The Commissioner Of Income Tax (Exemptions), Chandigarh v. M/S Baba Amarnath Educational Society, Moga

ITA No.232 of 2016 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.232 of 2016 Decided on : 25.10.2018 The Commissioner of Income Tax (Exemptions), Chandigarh Versus ....... Appellant M/s Baba Amarnath Educational Society, Moga ...... Respondent CORAM : HON'BLE MR. JUSTICE AJAY KUMAR MITTAL, JUDGEHON'BLE MR. JUSTICE AVNEESH JHINGAN, JUDGE Present :Mr. Denesh Goyal, Senior Standing Counselfor the appellant. Mr. Pankaj Jain, Sr. Advocate with Mr. Sachin Bhardwaj, Advocatefor the respondent. * * * AVNEESH JHINGAN, J. The revenue has filed the present appeal under Section 260A ofthe Income Tax Act, 1961 (for brevity, 'the Act') against the order dated28.10.2015 passed by Income Tax Appellate Tribunal, Chandigarh(hereinafter referred to as 'Tribunal') passed in M.A. No. 9/CHD/2014 in ITANo. 825/Chd/2011. 2.As per the appellant, following substantial questions of lawarise for consideration in the present appeal:- i)Whether the ITAT has erred in passing the impugnedorder after going beyond the jurisdiction and is to thatextent bad in law.order after going beyond the jurisdiction and is to thatextent bad in law. ii)Whether the learned ITAT while deciding themiscellaneous application has erred in not considering anorder dated 04.09.2013 passed by the President, ITATdirecting the cases of assessee for A.Y. 2009-10 to betransferred from Chandigarh Bench to Amritsar Bench,which clearly substantiate the contention of thedepartment and also goes to the root of the matter on theground that the same was only an administrative order.miscellaneous application has erred in not considering anorder dated 04.09.2013 passed by the President, ITATdirecting the cases of assessee for A.Y. 2009-10 to betransferred from Chandigarh Bench to Amritsar Bench,which clearly substantiate the contention of thedepartment and also goes to the root of the matter on theground that the same was only an administrative order.iii) Whether the Hon'ble ITAT has erred in passing the orderwithout considering the decision of Hon'ble SupremeCourt in judgment reported as 1987(1) RCR (Criminal)371 (SC) that even a right decision by a wrong forum isno decision and non-existent in the eyes of law evenwhen the jurisdictional H.C. had followed the ratio in ajudgment reported as 2009(1) RCR (Criminal) 414(P&H).without considering the decision of Hon'ble SupremeCourt in judgment reported as 1987(1) RCR (Criminal)371 (SC) that even a right decision by a wrong forum isno decision and non-existent in the eyes of law evenwhen the jurisdictional H.C. had followed the ratio in ajudgment reported as 2009(1) RCR (Criminal) 414(P&H). 3.The brief facts necessary for adjudication of the present appealare that the assessee-society applied for grant of registration under Section12AA of the Act. The Commissioner of Income Tax-III, Ludhiana (CIT)vide order dated 28.06.2011 rejected the application. The said order wasassailed by the assessee in appeal before the Tribunal at Chandigarh. TheTribunal allowed the appeal of the assessee-society vide order dated29.12.2011 and the CIT was directed to grant registration. In pursuance tothe order of the Tribunal, registration was granted under Section 12AA ofthe Act on 09.02.2012. At that stage, it was realised that the assessee-society was situated at Moga and the territorial jurisdiction would be that of ITA No.232 of 2016 Amritsar Bench of the Tribunal instead of Chandigarh Bench. 4.The revenue moved a miscellaneous application stating that theorder passed by the Chandigarh Bench Tribunal is without jurisdiction as thecase falls within the territorial jurisdiction of Amritsar Bench. Theapplication was dismissed vide order dated 28.10.2015. Hence, the presentappeal. 5.Heard learned counsel for the parties. ITA No.232 of 2016 Amritsar Bench of the Tribunal instead of Chandigarh Bench. 4.The revenue moved a miscellaneous application stating that theorder passed by the Chandigarh Bench Tribunal is without jurisdiction as thecase falls within the territorial jurisdiction of Amritsar Bench. Theapplication was dismissed vide order dated 28.10.2015. Hence, the presentappeal. 