Bombay High Court
Capgemini Technology Services India … vs Deputy Commissioner Of Income Tax And … on 24 March, 2026
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2026:BHC-AS:15349-DB
1.wp.16068.2024.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.16068 OF 2024
Capegemini Technology Services India Ltd .. Petitioner
Versus
Deputy Commissioner of Income Tax,
Circle- 1(1), Pune & Ors. .. Respondents
Mr.Dharan V. Gandhi a/w Aanchal Vyas, Advocates for the
UTKARSH
KAKASAHEB Petitioner.
BHALERAO
Digitally signed by
UTKARSH KAKASAHEB Mr.Arjun Gupta (through V.C.), Advocate for Respondent
BHALERAO
Date: 2026.04.01
14:11:26 +0530
Nos.1 and 3.
CORAM : B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
DATE : MARCH 24, 2026
ORAL JUDGMENT:- (PER B. P. COLABAWALLA, J.)
1. Rule. Respondents waive service. With the consent of
parties, Rule made returnable forthwith and heard finally.
2. By this Petition under Article 226 of the Constitution of
India, the Petitioner challenges the alleged outstanding demands of
Rs.3,28,785/- for A.Y.2001-02, Rs.1,24,577/- for A.Y.2002-03 and
Rs.28,87,714/- for A.Y.2003-04 and the recovery notice dated
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05.02.2023 issued under Section 220 of the Income Tax Act, 1961 (“the
IT Act“).
3. Brief facts of the case are as follows:-
(a) Vide an order dated 16.05.2007, passed by the Delhi High
Court in Company Petition No.49-51 of 2007, Flextronics
Software Systems Limited (“erstwhile entity”) got
amalgamated with Kappa Investment Limited. The name of
the said company was subsequently changed to Aricent
Technologies (Holdings) Limited. Thereafter, M/s.Aricent
Technologies (Holdings) Limited got amalgamated with the
Petitioner vide order dated 23.12.2022 of the National
Company Law Tribunal, Mumbai Bench in CP
(CAA)/183/MB/2022 and CA (CAA) /56/MB/2022.
(b) In February 2023, the Petitioner received a notice under
Section 220 of the Act [dated 05.02.2023] from Respondent
No.2. In the said notice, the Petitioner was asked to pay the
outstanding demand, inter alia, of Rs.3,28,785/- for A.Y.2001-
02, Rs.1,24,577/- for A.Y.2002-03 and Rs.28,87,714/- for
A.Y.2003-04. The said notice was in the name of the erstwhile
entity, namely, Flextronics Software Systems Limited.
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(c) The Petitioner contends that it was not aware of any such
outstanding demands. Upon receipt of the recovery notice, the
Petitioner filed applications under the Right to Information
Act, 2005 (“the RTI Act“) seeking copies of the orders giving
rise to such demands.
(d) The Petitioner received a reply from Respondent No.2 stating
that for A.Y.2001-02 and 2002-03, the demands were on
account of rectification/intimation orders, but no such orders
were provided. Instead, illegible screenshots of the
computation sheets from the system were furnished. For
A.Y.2003-04, it was stated that records were not available.
(e) The Petitioner preferred appeals before the First Appellate
Authority under the RTI Act, wherein directions were issued to
Respondent No.2 to furnish full information. Despite such
directions, no orders were supplied.
(f) In these circumstances, the Petitioner contends that these
demands are non-existent and the recovery notice is bad in
law.
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4. This matter came for hearing first on 24.02.2025. On the
said date, this Court passed an order noting the objection of the
Respondents regarding territorial jurisdiction. It recorded that the
Petitioner had produced an order of transfer of jurisdiction dated
13.12.2023 from Respondent No.2 to Respondent No.1 i.e., ACIT/DCIT
Circle-1(1), Pune. Accordingly, this Court directed Respondent Nos.1
and 2 to file affidavits by 13.03.2025 not only on the aspect of merits,
but also on the issue of jurisdiction, and also appraise the Court on the
status of the transfer of records. On 24.02.2025, this Court also issued
notice to Respondent Nos. 2 and 4.
5. The Petitioner has effected service on the Delhi officer
(Respondent No.2) and an affidavit of service to that effect has been
placed on record. Despite service and the specific directions of this
Court, Respondent No.2 has chosen not to file any reply or enter an
appearance.
