" under rule 4(1) determining jurisdiction of Ahmedabad bench in respect of the appeals of the assessee. A copy of the letter dated 31st October 2013 addressed by the then CIT (DR) to the then President of the ITAT, as also President's order rejecting the same, is also filed before us. It is thus contended that the jurisdiction must not be shifted to Delhi benches. Learned Commissioner (DR), however, does not share this perception in principle. He submits that once jurisdiction for assessment is transferred from one Assessing Officer to another Assessing Officer, entire case records of the assessee, including for the preceding assessment years, are transferred to the new Assessing Officer. The appeal is defended by the Assessing Officer having jurisdiction over the assessee at the point of time when the hearing takes place before the appellate authority. It is then pointed out that there is no question of convenience in hearing on account of hearing at a place where the Assessing Officer having earlier jurisdiction, at the point of time when the assessment was framed, is situated, since he has no role at all in the matter. It is submitted that the right course of action indeed is that the Tribunal should also hear the appeal at a place having jurisdiction over the present Assessing Officer, as that will not only be convenient to the Assessing Officer but also the assessee. The plea for not transferring the appeal can at best be for the convenience of the counsel but then that cannot be a consideration in deciding the jurisdiction of the bench which is to hear the matter. Learned CIT (DR) submits that while he is not really very well conversant with complete details of this case, in principle, he does not see any reasons for not transferring the appeal to the benches having jurisdiction over the place where the present Assessing Officer is situated. As regards the plea about the "special order" of the President, as a result of rejection of the request for transfer of appeal, learned CIT (DR) declines to join the issue and leaves it to the S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 7 of 11 bench. In brief rejoinder, learned senior counsel once again reiterates his stand and submits that the jurisdiction to hear these appeals vests with Ahmedabad benches only. We are thus urged to hear the appeals at the earliest, and, in the meantime, deal with the stay applications filed by the assessee. Learned senior counsel also filed before us a decision of the coordinate bench, in the case of DCIT Vs V F Arvind Brands Pvt Ltd (ITA No. 1904/Ahd/2013; order dated 14th February 2018), and submitted that he has just received this judicial precedent and it is stated to support the stand of the assessee. He urged us to take this decision into account, to the extent the same may be relevant, in forming our opinion.
8. We find that, in the case of CIT Vs Aar Bee Industries (supra), Hon'ble Delhi High Court did reject the plea of the assessee that Hon'ble High Court's jurisdiction to hear the appeal against the order passed by the Tribunal depends upon the location of the Assessing Officer at the point of time when the assessment order was framed. While holding so, Their Lordships have observed that "It is a well accepted principle that there can be only one Assessing Officer in respect of a case. At the point of time when the present appeals were filed, the Assessing Officer insofar as all the cases of the respondent were concerned, was the Assessing Officer at Delhi. The fact that the Amritsar Bench of the Tribunal had passed the impugned orders or the fact that the initial assessment orders were passed by the Assessing Officer at Jammu would not be relevant for the purposes of determining the jurisdiction of the court at the point of time at which an appeal under Section 260A of the said Act is filed. It is the date on which the appeal is filed which would be the material point of time for considering as to in which court the appeal is to be filed. On the dates on which the present appeals were filed, the Assessing Officer of the respondent was the Assessing Officer at New Delhi and, therefore, this court would have jurisdiction to entertain these appeals". That was, of course, a case in which the jurisdiction at the time of hearing and the jurisdiction at the time of filing of the appeal was with the same Assessing Officer. As these two position were the same, this judicial precedent cannot be an authority for the proposition that when the jurisdictions at the filing of the appeal and at the time of hearing of an appeal are with different benches, the bench having jurisdiction at the time of filing of appeal will have a precedence over the bench having jurisdiction at the time of the hearing of the appeal. Their Lordships have, inter alia, observed that "...while it is true that the reference to the case is with regard to the jurisdiction of an income-tax authority, it is also true that the jurisdiction of the High Court is determined by the situs of the Assessing Officer. When the Assessing Officer itself has been changed from one place to another, the High Court exercising jurisdiction in respect of the territory covered by the transferee Assessing Officer would be the one which would have jurisdiction to hear the appeal under Section 260A". It is the same approach which governs the jurisdiction of the benches of this Tribunal, as set out in rule 4(1) read with paragraph 4 of the notification- as reproduced earlier in the order. Clearly, therefore, the jurisdiction of the bench depends upon the location of the present Assessing Officer. Hon'ble Delhi High Court has left no ambiguity on this aspect. In any case, as Their Lordships note, there can only be one Assessing Officer in respect of a case, and when that be so, the Assessing Officer having jurisdiction at the point of time of hearing of an appeal is the only Assessing Officer of the assessee. Be that as it may, it is not even learned senior counsel's case before us that it is jurisdiction at the point of time of filing of an appeal which must prevail, and that plea may, in any case, end up in a situation contrary to the law laid down by Hon'ble Supreme Court in the case of Vijay International Udyog (supra). That will clearly be an