Case Note & Summary
The petitioner, MSPL Limited, challenged two orders: (1) a speaking order dated 19.03.2020 passed by the Income Tax Appellate Tribunal (ITAT), Bangalore Bench, expressing its view that the revenue's request to transfer appeals from Bangalore to Mumbai Benches was justified; and (2) an order dated 20.08.2020 by the President of ITAT directing the transfer of those appeals to Mumbai Benches. The appeals pertained to assessment years 2005-06 to 2008-09. The petitioner argued that the Bangalore Bench had no jurisdiction to pass a speaking order on the transfer request, as the power to transfer cases under Section 255(1) of the Income Tax Act, 1961 vests solely with the President. Further, the President's order was passed without hearing the petitioner, violating natural justice. The revenue contended that the Bangalore Bench's order was merely a recommendation and the President had the power to transfer. The High Court held that the President's power to transfer is quasi-judicial and cannot be delegated to a Bench. The Bangalore Bench's speaking order was without jurisdiction and void. The President's order was also quashed as it was based on the invalid speaking order and passed without hearing the assessee. The court directed that the appeals be heard and decided by the ITAT, Bangalore Bench, in accordance with law.
Headnote
A) Income Tax Appellate Tribunal - Transfer of Appeals - Jurisdiction of President - Section 255(1) of the Income Tax Act, 1961 - The President of ITAT has exclusive power to transfer cases from one Bench to another, which is quasi-judicial and cannot be delegated to a Bench. The Bangalore Bench's speaking order expressing views on transfer was without jurisdiction and violated natural justice as the assessee was not heard. (Paras 2-3, 10-12)
B) Income Tax Appellate Tribunal - Speaking Order by Bench - Validity - Section 255(1) of the Income Tax Act, 1961 - A Bench of ITAT cannot pass a speaking order on a transfer request as it usurps the President's power. Such an order is void ab initio and liable to be quashed. (Paras 3, 10-12)
C) Natural Justice - Transfer of Cases - Hearing - Section 255(1) of the Income Tax Act, 1961 - The assessee must be heard before any order of transfer is passed. The President's order dated 20.08.2020 was passed without hearing the assessee, violating principles of natural justice. (Paras 10-12)
Issue of Consideration
Whether the President of the Income Tax Appellate Tribunal can delegate the power to transfer cases to a Bench, and whether the Bangalore Bench had jurisdiction to pass a speaking order on the transfer request.
Final Decision
The High Court quashed both the order dated 19.03.2020 of the ITAT Bangalore Bench and the order dated 20.08.2020 of the President of ITAT. The court directed that the appeals be heard and decided by the ITAT, Bangalore Bench, in accordance with law.
Law Points
- Jurisdiction of ITAT President to transfer cases
- Delegation of quasi-judicial power
- Natural justice in transfer proceedings
- Speaking order by ITAT Bench on transfer request
- Section 255(1) Income Tax Act
- 1961
Case Details
2021 LawText (BOM) (05) 23
WRIT PETITION (L) NO.3865 OF 2020
Ujjal Bhuyan, Milind N. Jadhav
J. D. Mistri, Nitesh Joshi, Atul K. Jasani, Suresh Kumar, R. V. Desai, Parag Vyas, Karuna Yadav
Principal Commissioner of Income Tax-1, Mumbai; Income Tax Appellate Tribunal; Union of India
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging orders of ITAT Bangalore Bench and President of ITAT regarding transfer of appeals.
Remedy Sought
Quashing of order dated 19.03.2020 of ITAT Bangalore Bench and order dated 20.08.2020 of President of ITAT, and direction to continue hearing of appeals by ITAT Bangalore Bench.
Filing Reason
Petitioner challenged the speaking order of ITAT Bangalore Bench expressing views on transfer and the subsequent transfer order by the President, alleging lack of jurisdiction and violation of natural justice.
Previous Decisions
ITAT Bangalore Bench passed a speaking order on 19.03.2020 expressing that revenue's transfer request was justified; President of ITAT passed order on 20.08.2020 directing transfer of appeals to Mumbai Benches.
Issues
Whether the President of ITAT can delegate the power to transfer cases to a Bench?
Whether the Bangalore Bench had jurisdiction to pass a speaking order on the transfer request?
Whether the transfer order was passed in violation of natural justice?
Submissions/Arguments
Petitioner: The Bangalore Bench had no jurisdiction to pass a speaking order on transfer; the President's power under Section 255(1) is quasi-judicial and cannot be delegated; the transfer order was passed without hearing the assessee.
Respondents: The Bangalore Bench's order was only a recommendation; the President has the power to transfer cases; no violation of natural justice as the assessee was given an opportunity.
Ratio Decidendi
The power of the President of ITAT under Section 255(1) of the Income Tax Act, 1961 to transfer cases is quasi-judicial and cannot be delegated to a Bench. A Bench cannot pass a speaking order on a transfer request as it usurps the President's power. Any order of transfer must be passed after hearing the affected party, adhering to principles of natural justice.
Judgment Excerpts
By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 19.03.2020 passed by the Income Tax Appellate Tribunal, Bangalore Bench in ITA Nos.371 to 374/ Bang/2011 for the assessment years 2005-06 to 2008-09 as well as order dated 20.08.2020 passed by the President, Income Tax Appellate Tribunal and further seeks a direction that hearing of the above appeals be continued and concluded by the Income Tax Appellate Tribunal, Bangalore Bench.
By the order dated 19.03.2020, Bangalore Bench of the Income Tax Appellate Tribunal passed a speaking order expressing its views that request made by the revenue for transfer of the said appeals from the Bangalore Bench of the Income Tax Appellate Tribunal to Mumbai Benches of the Income Tax Appellate Tribunal is justified and to place the said views before the President to enable the President of the Income Tax Appellate Tribunal to pass orders on the request for transfer of the appeals from the Bangalore Bench to Mumbai Benches.
Procedural History
The petitioner filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging the speaking order of ITAT Bangalore Bench dated 19.03.2020 and the transfer order of the President of ITAT dated 20.08.2020. The High Court reserved judgment on 29.01.2021 and pronounced it on 21.05.2021.
Acts & Sections
- Income Tax Act, 1961: 255(1)
- Constitution of India: 226