6. At the outset, Mr. Arjun Gupta, the learned counsel
appearing for Respondent Nos.1 to 3, raised a preliminary objection
regarding the territorial jurisdiction of this Court to entertain the
present Petition. He vehemently argued that the demands in question
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pertain to the erstwhile entity which was assessed in Delhi. The
impugned orders/intimations giving rise to the demand were passed by
the Assessing Officer in Delhi. He submitted that the Pune Officer i.e.
Respondent No.1, has not performed any act in relation to the creation
of these demands. He relied upon the prayer clause 12(a) in the Petition
which seeks quashing and setting aside of the demand recovery notice
and the computation sheets all issued by Respondent No.2 who is in
Delhi. Since, the prayer is to quash and set aside the actions performed
and notices issued by Respondent No.2, therefore, it is argued that the
Petitioner should be relegated to the Delhi High Court. Mr. Gupta relied
upon a compilation of judgments to buttress his submission. He placed
reliance on the decision of the Supreme Court in Principal
Commissioner of Income Tax-I V/S ABC Papers Limited
[(2022) 9 SCC 1] to contend that an appeal under the Act is to be filed
before the Tribunal/ Court within whose jurisdiction the Assessing
Officer, who passed the order appealed against, is located. He argued
that in the said judgment, even where the case of an assessee was
subsequently transferred under Section 127 of the IT Act, still the
Hon’ble Apex Court held that an appeal has to be filed before the
Tribunal/ Court within whose jurisdiction the Assessing Officer, who
passed the original order appealed against, is located. He, accordingly,
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submitted that in the present case, since the recovery and demand
notices have been allegedly issued and raised by an Officer in Delhi,
even the Writ Petition should be filed in Delhi High Court. He also
heavily relied on the Constitution Bench decision in Lt. Col. Khajoor
Singh V/S Union of India [AIR 1961 SC 532] to argue that a writ
must be filed where the Respondent is located. He submitted that this
was a Seven Judge Constitution Bench judgment which had
categorically held that it is the place of the Authority/Respondent which
will decide the territorial jurisdiction of a Court to entertain a Writ
Petition under Article 226 of the Constitution of India. He, further,
relied on a decision of this Court dated 15.04.2025, in Trustcap
Private Limited V/S ITO (Writ Petition No. 742 of 2025)
wherein this Court relegated the Petitioner to the Calcutta High Court,
as the notice under challenge was issued by an Officer in Kolkata. He
submitted that even if the effect of the reliefs prayed for is to be felt
where the Petitioner is located, the same is not sufficient to confer
jurisdiction on this Court. Reliance was also placed on the decision of
the Delhi High Court in Jayaswals Neco Ltd. V/S Union of India
[(2007) SCC OnLine Del 2094]. He submitted that Article 226(2) of
the Constitution of India, should be considered to be in addition to
Article 226(1) and not as an alternative. Consequently, it is only the
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Court exercising jurisdiction over the Delhi Officer which has the
jurisdiction to entertain the present Petition. Since, the original
authority issuing notices and raising demands is in Delhi, the Petitioner
ought to be directed to approach the Delhi High Court and the present
Petition should be dismissed.
7. Per contra, Mr. Dharan Gandhi, the learned counsel for the
Petitioner, submitted that the objection to jurisdiction is untenable. He
pointed out that the jurisdiction over the Petitioner‘s case was
transferred from Delhi to Pune vide an order under Section 127 of the
Act passed by the PCIT, Delhi-1 on 13.12.2023. This is not disputed by
Respondent No.1 as well. Consequently, the Delhi Officer i.e.,
Respondent No.2 is now functus officio. He submitted that any relief,
including the deletion of demand or stay on recovery proceeding, can
now only be granted by Respondent No.1. He emphasized that the
erstwhile company has amalgamated with the Petitioner, which has its
registered office in Pune. It is the Petitioner in Pune who has to defend
the proceedings, bear the consequences, and face the effects of the
recovery notices. Since, the effect of the impugned action is felt within
the territorial jurisdiction of this Court, a part of the cause of action has
arisen here, thereby conferring jurisdiction on this Court to exercise its
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power under Article 226 of the Constitution. Mr. Gandhi relied on a
series of decisions including Kusum Ingots & Alloys Ltd. V/S
Union of India [(2004) 6 SCC 254], Om Prakash Srivastava
V/S Union of India [(2006) 6 SCC 207], Navinchandra N.
