1. The Revenue by this miscellaneous petition, dt. 8th July, 2005, has requested for recalling of the order of the Tribunal in ITA No.136/Vizag/2005, dt. 26th April, 2005.
2. The revised MA was filed by the Revenue on 23rd Jan., 2006, and it is submitted by the learned Departmental Representative that in the revised petition, the claim is the same, i.e., for recalling/cancellation of the order of the Tribunal in ITA No.163/Vizag/2005. The petition is revised only to bring out the facts properly and precisely before the Tribunal.
3. At the time of hearing before us, it is submitted by the learned Departmental Representative that the regular assessment for the assessment year under consideration was completed on 29th March, 2004 by Asstt. CIT Circle-I, Khammam. The assessee filed appeal before the CIT(A), Vijayawada, who allowed part relief to the assessee. The assessee filed an appeal before Visakhapatnam Bench on 22nd Feb., 2005.
That the Tribunal, Visakhapatnam Bench disposed of the appeal on 26th April, 2005, vide ITA No. 136/Vizag/2005. That as per the standing order under the ITAT Rules, 1963, the jurisdiction of Visakhapatnam Bench extends only to districts of East Godavari, West Godavari, Guntur, Krishna, Srikakulam, Visakhapatnam and Vizianagram of Andhra Pradesh. Rest of the Districts of Andhra Pradesh are within the jurisdiction of Hyderabad Benches of the Tribunal. Thus, jurisdiction of Khammam District is with the Tribunal Hyderabad Bench. That as per Clause (iv) of the standing order under ITAT Rules, 1963, the jurisdiction of Bench will be determined not by the place of business or residence of assessee but by the location of the office of the AO.Undisputedly, the office of the AO was located in Khammam District, which is within the jurisdiction of Hyderabad Bench of Tribunal. He, therefore, submitted that the order passed by the Tribunal, Visakhapatnam Bench in ITA No. 136/Vizag/2005 was without jurisdiction and therefore, it should be recalled/cancelled and the matter may be placed before the Bench, which has jurisdiction over the matter.
4. The learned Counsel for the assessee argued at length. At the outset he objected to the power of the Bench to hear the miscellaneous petition. He stated that if it is the stand of the Revenue that this Bench has no jurisdiction over the present assessee for hearing the appeal, the same would hold good for hearing of MA also. Therefore, the Revenue should not have filed the MA with this Bench and the Bench should not hear the MA.5. Coming to the merits of the MA, he stated that the business of the assessee is scattered at more than one place. Initially its head office was at Sarpaka District Khammam, but the same was shifted to Visakhapatnam in September/October, 2004. Therefore, return for asst.
yr. 2004-05 was filed with the AO at Visakhapatnam. That Kharnmam AO is within the jurisdiction of the administrative CIT, Vijayawada.
Moreover, appeals against the order of the AO at Kharnmam are being heard by the CIT(A), Vijayawada that Vijayawada falls within the jurisdiction of Tribunal, Visakhapatnam Benches. In the above facts and circumstances, the assessee bona fidely filed the appeal against the order of the CIT(A), Vijayawada, with the Tribunal on 22nd Feb., 2005, along with stay petition. That the stay petition was heard and adjudicated in the month of March, 2005. The Revenue has acted upon such stay petition and recovered the tax as was directed by the Tribunal to recover from the assessee. That thereafter, the hearing of the appeal came up before the Tribunal on 6th April, 2005 and 11th April, 2005. The Revenue never objected about the lack of jurisdiction with the Tribunal, Visakhapatnam Bench, but participated in the appeal.
In the above circumstances, he contended that there was no lack of jurisdiction with the Tribunal, Visakhapatnam Benches, to hear and decide the appeal in ITA No. 136/Vizag/2005. That at the time when the appeal was filed by the assessee, the place of the office of the AO was at Visakhapatnam because at that time the assessee had filed the return for asst. yr. 2004-05 with the AO at Visakhapatnam. That under Section 255(5) of the IT Act, it is the prerogative of the President to constitute the Bench. The President can also pass any special order for hearing of the appeal in supersession to the standing order. Therefore, if these appeals were heard by the Visakhapatnam Bench in the absence of any such order, it is only administrative lapse and not the inherent lack of jurisdiction.
6. It is further contended by the learned Counsel that under Section 2,54(2), the Tribunal can rectify only the arithmetical and/or apparent mistake which is apparent from record. It has no power to recall its order except under the conditions prescribed in Rule 24. That under Rule 24, only an ex parte order can be recalled while the order under consideration is not an ex parte order. That since there is no apparent mistake in the order of the Tribunal, Section 254(2) would not be applicable.
7. It is further contended by the learned Counsel that the Revenue can have no grievance because they have already participated in the proceedings before the Tribunal at the time of hearing. Moreover, they have already filed appeal before the jurisdictional High Court, which in any case will remain the same whether the appeal is decided by the Tribunal, Hyderabad Bench or Tribunal, Visakhapatnam Bench. Thus, when the matter is going to be decided on merits by the jurisdictional High Court, it has become irrelevant which Bench of Tribunal passed the impugned order. He relied upon the following decisions: (iii) Seth Banarsi Das Gupta v. CIT 1978 CTR (Del) 183 : (1978) 113 ITR 817 (Del) He concluded his argument by submitting that there is no apparent mistake in the order of the Tribunal, and therefore, the miscellaneous petition furnished by the Revenue should be rejected.
