Appeal against ITAT Bangalore order held maintainable only before High Court having jurisdiction over Assessing Officer's location; Apex Court's ruling in Principal Commissioner of Income-Tax v. ABC Papers Ltd. reaffirmed
In a significant ruling dated October 15, 2026, the Karnataka High Court (Division Bench comprising Justices S.G. Pandit and Dr. Chillakur Sumalatha) dismissed the appeal filed by the Principal Commissioner of Income Tax-7 against M/s. United Spirits Ltd., holding that the appeal was not maintainable before the Karnataka High Court due to lack of territorial jurisdiction. The appeal arose out of an order passed by the Income Tax Appellate Tribunal (ITAT), Bangalore, concerning the assessment year 2004-05.
The appellant, the Principal Commissioner of Income Tax, challenged the ITAT's order on two substantial questions of law related to the taxability of long-term capital gains from the sale of shares and the deduction claimed for professional fees paid by the assessee. However, the crucial issue before the High Court was whether it had jurisdiction to entertain the appeal under Section 260A of the Income Tax Act, 1961.
The facts revealed that the original assessment order was passed by the Assistant Commissioner of Income Tax, Circle-5, Kolkata. The appellant argued that since the ITAT order was passed by the Bangalore Bench and the respondent company's registered office was in Bangalore (post takeover), the Karnataka High Court should have jurisdiction.
Relying on the authoritative judgment of the Supreme Court in Principal Commissioner of Income-Tax v. ABC Papers Ltd. ([2022] 141 Taxmann.com 332), the High Court reiterated that the jurisdiction to hear appeals against ITAT orders lies exclusively with the High Court within whose territorial jurisdiction the Assessing Officer who passed the assessment order is situated. The court emphasized that the location of the ITAT or the registered office of the assessee post-takeover is irrelevant for deciding territorial jurisdiction.
The Court observed that the assessment order pertained to a time when the assessee company was located in Kolkata, and the registered office of the respondent company in Bangalore after takeover could not confer jurisdiction on the Karnataka High Court. The appeal was therefore dismissed as not maintainable, with liberty granted to the appellant to file the appeal before the appropriate High Court having jurisdiction over Kolkata.
This ruling reaffirms the settled legal position that the territorial jurisdiction for appeals under Section 260A of the Income Tax Act is strictly linked to the jurisdiction of the Assessing Officer who passed the assessment order and not the location of the ITAT or the assessee's registered office. It provides clarity and uniformity, preventing forum shopping based on the location of the ITAT benches.
Bottom Line:
Income Tax Act, 1961 - Section 260A - Jurisdiction of High Court in appeal against order of ITAT - Appeal lies only before High Court within whose territorial jurisdiction Assessing Officer who passed assessment order is situated - Jurisdiction is not determined by location of ITAT or by registered office of assessee after takeover.
Statutory provision(s): Income Tax Act, 1961 Section 260A