Majithia V/S State of Maharashtra [(2000) 7 SCC 640],
Nawal Kishore Sharma V/S Union of India [(2014) 9 SCC
329], Teleperformance Global Services Pvt. Ltd. V/S ACIT
[(2021) 435 ITR 725 (Bom)], Uber India Systems Pvt. Ltd. V/S
ACIT [(2024) 168 taxmann.com 200 (Bom)], Vincent
Commercial Company Limited V/S ITO [Writ Petition (L) No.
10838 of 2025], Wills India Insurance Brokers (P.) Ltd. V/S
IRDA [(2012) 22 taxmann.com 154 (Bom)] and Damomal
Kauromal Raisingani V/S Union of India [AIR 1967 Bom
355], to support his contention.
8. Mr. Gandhi then argued that the decision in Lt. Col.
Khajoor Singh (supra) is not applicable on the ground that it was
rendered prior to the amendment of Article 226 in 1963. He submitted
that Lt. Col. Khajoor Singh (supra) dealt with the issue whether cause of
action can be considered as a valid criteria under Article 226 to
entertain a Writ Petition. The said question was answered in negative by
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the Hon’ble Supreme Court in absence of any such criteria in Article 226
at that point of time. He relied upon Article 226(2) which was
introduced after the decision in case of Lt. Col. Khajoor Singh (supra) to
contend that a High Court can entertain a Writ Petition, where a cause
of action arises, whether in part or whole. He submitted that the
legislature amended the Constitution of India, to introduce the concept
of cause of action to be considered as one of the factors to confer
territorial jurisdiction over a High Court to entertain a Writ Petition. He
also distinguished the decision in Trustcap Private Limited (supra) on
the ground that it relied on Khajoor Singh (supra) without appreciating
the subsequent jurisprudence on Article 226(2). He, therefore,
submitted that this Court had the jurisdiction to entertain the present
Petition.
9. We have considered the rival submissions on the issue of
territorial jurisdiction. The issue regarding the jurisdiction of the High
Court to issue writs against authorities located outside its territories has
evolved significantly. Since, a vociferous objection was raised by Mr.
Gupta in this regard, it will be only apt to deal with the same in some
detail.
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10. Article 226(1) of the Constitution as it stood prior to its
amendment by Constitution (Fifteenth Amendment) Act, 1963 read
thus:-
“(1) Notwithstanding anything in article 32 every High Court shall
have powers, throughout the territories in relation to which it
exercise jurisdiction, to issue to any person or authority,
including in appropriate cases, any Government, within those
territories directions, orders or writs, including writs in the
nature of habeas corpus, mandamus, prohibition, quo
warrantor and certiorari, or any of them, for the enforcement of
any of the rights conferred by Part III and for any other
purpose.”
11. Initially, in Election Commission, India V/S Saka
Venkata Rao [AIR 1953 SC 210] and K.S. Rashid and Son V/S
Income Tax Investigation Commission [AIR 1954 SC 207], the
Hon’ble Supreme Court held that the High Court’s jurisdiction was
based on the location of the Authority/Respondent. This was on the
basis of the interpretation of Article 226 as it then stood.
12. This view was affirmed by a Seven-Judge Constitution
Bench in Lt. Col. Khajoor Singh V/S Union of India [AIR 1961
SC 532], wherein it was held that the concept of cause of action could
not be introduced in Article 226 [as it then stood]. The Court held that
jurisdiction depended on the person or authority passing the order
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being within the territories of the High Court. It would be relevant to
first refer to the issues raised and considered by the Constitution Bench
as brought out in Paragraph 11 which is reproduced hereunder:-
“11. The two main questions which arise, therefore, are : (i)
whether the Government of India as such can be said to have
a location in a particular place viz. New Delhi, irrespective of
the fact that its authority extends over all the States and its
officers function throughout India, and (ii) whether there is
any scope for introducing the concept of cause of action as
the basis of exercise of jurisdiction under Article 226. Before,
however, we deal with these two main questions, we would
like to clear the ground with respect to two subsidiary matters
which have been urged on behalf of the appellant.”