8. We have carefully considered the arguments of both the sides and perused the material placed before us. First, we shall examine the assessee's contention that this Bench of Tribunal has no jurisdiction to hear the miscellaneous application, if it has no jurisdiction to hear the appeal in ITA No. 136/Vizag/2005. Sec. 255(5) of the IT Act reads as under: Subject to the provisions of this Act, the Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.
9. Thus, as per the above section, the Tribunal has the power to regulate its own procedure including the places at which the Benches shall hold their sittings. Rule 4 of the ITAT Rules, 1963, provides "a Bench shall hear and determine such appeal and application made under the Act as the President may by general or special order direct". That the President of Tribunal has passed the order dt. 1st Oct., 1997, specifying the jurisdiction of various Benches of the Tribunal. At p.
3.23 of the Taxman's Income-tax Rules, such standing order is published, the relevant portion of which reads as under: In pursuance of Sub-rule (1) of Rule 4 of the ITAT Rules, 1963, and in supersession of standing order No. 1 of 1987, dt. the 17th July, 1987, an amendment from time to time till date, it is hereby directed that subject to any special order, all appeals and applications from the districts, States and Union Territories specified in column 3 shall, w.e.f. 1st Oct., 1987, be heard and determined by the Benches specified in column 2 of the Table below:S.No. Name and Number of Bench(es) Districts/States/Union Territories(1) (2) (3)1 to 12 ....
Hyderabad Benches (2) Andhra Pradesh (excluding the districts of East Godavari, West24.
Vishakhapatnarn Bench (1) Districts of East Godavari, West Godavari, Guntur, Krishna, 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 office of the AO.10. From the above, it is evident that the President has issued a standing order specifying the jurisdiction of various Benches. Of course, this order is subject to any special order, which may be passed by the President in a specific case or in respect of a particular Bench. From the above standing order, the jurisdiction of the Visakhapatnam Bench extends to District East Godavari, West Godavari, Guntur, Krishna, Srikakulam, Vishakhapatnarn and Vizianagaram of Andhra Pradesh, while the jurisdiction of Hyderabad Bench is in respect of rest of the districts in the State of Andhra Pradesh. Thus, there is no dispute that the jurisdiction of Khammam District of Andhra Pradesh lies with Hyderabad Benches and not with the Visakhapatnam Benches.
From para 4 of the standing order, it is also evident that the jurisdiction of the Bench will be determined not by the place of business or residence of the assessee, but by the location of the office of the AO. Now, admittedly, the AO, Khammam, has passed the assessment order for asst. yr. 2001-02, i.e., the year under consideration. Therefore, the jurisdiction to hear the appeal, arising out of such order would lie with Tribunal, Hyderabad Benches. However, so far as the jurisdiction to hear miscellaneous petition is concerned, we find that the Hon'ble President has passed a special order vide UO No. 31-Ad9ATDZ/2005, dt. 5th Jan., 2006, which reads as under: Sub. Miscellaneous petition in the case of Chandrasekhar Transport, Sarapaka, Khammam District, against the order of the Hon'ble Tribunal, Visakhapatnam, in ITA No. 136/V/2005, dt. 26th April, 2005--Passing of orders without jurisdiction.
Ref. D.O. letter dt. 28th Nov., 2005, of Asstt. Registrar, Tribunal, Visakhapatnam. With reference to the above, it is intimated that the Hon'ble President, Tribunal, has directed that the aforesaid miscellaneous application be put up before Sh. G.D. Agarwal, AM and Shri Hemant Sausarkar, JM for consideration and disposal.
11. In view of above special order, we hold that the Bench at Visakhapatnam consisting of Shri G.D. Agarwal and the undersigned, i.e., Shri Hemant Sausarkar had the jurisdiction to hear this miscellaneous petition. Therefore, we reject the assessee's preliminary objection that this Bench has no jurisdiction to hear the miscellaneous petition.
12. It is not in dispute that the office of the AO, who passed the assessment order under consideration is situated at Khammam, since return of income filed with Asstt. CIT, Khammam, being place of work at Sarpaka, District Khammam. The learned Counsel for the assessee has vehemently contended that since September/October, 2004, the assessee has shifted its place of business from Khammam to Visakhapatnam. The learned Departmental Representative, on the other hand, opposed his contention and claimed that the main place of business still continues at Khammam and in support of this, he referred to the letterhead of the assessee, which is filed in the assessee's paper book in which the head office is shown at Khammam. However, in our opinion, this controversy, i.e., whether the main place of business is at Khammam or shifted to Visakhapatnam is irrelevant because as per para 4 of the standing order reproduced by us in para 9, the jurisdiction of the Bench will be determined by the location of the office of the AO and not by the place of business or residence of the assessee. It is not in dispute that the location of the office of the AO was at Khammam and, therefore, in our opinion, the Tribunal, Visakhapatnam Bench, did not have the jurisdiction over such assessee.
