ITAT Bench Can't Sit Over Its President's Order Transferring Cases: Delhi High Court Restores Sahara Appeals

The Delhi High Court has set aside a series of orders passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench, which had dismissed long-pending tax appeals of the Sahara Group on the ground of lack of territorial jurisdiction, despite the matters having been administratively transferred to Delhi nearly two decades ago.

A Division Bench of Justices Dinesh Mehta and Vinod Kumar held that once the President of the ITAT exercises his administrative powers to transfer appeals from one Bench to another, a judicial Bench of the Tribunal cannot sit in appeal over such an administrative order by dismissing the appeals.

“According to us, the impugned order passed by the Delhi Bench of the Tribunal amounts to sitting over an administrative order of the President of the Tribunal and setting an administrative order at naught. Such order is in the teeth of the administrative powers of the President of the Tribunal. Once a matter stands transferred from one Bench to another for whatever reasons, except for the High Court or the court competent considering legality of said order, no statutory authority including the Tribunal can upturn such order of the President of the Tribunal. A Bench of the Tribunal of whatever strength can by no stretch of imagination do the same. Because an administrative order of the President cannot be undone by judicial order of the Bench of the Tribunal,” it observed.

The Court was dealing with a batch of writ petitions filed by Sahara entities challenging ITAT orders dated November 20, 2024 and January 29, 2025, by which the Delhi Bench dismissed the appeals and connected cross-objections on the basis that it lacked territorial jurisdiction.

The High Court noted that more than 200 Sahara appeals were transferred from the Lucknow Bench to the Delhi Bench pursuant to administrative orders passed by the ITAT President in 2006 and subsequent years under the Income Tax (Appellate Tribunal) Rules, 1963.

Neither the assessees nor the Revenue had raised any objection to jurisdiction before the Tribunal.

Terming the ITAT's approach as “shocking”, the Court observed that the Tribunal was fully aware that the appeals stood transferred, yet dismissed them outright instead of placing the matters before the ITAT President for appropriate orders.

"This kind of practice showcases the Tribunal's overzealousness of disposing more cases.We are informed that these (13 appeals) are not the only appeals which the Delhi Bench of the Tribunal has dismissed; there are many more,” the High Court remarked.

Accordingly, the High Court set aside all the impugned ITAT orders and restored the appeals to the dockets of the Delhi Bench, directing that they be decided on merits by that bench alone.

For Petitioner: Senior Advocate Percy J. Pardiwala With Advocates Satyen Sethi, Arta Trana Panda, Sanjeeva Ku. Gupta And Naresh Kapila

For Respondent: Senior Standing Counsel Ruchir Bhatia With Junior Standing Counsels Anant Mann And Pratksh Gupta, And Advocate Lopamudra Mahapatra