(emphasis supplied)
13. This was answered by the Court in Paragraph 16 which is
reproduced hereunder:-
“16. Article 226 as it stands does not refer anywhere to the
accrual of cause of action and to the jurisdiction of the High
Court depending on the place where the cause of action
accrues being within its territorial jurisdiction. Proceedings
under Article 226 are not suits; they provide for extraordinary
remedies by a special procedure and give powers of
correction to the High Court over persons and authorities and
these special powers have to be exercised within the limits set
for them. These two limitations have already been indicated
by us above and one of them is that the person or authority
concerned must be within the territories over which the High
Court exercises jurisdiction. Is it possible then to overlook this
constitutional limitation and say that the High Court can issue
a writ against a person or authority even though it may not be
within its territories simply because the cause of action has
arisen within those territories? It seems to us that it would be
going in the face of the express provision in Article 226 and
doing away with an express limitation contained therein if the
concept of cause of action were to be introduced in it. Nor do
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we think that it is right to say that because Article 300
specifically provides for suits by and against the Government
of India, the proceedings under Article 226 are also covered
by Article 300. It seems to us that Article 300 which is on the
same line as Section 176 of the Government of India Act,
1935, dealt with suits as such and proceedings analogous to
or consequent upon suits and has no reference to the
extraordinary remedies provided by Article 226 of the
Constitution. The concept of cause of action cannot in our
opinion be introduced in Article 226, for by doing so we shall
be doing away with the express provision contained therein
which requires that the person or authority to whom the writ
is to be issued should be resident in or located within the
territories over which the High Court has jurisdiction. It is
true that this may result in some inconvenience to persons
residing far away from New Delhi who are aggrieved by some
order of the Government of India as such, and that may be a
reason for making a suitable constitutional amendment in
Article 226. But the argument of inconvenience, in our
opinion, cannot affect the plain language of Article 226, nor
can the concept of the place of cause of action be introduced
into it for that would do away with the two limitations on the
powers of the High Court contained in it.”
(emphasis supplied)
14. In fact, in paragraph 17, the Court went on to hold as
under:-
“17. We have given our earnest consideration to the language of
Article 226 and the two decisions of this Court referred to
above. We are of opinion that unless there are clear and
compelling reasons, which cannot be denied, we should not
depart from the interpretation given in these two cases and
indeed from any interpretation given in an earlier judgment
of this Court, unless there is a fair amount of unanimity that
the earlier decisions are manifestly wrong. This Court should
not, except when it is demonstrated beyond all reasonable
doubt that its previous ruling, given after due deliberation
and full hearing, was erroneous, go back upon its previous
ruling, particularly on a constitutional issue. In this case our
reconsideration of the matter has confirmed the view that
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there is no place for the introduction of the concept of the
place where the impugned order has effect or of the concept
of functioning of a Government, apart from the location of its
office concerned with the case, or even of the concept of the
place where the cause of action arises in Article 226 and that
the language of that Article is plain enough to lead to the
conclusion at which the two cases of this Court referred to
above arrived. If any inconvenience is felt on account of this
interpretation of Article 226 the remedy seems to be a
constitutional amendment. There is no scope for avoiding the
inconvenience by an interpretation which we cannot
reasonably, on the language of the Article, adopt and which
the language of the Article does not bear.”
(emphasis supplied)
15. Thus, the Court had specifically ruled out the concept of the
place where the impugned order has effect or of the concept of
functioning of a Government or the concept of cause of action as being
relevant to exercise jurisdiction under Article 226 of the Constitution of
India. On the contrary, the Court held that if any inconvenience is felt
on account of this interpretation of Article 226, the remedy seems to be
a constitutional amendment.
16. In this context, it now, becomes imperative to refer to
subsequent developments. The legal position underwent a sea change
with the Constitution (Fifteenth Amendment) Act, 1963, which inserted
Clause (1-A) [renumbered as Clause (2) by Constitution (Forty-second
Amendment) Act, 1976] to Article 226. This amendment specifically
conferred jurisdiction on High Courts within whose territories the cause
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of action, wholly or in part, arises, notwithstanding that the seat of the
Government or authority is not within those territories. The same reads
thus:-
“226. Power of High Courts to issue certain writs. – (1)
Notwithstanding anything in article 32, every High Court shall have
power, throughout the territories in relation to which it exercises
jurisdiction, to issue to any person or authority, including in
appropriate cases, any Government, within those territories
directions, orders or writs, including [writs in the nature of habeas
corpus, mandamus, prohibition, quo warranto and certiorari, or
any of them, for the enforcement of any of the rights conferred by
Part III and for any other purpose.
