ACIT CIRCLE-4, AGRA V. JHANSI DEVELOPMENT AUTHORITY, JHANSI

MA 3/AGR/2022

AI Insights

The case involves multiple miscellaneous applications filed by the Department of Income Tax against various orders of the Income Tax Appellate Tribunal (ITAT), Agra. These applications were filed to challenge the territorial jurisdiction of ITAT, Agra, and to seek rectification of the orders passed. The Department argued that the ITAT, Delhi, had jurisdiction over the cases due to the location of the Assessing Officers in Ghaziabad. The Tribunal dismissed the applications, affirming its jurisdiction and rejecting the need for rectification of the earlier orders, citing the principles laid down in various Supreme Court and High Court judgments regarding territorial jurisdiction and the scope of section 254(2) of the Income-tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780008 (ITAT-AGRA)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 16-02-2022
• Other Referred Cases: PCIT v. ABC Papers Ltd., Om Prakash Agarwal v. Vishan Dayal, Subhash Mahadevasa Habib v. Nemasa Ambasa Dharmadas (D) by LRs and Ors., Hasham Abbas Sayyad vs. Usman Abbas Sayyad, Punjab National Bank Ltd. vs. Atin Arora & Anr
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE; REVENUE; ANIL KUMAR; ANIL KUMAR
• Assessee Lawyers: RAJENDRA SHARMA; HARSH KUMAR AGRAWAL; DEEPAK SINGH
• Keywords: Set aside; Period of limitation
• Section: 143(3); 11; 12

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER MA Nos. 04 & 05, 01, 02 & 03/Agr/2022 (arising out of ITA Nos.256 & 355/Agr/2014, 149, 150, 151/Agr/2017 Assessment Years: 2010-11 & 2010-11, 2011-12, 2012-13 & 2013-14 DCIT, Circle-4, Agra (Now DCIT(Exemption), Ghaziabad. Vs. Jhansi Development Authority, Commissionery Campus, Jhansi PAN : AAALJ0068K (Applicant) (Respondent) AND MA Nos. 06, 07, 08 & 09/Agr/2022 (arising out of ITA Nos.177, 183, 439 & 216/Agr/2014 Assessment Years: 2009-10, 2009-10, 2010-11 & 2011-12 DCIT, Circle-1 Agra Vs. Agra Development Authority, Jaipur House, Agra. PAN : AAALA0081F (Applicant) (Respondent) Assessee by Sh. Rajendra Sharma, Advocate & Sh. Harsh Kumar Agrawal, CA Department by Sh. Anil Kumar Sr. DR Assessee by Sh. Deepak Singh, Advocate Department by Sh. Anil Kumar Sr. DR Date of hearing 22.08.2025 Date of pronouncement 06.10.2025 Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 2 | P a g e ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER: The miscellaneous applications Nos. 04, 05, 01, 02 & 03/Agr/2022 are purportedly filed u/s. 254(2) of the Income-tax Act, 1961(hereinafter referred to as the “Act”) against the consolidated order dated 13.01.2021 passed by this Tribunal. 2. The miscellaneous applications Nos. 06, 07, 08 & 09/Agr/2022 are purportedly filed u/s. 254(2) of the Income-tax Act, 1961(hereinafter referred to as the “Act”) against the consolidated order dated 17.05.2021 passed by this Tribunal. 3. At the very outset, it is noticed that all these miscellaneous applications were filed on 17.02.2022 against the said consolidated orders dated 13.01.2021 and 17.05.2021 beyond the prescribed period of six months to be computed from the end of the month in which these orders were passed. 4. We take judicial notice of the fact that entire duration of delay caused in filing these miscellaneous applications overlaps the period of spread of global pandemic COVID-19. This fact has also been taken care of by Hon’ble Supreme Court in Misc. app. No. 21/2022 in Misc. app No. 665/2021 in suo-moto W.P(c) No. 3/2020 in civil original jurisdiction and in re-cognizance of extension of limitation with miscellaneous application No. Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 3 | P a g e 29/2022, in miscellaneous application No. 655/2021 in suo-moto petition(c) no. 03/2020 and vide para 5(1) of its order dated 10.01.2022, directing that its order dated 23.03.2020 is restored and in continuation of the subsequent order dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings after exclusion of the aforesaid duration. Therefore, the period from the date of impugned orders, i.e., 13.01.2021 & 17.05.2021 to 28.02.2022 already stood excluded from the period of limitation. Hence, the limitation for the present miscellaneous applications begins from 01.03.2022 and the present applications have been moved on 17.02.2022 well within the period of six months. Therefore, in the interest of justice and in view of aforesaid order of Hon’ble apex court, the said delay in filing these miscellaneous applications stood condoned. 5. The facts and issues related to all these miscellaneous applications are almost similar; hence, for the sake of brevity and convenience, all these miscellaneous applications are being decided by this common order. The facts of miscellaneous application No. 04/Agr/2022 (in ITA No. 256/Agr/2014 – A.Y. 2010-11) are only being narrated as under : Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 4 | P a g e MA No. 04/Agr/2022 (in ITA No. 256/Agr/2014 – A.Y. 2010-11): 6. According to the facts of the miscellaneous application No. 04/Agr/2022, revenue states that in this case, return of income was filed on 07.10.2010 declaring income of Rs. Nil. Thereafter, the case was selected for scrutiny and assessment was completed on 19.08.2013 at total income of Rs.30,48,93,944/- after denying exemption u/s 11 & 12 of the IT Act. The assessee preferred an appeal before Ld. CIT(A) against the order of Assessing Officer, who vide order dated 10.03.2014 partly allowed the appeal of the assessee after deleting the addition of Rs. 21,66,09,921/-. However, the remaining additions were confirmed by the Ld. CIT(A). The Department preferred an appeal before Hon'ble ITAT against the order of the CIT(A). While filing appeal before the ITAT, some details viz. jurisdiction of the AO and date of assessment order etc. were mentioned wrong, inadvertently in Form 36. Therefore, proposal for filing of Miscellaneous Application was made along with five grounds, along with misc. application and two additional grounds mentioned separately, praying to quash the order passed by Ld. CIT(Appeals) and for restoration of the order of Assessing Officer with further pleading that the decision passed by this Bench is without jurisdiction, hence, assessee’s appeal be merged with the pending appeal of the department with ITAT, New Delhi, (filed vide ITA No. 4260/Del/2017). Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 5 | P a g e 7. Perused the records and heard the ld. Representative for assessee and ld. DR for revenue. 8. It appears from the perusal of the revenue’s miscellaneous application that the revenue has basically challenged the territorial jurisdiction of ITAT, Agra for the first time after culmination of the proceedings in aforesaid appeals, on the ground that the jurisdiction to decide the appeal was vested in ITAT, Delhi. Since the question of jurisdiction goes to the very root of the case, we deem it just and proper to address the issue of jurisdiction in this miscellaneous application. 9. According to Rule 4 of the standing order under Income Tax (Appellate Tribunal) Rules, 1963, 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 Assessing Officer. Hon’ble Supreme Court, in PCIT v. ABC Papers Ltd., (2022) 289 Taxman 150/ 447 ITR 1(SC), has reinforced this principle by holding that the territorial jurisdiction is determined on the basis of the situs of the Assessing Officer. 10. In the instant case, the assessment order dated 19.08.2013 has been passed u/s. 143(3) of the Act by the Assessing Officer, Agra. The first appellate authority was at Agra. The territorial jurisdiction to entertain second appeal on the basis of situs of assessing officer shall be at Agra. Revenue has, thus, failed to point out any mistake apparent from record. Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 6 | P a g e Thus, the miscellaneous application No. 04/Agr/2022 thus stands dismissed. MA Nos. 05 & 01/Agr/2022(in ITA No. 355/Agr/2014 & 149/Agr/2017 – A.Yrs. 2010-11 and 2011-12): 11. In both these miscellaneous matters, the Assessing Officers, passing the respective assessment orders dated 19.08.2013 and 30.09.2014 respectively, are located at Agra, hence, our aforesaid finding shall mutatis mutandis apply in these two miscellaneous applications also and are thus liable to be dismissed accordingly. MA Nos. 02 & 03/Agr/2022 (in ITA Nos, 150 & 151/Agr/2017(A.Yrs. 2012-13 & 2013-14): 12. In both these matters, the Assessing Officers are situated at Ghaziabad while passing the assessment orders u/s. 143(3) of the Act dated 16.03.2015 and 03.03.2016 respectively. In such situation, the jurisdiction was vested in ITAT, Delhi on the basis of the location of the Assessing Officer at Ghaziabad as per the dictum propounded in ABC Papers Ltd. (supra). However, revenue never questioned the territorial jurisdiction of ITAT Agra before the culmination of proceedings in the relevant appeals. Hence, the question now arises as to whether the issue of territorial jurisdiction can be raised by the revenue for the first time after culmination of proceedings by the Tribunal at Agra in aforesaid ITAs, which passed the consolidated order on 13.01.2021. Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 7 | P a g e 13. We take guidance from section 21 and 21A of the Civil Procedure Code, which deals with the objections with respect to the territorial jurisdiction. Section 21 reads as under : “21(1). Objections to jurisdiction.-[(1)] No objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was - taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled at or before such settlement, and unless there has been a consequent failure of justice.” 21(2)……………………………………………………………………….. 21(3). No objection as to the competence of the executing Court with reference to the local limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the executing Court at the earliest possible opportunity, and unless there has been a consequent failure of justice. 21A. Bar on suit to set aside decree on objection as to place of suing.- No suit shall lie challenging the validity of a decree passed in a former suit between the same parties, or between the parties under whom they or any of them claim, litigating under the same title, on any ground based on an objection as to the place of suing. Explanation.-The expression “former suit” means a suit which has been decided prior to the decision in the suit in which the validity of the decree is questioned, whether or not the previously decided suit was instituted prior to the suit in which the validity of such decree is questioned ].” 14. Section 21(1) of the CPC quoted above can be taken as a guiding factor, which emphasizes that the objection regarding territorial jurisdiction must be raised at the earliest possible opportunity and failure to do so will lead to waiver of such objections unless there is a demonstrated failure of justice. In Om Prakash Agarwal v. Vishan Dayal, AIR 2018 SC 5486, the Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 8 | P a g e Supreme Court emphasized that the primary objective of section 21 of the Code of Civil Procedure is to prevent parties from raising objections to territorial jurisdiction only after an infavourable decision is rendered against them. The court highlighted that section 21 embodies a clear legislative policy aimed at discouraging technical objection that could led to unnecessary retrials on the basis of merits. 