5.Heard learned counsel for the parties. 6.Learned counsel for the appellant argued that Chandigarh Benchof the Tribunal did not have the territorial jurisdiction with regard to the caseof the assessee-society as it was based at Moga and the same falls within thejurisdiction of Amritsar Bench of the Tribunal. It was urged that the orderpassed was without jurisdiction and the Tribunal erred in dismissing themiscellaneous application filed by the appellant. He further relied upon thedecision of the Supreme Court in the case of Pandurang vs. State ofMaharashtra, 1987 AIR (SC) 535. 7.Learned counsel for the assessee-society supported the order ofthe Tribunal by urging that there was no error apparent on record and thecase did not fell within the ambit of Section 254 of the Act. Further, theTribunal rightly dismissed the miscellaneous application as the issue ofjurisdiction was not raised by the revenue at the time of hearing of theappeal. He contended that the decision of the Tribunal has not beenchallenged on merits and the same is sustainable in law. Support wasgathered from the decision of the Rajasthan High Court in the case titled as Apex Metchem (P) Ltd. vs. Income Tax Appellate Tribunal & ors., CWPNo.5081 of 2008, decided on 08.05.2009, 8.The contention raised by learned counsel for the appellant ITA No.232 of 2016 deserves acceptance. 9.It could be disputed by learned counsel for therespondent/assessee that Chandigarh Bench of the Tribunal did not possessjurisdiction to hear the appeal as the assessee-society was situated at Moga.At this stage, the territorial jurisdiction of Chandigarh Bench and AmritsarBench of Tribunal are reproduced below:- Chandigarh Benches:- Punjab (excluding theDistricts of Amritsar, Bhatinda, Faridkot,Firozpur, Gurdaspur, Hoshiarpur, Jalandhar andKapurthala). Haryana (excluding the Districts ofBhiwani, Faridabad, Gurgaon, Hissar, Jhajjar,Karnal, Mohindergarh, Panipat, Rewari, Rohtakand Sonepat). Himachal Pradesh. Union Territoryof Chandigarh. Amritsar Bench :-Districts of Amritsar, Bhatinda,Faridkot, Mansa, Muktsar, Moga, Firozpur,Gurdaspur, Hoshiarpur, Jalandhar, Nawasahahrand Kapurthala of Punjab. State of Jammu &Kashmir. 10.From the above, it is evident that the appeal ought to have beenheard by the Amritsar Bench of the Tribunal. 11.The contention raised by learned counsel for the assessee lacksmerit. Section 254(2) as on statute book at relevant time is reproducedbelow :- “The Appellate Tribunal may, at any time withinfour years from the end of the month in which theorder was passed, with a view to rectifying anymistake apparent from the record, amend anyorder passed by it under sub-section (1), and shallmake such amendment if the mistake is brought toits notice by the assessee or the Assessing Officer: Provided that an amendment which has the effectof enhancing an assessment or reducing a refundor otherwise increasing the liability of theassessee, shall not be made under this sub-sectionunless the Appellate Tribunal has given notice tothe assessee of its intention to do so and hasallowed the assessee a reasonable opportunity ofbeing heard:” 12.From the perusal of the provision, it is evident that in case, thereis an error apparent from the record, the Tribunal is empowered to amend theorder passed under Sub-Section (1) of Section 254 of the Act. 13.In the present case, the undisputed fact is that Chandigarh Provided that an amendment which has the effectof enhancing an assessment or reducing a refundor otherwise increasing the liability of theassessee, shall not be made under this sub-sectionunless the Appellate Tribunal has given notice tothe assessee of its intention to do so and hasallowed the assessee a reasonable opportunity ofbeing heard:” 12.From the perusal of the provision, it is evident that in case, thereis an error apparent from the record, the Tribunal is empowered to amend theorder passed under Sub-Section (1) of Section 254 of the Act. 13.In the present case, the undisputed fact is that Chandigarh Bench of the Tribunal did not possess the territorial jurisdiction to hear anddecide the appeal. This itself is an error apparent from record. The samecannot be ignored merely on the ground that the issue of jurisdiction was notraised at the time of hearing of the appeal. 