13. It was vehemently contended by the learned Counsel for the assessee that the Revenue had participated in the hearing of the appeal before the Tribunal, and therefore, they cannot now challenge the jurisdiction of the Tribunal. However, in our opinion, while deciding the jurisdiction of the authority, the participation by the parties in the proceedings before them is irrelevant. Merely because the Revenue or the assessee bona fidely believing that the Tribunal has jurisdiction and had argued the matter and the members of the Tribunal also decided the appeal bona fidely believing having jurisdiction over the matter, it will not confer the jurisdiction to the Tribunal, Visakhapatnam Bench, if the jurisdiction lies with the Hyderabad Bench. The jurisdiction has to be decided as per standing order passed by the President, Tribunal, in pursuance to Rule 4 of ITAT Rules.
14. The learned Counsel for the assessee has relied upon the decision of the Hon'ble Karnataka High Court in the case of Madanlal & Co.
(supra), wherein Their Lordship held as under: The lis or the cause for further proceedings arises out of the order of the ITO. It is this order that is sought to be reversed or modified. Therefore, it is reasonable to infer that the said order should be judicially considered only by the High Court having jurisdiction over the particular ITO. An assessee may shift his place of business or residence and it will not be practical to locate such place of residence or business always to determine the High Court's jurisdiction. Law should be clear, certain and simple.
The location of the assessing authority is easily identifiable. A Bench of the Tribunal located at Bangalore may have competent to deal with appeals coming from other States also, because the powers of the Bench of the Tribunal depend upon the orders of President of the Tribunal, as per Rule 4 of the ITAT Rules, 1963. The reference, no doubt, arose out of an appeal filed by the assessee before the Bench of the Tribunal at Bangalore. It is unnecessary to examine whether the said appeal was within the competence of the Bench of the Tribunal at Bangalore, it may be a case of a specific allotment of work by the President of the Tribunal under Rule 4 referred to above; or, it may be a case of a curable mistake; it may also be a case of a total lack of jurisdiction. As this Court has no competence to consider this reference, it need not go into this question pertaining to the jurisdiction of the Bench of the Tribunal at Bangalore in entertaining the appeal of the assessee.
Consequently, this reference to this Court is not valid and it cannot be considered by this Court; the reference is accordingly returned unanswered.
15. In our opinion, the ratio of the above decision would not support the case of the assessee but it will support the case of the Revenue.
In the above case, the High Court has held that even if the assessee has shifted the business, the jurisdiction has to be decided on the basis of location of the assessing authority, which is easily identifiable. In this case, it is evident that the dispute is about the location of the place of business, but there is no dispute about the location of the place of the AO, who passed the order because the order was passed by the AO, Khammam. Their Lordships of Karnataka High Court, refused to answer the reference because they did not have the jurisdiction considering the location of the assessing authority.
Therefore, applying the ratio of above decision, considering the location of the assessing authority, the Tribunal, Visakhapatnam Bench, had no jurisdiction.
16. The facts in the case of India Glycols Ltd. & Am. (supra), were also altogether different, where the assessee was regularly filing the return in Calcutta and was being assessed at Calcutta, his PA number was also allotted by the CIT, Calcutta. The Dy. CIT, Special Range, Moradabad, issued notice to the assessee for filing of return. The assessee filed the writ petition before the Hon'ble High Court for cancellation of such notice on which their Lordship held as under: (i) That the petitioner had already submitted its returns for the assessment years for which the notice had been issued and the orders had been passed. The petitioner-company, therefore, in effect, would be compelled to file fresh returns and to be assessed once again and it may so happen that because of late filing of returns the petitioner might be subjected to penalty and also payment of interest. In the premises the petitioner had been able to establish that part of the cause of action had arisen within the territorial jurisdiction of the Court in relation to this proceedings, the Calcutta High Court could consider the writ petition.
17. Thus, the facts of the case before the Hon'ble Calcutta High Court were altogether different and the above case will have no bearing to the issue under consideration before us.
18. The learned Counsel for the assessee has also relied upon the decision of Seth Banarsi Das Gupta (supra), wherein the assessee had filed the reference application before the Hon'ble Delhi High Court in respect of order of the Tribunal, Delhi Benches. However, the Hon'ble High Court returned the reference to the Tribunal because the AO was located at Meerut (UP), which falls within the jurisdiction of Hon'ble Allahabad High Court. Thus, in our opinion, the above decision would also support the case of the Revenue that the jurisdiction of the Tribunal is to be determined with reference to the location of the AO.We have already held above that as per location of the AO, who passed the assessment order under consideration, the jurisdiction lies with Tribunal, Hyderabad Bench, and not with Tribunal, Visakhapatnam Bench.
In view of above, we recall the order of the Tribunal in ITA No.136/Vizag/2005 and direct the registry to transfer it to the Tribunal, Hyderabad Benches, for adjudication in accordance with law.