Question: A fellow Muslim asked me where Allaah is. I replied that He is above the heavens. He said: “What do you say about Allaah’s Saying: His Kursee extends over the heavens and the earth?” and he mentioned several other Aayaat (Qur’aanic Verses) to that effect. He added that if we say that Allaah is above the heavens, we would be determining a specific direction for Him. Respected Shaykh, what is your opinion in this regard? Are these questions among the ones we are forbidden to ask?
Answer: You have given the correct answer. When the Prophet (peace be upon him) was asked the same question, he (peace be upon him) said that Allaah (Glorified and Exalted be He) is above heaven and is exalted above His Creation. Allaah (Exalted and Glorified be He) says: Do you feel secure that He, Who is over the heaven (Allaah), will not cause the earth to sink with you, and then it should quake? Or do you feel secure that He, Who is over the heaven (Allaah), will not send against you a violent whirlwind? Then you shall know how (terrible) has been My Warning. And: The Most Gracious (Allaah) rose over (Istawaa’) the (Mighty) Throne (in a manner that suits His Majesty). And: Indeed, your Lord is Allâh, Who created the heavens and the earth in Six Days, and then He rose over (Istawaa’) the Throne (really in a manner that suits His Majesty).
Allaah (Glorified and Exalted be He) is high, over the `Arsh (Allaah’s Throne), and above all His Creation, according to all scholars of Ahl-ul-Sunnah (adherents to the Sunnah). Ahl-ul-Sunnah wal-Jamaa`ah (adherents to the Sunnah and the Muslim mainstream, may Allaah be merciful to them) unanimously agreed that Allaah is above the heavens, over the `Arsh, and exalted above all His Creation. This was reported from the Messenger of Allaah (peace be upon him), the Sahaabah (Companions of the Prophet), and those who follow them in righteousness, and is in accordance with what was revealed in the Noble Qur’aan.
When one of the Sahaabah wanted to set free his female slave, he brought her to the Prophet (peace be upon him). The Messenger of Allaah (peace be upon him) asked her: “Where is Allaah?” She said: “Above the heavens.” He asked: “Who am I?” She said: “The Messenger of Allaah.” So he said to her master: “Set her free, for she is a believer.” (Related by Muslim in his Saheeh) The Messenger (peace be upon him) approved the reply given by the slave girl, which is the same as yours… read more here.