15. In Subhash Mahadevasa Habib v. Nemasa Ambasa Dharmadas (D) by LRs and Ors., AIR 2007 SC 1828, the Hon’ble Supreme Court held that the Code of Civil Procedure distinguishes between lack of inherent jurisdiction and objections to territorial or pecuniary jurisdiction. A decree passed by a court lacking inherent jurisdiction is void, whereas one passed by a court lacking territorial jurisdiction is not automatically void but voidable, subject to the conditions of section 21. Section 21 states that objection regarding the place of suing can only be raised at the earliest opportunity in the trial court and must also demonstrate a failure of justice. Further, section 21A bars filing suits to challenge a decree’s validity based on objections related to the place of suing. 16. In Hasham Abbas Sayyad vs. Usman Abbas Sayyad (2007) 2 SCC 355, Apex court has held that a distinction must be made between a decree passed by a court, which has no territorial or pecuniary jurisdiction in the light of section 21 of the Code of Civil Procedure and a decree passed by a Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 9 | P a g e court having no jurisdiction in regard to the subject matter of the suit. Whereas in the former case, the appellate court may not interfere with the decree unless prejudice is shown. Ordinarily, the second category of the cases would be interfered with. 17. In Punjab National Bank Ltd. vs. Atin Arora & Anr, 2025 Live Law (SC) 27, Hon’ble Supreme Court has held that the High Court erred in setting aside NCLT order of rejection of application for recall. It mentioned that the High Court overlooked the provisions of section 21 of CPC, which says that the objections regarding place of suing shall not be allowed unless they are raised before the court/tribunal of the first instance at the earliest possible opportunity. 18. The sum and substance of the precedents referred herein above is that the territorial jurisdictional challenge should not be used as a mere procedural tool to overturn the decisions retrospectively. In the instant matter, the consolidated order dated 13.01.2021 has been passed on merit consisting 108 pages after duly considering the synopsis of revenue and after taking entire submissions of the parties into consideration. Revenue seems to have raised the objection with respect to territorial jurisdiction only after unfavourable decision was rendered against it. Revenue has miserably failed to show that what prejudice was caused to it and how the failure of justice is caused to it by the decision on merit. In such Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 10 | P a g e circumstances, revenue’s failure to raise objection with respect to territorial jurisdiction at the earliest possible opportunity before the culmination of the proceedings will lead to waiver of such objections. 19. That apart, the scope of section 254(2) of the Act has been examined by Hon’ble Bombay High Court, vide order dated 06.11.1992 passed in Commissioner of Income Tax (IT-4) V M/s. Reliance Telecom Limited, reported in [1993] 203 ITR, wherein Hon’ble High Court has held as under: “ Under section 254(2) of the Income-tax Act, 1961, the Appellate Tribunal may, \"with a view to rectifying any mistake apparent from the record\", amend any order passed by it under sub-section (1) within the time prescribed therein. It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a power of amending its order. The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. The Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion” 20. Hon’ble Supreme court, vide order dated 03.12.2021 passed in Civil Appeal No. 7110 of 2021, Commissioner of Income Tax (IT-4) V M/s. Reliance Telecom Limited, vide para 3.2 and 6 has held as under: “3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 11 | P a g e scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.” 21. In view of aforesaid discussion, the revenue has failed to point out any mistake apparent from the record that can be rectified u/s. 254(2) of the Act. The aforesaid miscellaneous applications are also devoid of merit and are accordingly dismissed. MA Nos. 06, 07, 08 & 09/Agr/2022 (in ITA Nos. 177, 183, 439 & 216/Agr/2014 (A.Yrs. 2009-10, 2009-10, 2010-11 & 2011-12): Printed from counselvise.com MA Nos. 04 & 05, 01, 02 & 03 and MA Nos.06 to 09/Agr/2022 12 | P a g e 22. In all these miscellaneous matters, the Assessing Officers, have passed the assessment order dated 09.08.2012 with respect to ITA Nos. 177 & 183/Agr/2014 and assessment orders dated 05.07.2013 and 27.03.2014 with respect to ITA Nos. 439 & 216/Agr/2014 respectively. The Assessing Officers in all these matters are located at Agra. In such fact situation, our findings noted herein above, shall mutatis mutandis apply in all these miscellaneous applications also. These miscellaneous applications are liable to be dismissed accordingly. 23. In the result, the miscellaneous applications Nos. 04, 05, 01, 02 & 03/Agr/2022 and miscellaneous applications No. 06, 07, 08 & 09/Agr/2022 are dismissed. Order pronounced in the open court on 06.10.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 06.10.2022 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra Printed from counselvise.com "