The Delhi High Court has set aside multiple orders of the Income Tax Appellate Tribunal (ITAT), Delhi Bench, which had dismissed Sahara India’s income tax appeals on the ground of lack of territorial jurisdiction.
Holding that the Tribunal had erred in law, the Bench of Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta restored all the appeals to the Delhi Bench of the ITAT for adjudication on merits and directed that any connected proceedings pending before the Lucknow Bench be transferred to Delhi.
The writ petitions arose after the Delhi Bench of the ITAT rejected appeals filed by Sahara India as well as corresponding appeals filed by the Income Tax Department, holding that it lacked territorial jurisdiction to hear them. The impugned Tribunal orders were passed on 20 November 2024 and 30 May 2025 and related to assessment years 1995-96, 1996-97, 1997-98, and 1998-99. Although the original assessments had been completed in Lucknow, the appeals had earlier been transferred to the Delhi Bench pursuant to an administrative order issued by the President of the ITAT in 2006.
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Sahara India argued that the controversy had already been settled by a Coordinate Bench of the Delhi High Court in Sahara India Limited v. Income Tax Appellate Tribunal (2026). In that earlier case, the Court had quashed identical ITAT orders rejecting transferred appeals on territorial jurisdiction grounds and restored them to the Delhi Bench for decision on merits.
The department did not dispute that the present petitions were governed by the earlier judgment.
The High Court relied extensively on its earlier ruling, observing that the Tribunal’s decision to reject the appeals despite being fully aware that they had been transferred by the President of the ITAT was legally unsustainable.
The Court held that once the President of the Tribunal exercises administrative powers to transfer appeals from one Bench to another, a coordinate Bench of the Tribunal cannot effectively nullify that administrative decision through a judicial order. According to the Court, only a competent judicial forum could examine the legality of the President’s transfer order, not another Bench of the Tribunal itself.
The earlier judgment, quoted in the present order, also remarked that the Tribunal’s approach amounted to sitting in appeal over the President’s administrative powers and described the conduct as legally impermissible.
The ITAT had relied upon the Supreme Court’s judgment in ABC Papers Ltd. while declining jurisdiction. However, the Delhi High Court held that the reliance was misplaced.
The Court explained that the Supreme Court decision dealt with the question of which High Court would have appellate jurisdiction under Section 260A of the Income Tax Act after transfer of assessment proceedings under Section 127, and not with the validity of administrative transfer of appeals between different Benches of the ITAT.
Therefore, the precedent did not justify the Tribunal refusing to hear appeals that had already been validly transferred by the President of the Tribunal.
The Court further observed that even if the Delhi Bench genuinely believed it lacked territorial jurisdiction, it ought not to have dismissed the appeals outright.
Instead, the Bench should have placed the matter before the President of the ITAT for appropriate administrative directions regarding transfer. By directing parties to institute fresh appeals before the Lucknow Bench, the Tribunal unnecessarily increased litigation, burdened both taxpayers and the Revenue, and created avoidable duplication of proceedings.
Following its earlier precedent, the Delhi High Court allowed all five writ petitions, quashed the impugned ITAT orders, and restored the appeals to the files of the Delhi Bench for adjudication in accordance with law.
The Court also clarified that if, pursuant to the Tribunal’s earlier orders, either Sahara India or the Income Tax Department had filed fresh appeals or cross-objections before the Lucknow Bench, those proceedings would remain deferred and would be transferred to the Delhi Bench. The Delhi Bench alone would hear and decide the appeals on merits.
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