Delhi High Court Pulls Up ITAT for Dismissing Transferred Appeals, Restores Over 200 Sahara Group Matters to Delhi Bench

In a strong rebuke to the Income Tax Appellate Tribunal (ITAT), the Delhi High Court has set aside a series of orders by the Delhi Bench of the Tribunal that dismissed long-pending appeals of the Sahara Group on the ground of lack of territorial jurisdiction, despite the cases having been formally transferred to Delhi nearly two decades ago by an administrative order of the ITAT President. In unusually sharp language, the Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed that the Tribunal’s conduct reflected an “overzealousness of disposing more cases”, rather than a justice-oriented approach. While the Delhi Bench may have reduced its pendency figures by dismissing these appeals, it had simultaneously increased the burden on the Lucknow Bench, forced both the Revenue and assessees to undertake the unnecessary exercise of filing fresh appeals, and potentially jeopardized substantive rights in matters pending for decades. The controversy traces back to appeals arising out of income tax assessments originally handled in Lucknow and Kolkata, where the Assessing Officers were situated. Following proceedings before the Commissioner of Income Tax (Appeals), the Revenue as well as the assessees filed appeals and cross-objections before the ITAT, Lucknow Bench. In 2006, exercising administrative powers under Rule 4 of the Income Tax (Appellate Tribunal) Rules, 1963, the President of the ITAT transferred as many as 218 Sahara Group appeals from the Lucknow Bench to the Delhi Bench for administrative convenience. These appeals remained pending in Delhi for nearly 20 years. However, in November 2024 and January 2025, the Delhi Bench of the ITAT dismissed several of these appeals and corresponding cross-objections, holding that it lacked territorial jurisdiction in view of the Supreme Court’s ruling in PCIT v. ABC Papers Ltd. (2022), which emphasized that jurisdiction is determined by the situs of the Assessing Officer. The High Court noted with concern that none of the parties before the ITAT had raised any objection to territorial jurisdiction. On the contrary, both sides had urged the Delhi Bench to decide the matters, given that the cases had been validly transferred by the ITAT President. Yet, instead of referring the matter back to the President for appropriate administrative directions or transferring the cases to the correct bench, the Delhi Bench outrightly dismissed the appeals, granting liberty to file fresh appeals before the Lucknow Bench. The High Court described this approach as “shocking”, observing that the Tribunal was fully aware that the appeals had been transferred to Delhi by an administrative order as early as 2006. A key legal issue examined by the Court was whether a judicial bench of the ITAT could effectively nullify an administrative transfer order passed by the President of the Tribunal. Answering this in the negative, the Court held that an administrative order of the ITAT President transferring cases cannot be undone by a judicial order of a bench of the Tribunal. Once a case stands transferred, only a competent court can examine the legality of such transfer—not a coordinate bench of the Tribunal. By dismissing the appeals, the Delhi Bench had effectively “sat in appeal” over the President’s administrative order, which was impermissible in law. The High Court also clarified that the Tribunal had misapplied the Supreme Court’s ruling in ABC Papers Ltd.. That judgment dealt with the question of which High Court has jurisdiction under Section 260A after a case is transferred under Section 127 of the Income Tax Act. In contrast, the present matter concerned the jurisdiction of the ITAT itself after an administrative transfer by its President. The Court held that the Supreme Court ruling did not apply to such a situation and could not be used to dismiss appeals pending before the Tribunal. The High Court set aside the impugned ITAT orders dismissing the appeals and cross-objections, restored all matters to their original numbers on the docket of the Delhi Bench of the ITAT, and directed that only the Delhi Bench shall hear and decide these appeals on merits. The Court further clarified that if any parallel appeals had been filed before the Lucknow Bench pursuant to the ITAT’s dismissal orders, such proceedings would remain deferred and ultimately be closed once the Delhi Bench decides the matters. Case Details Case Title: Sahara India Ltd Versus ITAT Case No.: W.P.(C) 6024/2025 Date: 22/01/2026 Counsel For Petitioner: Percy J. Pardiwala, Sr. Adv. Counsel For Respondent: Ruchir Bhatia, SSC Click Here To Read Order Read More: CBIC Issues Advisory on HSNS Cess Registration and Payment Procedure Ahead of February 2026 Rollout

Delhi High Court Pulls Up ITAT for Dismissing Transferred Appeals, Restores Over 200 Sahara Group Matters to Delhi Bench

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