Appeal to Appellate Tribunal – Powers of Tribunal – Tribunal cannot transfer case from Bench falling within jurisdiction of a particular High Court to Bench under jurisdiction of different High Court Appeal to High Court – Writ – Competency of appeal – Competency of writ petition – Meaning of ‘every order’ of section 260A – Order must relate to subject matter of appeal – Order transferring case – Appeal not maintainable against order – Writ petition maintainable

Appeal to High Court – Writ – Competency of appeal – Competency of writ petition – Meaning of ‘every order’ of section 260A – Order must relate to subject matter of appeal – Order transferring case – Appeal not maintainable against order – Writ petition maintainable

The assessee was engaged in the business of mining, running a gas unit and generating power through windmills. The relevant period is the A.Ys. 2005-06 to 2008-09. Following centralisation of the cases at Bangalore, the assessments were carried out at Bangalore and in all the assessment orders the A.O. was the Assistant Commissioner. The first appeals against the assessment orders were preferred before the Commissioner (Appeals) at Bangalore, after which the appeals were filed before the Tribunal at Bangalore. On 20th August, 2020, the President of the Tribunal passed an order u/r 4 of the Income-tax (Appellate Tribunal) Rules, 1963 directing that the appeals be transferred from the Bangalore Bench to be heard and determined by the Mumbai Benches of the Tribunal.

The assessee filed a writ petition challenging the order. The Bombay High Court allowed the writ and held as under:

‘i) Section 255 of the Income-tax Act, 1961 deals with the procedure of the Appellate Tribunal. Sub-section (1) of section 255 says that the powers and functions of the Appellate Tribunal may be exercised and discharged by Benches constituted by the President of the Appellate Tribunal from among the Members thereof. Sub-section (5) says that the Tribunal shall have power to regulate its own procedure and that of its various Benches while exercising its powers or in the discharge of its functions. This includes notifying the places at which Benches shall hold their sittings. This provision cannot be interpreted in such a broad manner as to clothe the President of the Tribunal with jurisdiction to transfer a pending appeal from one Bench to another Bench outside the headquarters in another State.

ii) The Income-tax (Appellate Tribunal) Rules, 1963 have been framed in exercise of the powers conferred by sub-section (5) of section 255 of the Act to regulate the procedure of the Appellate Tribunal and the procedure of the Benches of the Tribunal. Sub-rule (1) of Rule 4 empowers the President to direct hearing of appeals by a Bench by a general or special order, and sub-rule (2) deals with a situation where there are more than two Benches of the Tribunal at any headquarters and provides for a transfer of an appeal or an application from one Bench to another within the same headquarters. Thus, this provision cannot be invoked to transfer a pending appeal from one Bench under one headquarters to another Bench in different headquarters.

iii) Section 127 of the Act deals with transfer of any case from one A.O. to another A.O. In other words, it deals with transfer of assessment jurisdiction from one A.O. to another. While certainly the appropriate authority u/s 127 has the power and jurisdiction to transfer a case from one A.O. to another subject to compliance with the conditions mentioned therein, the principles governing the section cannot be read into transfer of appeals from one Bench to another Bench that, too, in a different State or Zone for the simple reason that it is not a case before any A.O.

iv) A careful reading of section 260A(1) would go to show that an appeal shall lie to the High Court from “every order” passed in appeal by the Tribunal if the High Court is satisfied that the case involves a substantial question of law. The expression “every order” in the context of section 260A would mean an order passed by the Tribunal in the appeal. In other words, the order must arise out of the appeal, it must relate to the subject matter of the appeal. An order related to transfer of the appeal would be beyond the scope and ambit of sub-section (1) of section 260A.

v) Clause (2) of Article 226 makes it clear that the power to issue directions, orders or writs by any High Court within its territorial jurisdiction would extend to a cause of action or even a part thereof which arises within the territorial limits of the High Court, notwithstanding the fact that the seat of the authority is not within the territorial limits of the High Court.

vi) The writ petition was maintainable because the petitioner had no other statutory remedy. Having regard to the mandate of Clause (2) of Article 226 of the Constitution, the Bombay High Court had jurisdiction to entertain the petitions.

vii) The fact that the assessee may have expressed no objection to the transfer of the assessment jurisdiction from the A.O. at Bangalore to the A.O. at Mumbai after assessment for the assessment years covered by the search period, could not be used to non-suit the petitioner in his challenge to the transfer of the appeals from one Bench to another Bench in a different State and in a different Zone. The two were altogether different and had no nexus with each other.

viii) The orders dated 19th March, 2020 and 20th August, 2020 were wholly unsustainable in law.’