14.The contention of learned counsel for the assessee that the orderof the Tribunal has not been challenged on merits and the same issustainable in law does not enhance the case of the assessee. If the Tribunallacks territorial jurisdiction, the order passed is nullity being withoutjurisdiction. The decision being right or wrong would not affect thejurisdiction of the Tribunal. The Supreme Court in the case of Pandurang'scase (supra)held as under :- “When a matter required to be decided by aDivision Bench of the High Court is decided bya learned Single Judge, the judgment would bea nullity, the matter having been heard by aCourt which had no competence to hear thematter, it being a matter of total lack ofjurisdiction . The accused was entitled to be heard by at least two learned Judges constituting aDivision Bench and had a right to claim a verdictas regards his guilt or innocence at the hands ofthe two learned Judges. This right cannot be takenaway except by amending the rules. So long asthe rules are in operation it would be arbitraryand discriminatory to deny him this rightregardless of whether it is done by reason ofnegligence or otherwise. Deliberately, it cannotbe done. Negligence can neither be invoked asan alibi, nor can cure the infirmity orillegality, so as to rob the accused of his rightunder the rules. What can be done only by atleast two learned Judges cannot be done by onelearned Judge. Even if the decision is right onmerits, it is by a forum which is lacking incompetence with regard to the subject matter.Even a ’right’ decision by a ’wrong’ forum is nodecision. It is non-existent in the eye of law.And hence a nullity. The Judgment under appealis therefore no judgment in the eye of law.” 15.It was held by the Apex Court that unless the rules are amended,the decision given by the single Bench on the matter, which was required tobe heard by the Division Bench, would be nullity and a right decision bywrong forum is no decision. 16.Reliance placed by learned counsel for the assessee on ApexMetchem's case (supra)is misplaced. The Rajasthan High Court therein was dealing with a case where the order of the Tribunal under Section254(1) of the Act was recalled on the basis of the order passed by thePresident of the Mumbai Tribunal in exercise of power under Rule 4 ofITAT Rules 1963 transferring appeals filed by the appellant from Jaipur to ITA No.232 of 2016 Mumbai Bench. It was noticed that the said order was not available onrecord, consolidating the appeal being heard at Mumbai Bench. In theabsence thereof, it was held that there was no mistake apparent on therecord. 16.Reliance placed by learned counsel for the assessee on ApexMetchem's case (supra)is misplaced. The Rajasthan High Court therein was dealing with a case where the order of the Tribunal under Section254(1) of the Act was recalled on the basis of the order passed by thePresident of the Mumbai Tribunal in exercise of power under Rule 4 ofITAT Rules 1963 transferring appeals filed by the appellant from Jaipur to ITA No.232 of 2016 Mumbai Bench. It was noticed that the said order was not available onrecord, consolidating the appeal being heard at Mumbai Bench. In theabsence thereof, it was held that there was no mistake apparent on therecord. 17.The said case is not applicable in the facts of the present case.Here, there is no dispute that Amritsar Bench of the Tribunal had theterritorial jurisdiction to hear the appeal. The orders dated 29.12.2011 and28.10.2015 (Annexures A-1 and A-2) passed by the Chandigarh Bench ofthe Tribunal are, thus, set aside and the matter is sent to the Amritsar Benchof the Tribunal to decide the appeal afresh. The questions claimed areanswered accordingly. 18.The appeal is allowed. (AJAY KUMAR MITTAL) JUDGE October 25, 2018anju (AVNEESH JHINGAN) JUDGE Whether speaking/reasoned: Yes Whether reportable :Yes