incongruity and, as is the settled S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 8 of 11 position, the law is to be interpreted in such a manner so as to make it workable rather than redundant (ut res magis valem quam pereat). As for the plea of the learned counsel that the jurisdiction is to be decided on the basis of the Assessing Officer having framed the original assessment order, that plea is categorically rejected by Hon'ble Delhi High Court's judgment in the case of Aar Bee Enterprises (supra), and no judicial precedent to the contrary thereto has been cited before us. We humbly bow before higher wisdom of Hon'ble Court above. As for the decision of the coordinate bench in the case of VF Arvind Brands Pvt Ltd (supra), which was handed over to us by the learned counsel, it holds that the Assessing Officer having jurisdiction at the time of filing of appeal must govern the jurisdiction of the bench of the Tribunal to hear and determine the appeal, and, in doing so, it has followed the decisions of the coordinate benches in the cases of ACIT Vs Chandrasekhar Transport [(2006) 101 TTJ 84 (Vizag)] and ACIT Vs Lata Jain [(2013) 56 SOT 102 (Luck)] but then both of these decisions were rendered much before Hon'ble Delhi High Court's judgment was rendered on 2nd July 2013. These decisions, therefore, must give way to the judicial precedents from Hon'ble Courts above. As regards the decision of Hon'ble Punjab & Haryana High Court, in the case of CIT Vs Motorola India Limited [(2010) 326 ITR 174 (P&H)], and other judgments of Hon'ble Punjab & Haryana High Court, we find that these cases do not really help the case of the assessee as these decisions are confined to the impact of transfer of case under section 127 and legal implications of the same, which is not the issue here, and as these cases do not deal with the basis on which jurisdiction of the appellate forum is to be decided. Whether section 127 order has impact on the jurisdiction of the Courts or Tribunals or not, the jurisdiction of the Courts and Tribunals is to be decided on some basis nevertheless. The decisions of Hon'ble Punjab & Haryana High Court do not deal with the basis on which such jurisdiction decided, but that aspect of the matter is certainly discussed and analysed in the decision of Hon'ble Delhi High Court and the basis of jurisdiction is stated to be the location of the office of the Assessing Officer, and that precisely is the basis adopted in the case of the Tribunal. This aspect is dealt with very well elaborate by Hon'ble High Court, in Aar Bee Industries' case (supra) dealing with this very judicial precedent, and, as Their Lordships indicate, there cannot indeed be any quarrel with the proposition that "the definition of expression 'case' in relation to jurisdiction of an Assessing Officer nothing to do with the territorial jurisdiction of the Tribunal or High Courts merely because section 127 of the Act dealing with transfer has been incorporated in the same chapter" and the fact that the result of transfer under section 127 has no impact on the jurisdiction of the Courts and Tribunals, but the fact remains that "the jurisdiction of the High Court (as indeed of this Tribunal) is determined by the situs of the Assessing Officer" and "When the Assessing Officer itself has been changed from one place to another, the High Court (as indeed the bench of this Tribunal) exercising jurisdiction in respect of the territory covered by the transferee Assessing Officer would be the one which would have jurisdiction to hear the appeal under Section 260A (and under section 253 in the case of the Tribunal)" - all the words in italics supplied by us now. The law laid down by Delhi High Court in the case of Aar Bee Industries (supra), which is in the context of the same basis of deciding jurisdiction as is the basis in the case of this Tribunal's benches, must, therefore, apply directly on the issue. The coordinate bench decision in the case of V F Arvind Brands (supra) does refer to the Aar Bee Industries (supra) but does not deal with the same or analyse the same. As a matter of fact, the conclusions arrived at by the coordinate bench are contrary to the scheme of law visualized by Hon'ble Delhi High Court's decision in the case of Aar Bee Industries (supra). It is only elementary that what constitutes binding S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 9 of 11 force of a judicial precedent is the rationale for the decision, i.e. its ratio decedendi, and not the conclusions arrived at in the judicial precedent. In the oft quoted landmark judgment of Hon'ble Supreme Court, in the case of CIT Vs Sun Engineering Works Pvt Ltd [(1992) 198 ITR 297 (SC)], it is observed that "...... while applying the decision to a latter case, the Courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings". The emphasis, clearly, has to be on the "principles laid down by the decision" rather than the conclusions arrived at in the decision. Ironically, however, the coordinate bench has followed the conclusion arrived at by Their Lordships but ignored the clear reasoning, which is so unambiguously and categorically set out by Their Lordships, on the basis of which conclusion was arrived at. Such an approach cannot but be per incurium and, in the light of the law laid down by Hon'ble AP High Court's full bench decision in the case of CIT Vs B R Constructions [(1993) 202 ITR 222 (AP)-FB)], such a per incurium decision cannot be treated as a binding judicial precedent. In any case, this decision upholds a proposition, i.e. the jurisdiction of the bench is decided on the basis of the location of the office of the Assessing Officer having jurisdiction over the assessee at the point of time when appeal is filed, which the assessee before us does not canvass at all. As a matter of fact, in response to a specific case, learned senior counsel for the assessee fairly states that it is not his case at all, and all that he pleads is that the Assessing Officer having jurisdiction at the point of time when assessment is framed must decide the jurisdiction of the bench which is to hear the appeal- a plea which is, as we have noted above, categorically rejected and disapproved by Hon'ble Delhi High Court in the case of Aar Bee Industries (supra).
