S. 260A : Territorial jurisdiction to be determined on the basis of place of passing assessment order and not on basis of Assessing Officer exercising jurisdiction over assessee after transfer of case.

[CIT v. Motorola India Ltd., 168 Taxman 1 (P&H)]

For the A.Y. 1996-97, the AO (Bangalore) completed the
assessment of the assessee. The Commissioner (Bangalore) passed an order u/s.263
of the Income-tax Act, 1961, setting aside the assessment order holding that it
was erroneous and prejudicial to the interest of the Revenue and directed to
pass fresh assessment order in accordance with the directions. The Tribunal
(Bangalore) vacated the order of the Commissioner. In the meanwhile, the case of
the assessee was transferred from AO at Bangalore to the AO at Gurgaon. Against
the order of the Tribunal the Revenue preferred an appeal u/s.260A of the Act in
the Punjab and Haryana High Court. The assessee raised preliminary objection
that the jurisdiction u/s.260A lies with the Bangalore High Court and not the
Punjab and Haryana High Court.

The P&H High Court agreed with the preliminary objection of
the assessee and held that the jurisdiction of the Court is to be determined on
the basis of place of passing of assessment order by the AO, and not on the
basis of AO who exercises jurisdiction over assessee after transfer of the case.
Accordingly, the P&H High Court dismissed the appeal on the ground that it had
no territorial jurisdiction over an order passed by the AO at Bangalore.