9. As regards learned senior counsel's argument that Hon'ble President's rejection of learned CIT(DR)'s request to transfer the appeals constitutes a specific order assigning jurisdiction to these appeals to Ahmedabad benches, we are unable to see any merits in this plea either. While it is not, and it cannot be, for us to sit in judgment over what Hon'ble President decides under rule 4 (1), and, in any case, whatever he decides under rule 4 (1) unquestionably binds us, Hon'ble President's rejection of an application for change cannot be seen as clothing the status quo with legality or conferring a jurisdiction when it does not exist. The rejection of the transfer application, based on the recommendation of the then Vice President concerned, was in the light of the law then holding the field, i.e. CIT Vs Digvijay Chemicals Ltd [(2006) 204 CTR 234 (Del)] but then in the light of subsequent decisions of Hon'ble Delhi High Court in the cases of CIT Vs Sahara India Financial Corporation Ltd [(2007) 294 ITR 363 (Del)], in which this decision was distinguished, the legal position for the Tribunal has changed- which has been subsequently followed in the case of Aar Bee Industries (supra) as well. While so distinguishing the earlier decision, Hon'ble Delhi High Court has observed that "We have gone through both these decisions with the assistance of learned counsel for the parties and while the accepted general principle is that the situs of the Assessing Officer is what determines the High Court having jurisdiction over the case, none of these decisions deal with one important aspect of the case (because it did not arise), namely, what would happen when the situs of the Assessing Officer is changed by an order passed under section 127 of the Act, as has happened in the present case. One important fact in both the above decisions was that even though there was a transfer of jurisdiction from one place to another, the proceedings in respect of the relevant previous year had not been transferred from one S.A. Nos.41 to 45/Ahd/2018 (Arising out of ITA Nos.2680 to 2684/Ahd/2012) AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively Page 10 of 11 jurisdiction to another". The legal position based on which decision was taken has undergone fundamental change. As the law stands now, the situation is materially different and, as a corollary to the legal position in force now, the jurisdiction of the bench of the Tribunal automatically changes as a result of the change of jurisdiction of the Assessing Officer. What the Hon'ble President did at that time, in the light of legal position brought to his notice, was at that point of time was as valid as the transfer of these appeals to the bench with jurisdiction over the present Assessing Officer. There is no conflict in these two position. In any event, unless Hon'ble President specifically varies the jurisdiction of a bench over any matter, in relaxation of or derogation of the general order, such as by notification dated 16th September 1997, the jurisdiction assigned by the general order holds good In a situation in which Hon'ble President issues an order holding jurisdiction of a particular bench to hear appeals of any assessee located anywhere, that is end of the discussions so far as any functionary of this Tribunal is concerned, however such an order cannot be inferred or deduced on the basis of reasoning. As for the fact that any transfer of appeals, from one station to another, is, as a matter of course, authorised by Hon'ble President or Hon'ble Vice President in all the cases is purely an internal procedural matter, which is not related to the requirement of the ITAT Rules, and, therefore, beyond the scope of our discussions.
10. In the light of the discussions above, and in view of the undisputed factual position that the Assessing Officer having jurisdiction to assess the income of the assessee is located in New Delhi, which falls in jurisdiction of Delhi benches, we find that the jurisdiction for hearing of these applications, and hearing of the related appeals, vests in Delhi benches of this Tribunal. However, it is for the Hon'ble President to take a final call on the issue, as is the unambiguous thrust of Rule 4(1) of the ITAT Rules. We, therefore, deem it fit and proper to direct the Registry to place all stay applications and related appeals, as indeed all other appeals of this assessee, before Hon'ble President for appropriate orders. In order to ensure, however, that these applications are not rendered infructuous or nugatory by recovery of the impugned outstanding tax demands in the meantime, we also take on record the categorical assurance so graciously extended by the learned Departmental Representative, not to take any coercive measures for recovery or collection of the outstanding disputed demands till the time the present stay applications are disposed of by the Tribunal.
11. In the result, while, in our considered view, the correct jurisdiction of hearing these appeals is with Delhi benches, the matter is to be placed before Hon'ble President for directing transfer of appeals, as he, under the scheme of rule 4(1) of the ITAT Rules, is the final arbiter on this issue. The stay applications will be taken up on 25th May, 2018. Pronounced in the open court today on the 11th day of May 2018.
Sd/xx Sd/xx
Madhumita Roy Pramod Kumar
(Judicial Member) (Accountant Member)
Ahmedabad, Dated the 11 th day of May, 2018
S.A. Nos.41 to 45/Ahd/2018
(Arising out of ITA Nos.2680 to 2684/Ahd/2012)
AYs: 2008-09, 09-10, 08-09, 09-10 & 08-09 respectively
Page 11 of 11
Copies to: (1) The appellant (2) The respondent
(3) CIT (4) CIT(A)
(5) DR (6) Guard File
By order
Assistant Registrar
Income Tax Appellate Tribunal
Ahmedabad benches, Ahmedabad