(2) The power conferred by clause (1) to issue directions, orders or
writs to any Government, authority or person may also be exercised
by any High Court exercising jurisdiction in relation to the
territories within which the cause of action, wholly or in part, arises
for the exercise of such power, notwithstanding that the seat of such
Government or authority or the residence of such person is not
within those territories.
(3) Where any party against whom an interim order, whether by
way of injunction or stay or in any other manner, is made on, or in
any proceedings relating to, a petition under clause (1), without –
(a) furnishing to such party copies of such petition and all
documents in support of the plea for such interim order; and
(b) giving such party an opportunity of being heard,
makes an application to the High Court for the vacation of such
order and furnishes a copy of such application to the party in whose
favour such order has been made or the counsel of such party, the
High Court shall dispose of the application within a period of two
weeks from the date on which it is received or from the date on
which the copy of such application is so furnished, whichever is
later, or where the High Court is closed on the last day of that
period, before the expiry of the next day afterwards on which the
High Court is open; and if the application is not so disposed of, the
interim order shall, on the expiry of that period, or, as the case may
be, the expiry of the said next day, stand vacated.
(4) The power conferred on a High Court by this article shall not be
in derogation of the power conferred on the Supreme Court by
clause (2) of article 32.”
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17. Thus, it is apparent that the concept of cause of action
which was not accepted by the Supreme Court in case of Lt. Col.
Khajoor Singh (supra) due to absence of any such specific provision,
was specifically brought into the Constitution of India by the
Constitution (Fifteenth Amendment) Act, 1963. Now, after the insertion
of Article 226(2), every High Court exercising jurisdiction in relation to
the territories within which the cause of action, wholly or in part, arises,
shall have powers to issue directions, orders or writs to any
Government, authority or person notwithstanding that the seat of such
Government or authority or the residence of such person is not within
those territories. Thus, even if the authority concerned is not within the
territorial jurisdiction of a High Court, still the High Court will have to
power to issue writ to such authority, provided the cause of action,
wholly or in part, arises within the jurisdiction of such High Court.
18. Article 226(2) of the Act, came up for consideration before
the Hon’ble Supreme Court in number of cases. In Navinchandra N.
Majithia V/S State of Maharashtra [(2000) 7 SCC 640], the
Supreme Court held that the High Court before which the Writ Petition
is filed must ascertain whether any part of the cause of action has arisen
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within the territorial limits of its jurisdiction. The relevant paragraphs
in the said decisions are as under:-
“17. From the provision in clause (2) of Article 226 it is clear that
the maintainability or otherwise of the writ petition in the High
Court depends on whether the cause of action for filing the
same arose, wholly or in part, within the territorial jurisdiction
of that Court.
…
27. Tested in the light of the principles laid down in the cases noted
above the judgment of the High Court under challenge is
unsustainable. The High Court failed to consider all the
relevant facts necessary to arrive at a proper decision on the
question of maintainability of the writ petition, on the ground of
lack of territorial jurisdiction. The Court based its decision on
the sole consideration that the complainant had filed the
complaint at Shillong in the State of Meghalaya and the
petitioner had prayed for quashing the said complaint. The
High Court did not also consider the alternative prayer made in
the writ petition that a writ of mandamus be issued to the State
of Meghalaya to transfer the investigation to Mumbai Police.
The High Court also did not take note of the averments in the
writ petition that filing of the complaint at Shillong was a mala
fide move on the part of the complainant to harass and
pressurise the petitioners to reverse the transaction for transfer
of shares. The relief sought in the writ petition may be one of
the relevant criteria for consideration of the question but cannot
be the sole consideration in the matter. On the averments made
in the writ petition gist of which has been noted earlier it cannot
be said that no part of the cause of action for filing the writ
petition arose within the territorial jurisdiction of the Bombay
High Court.
…
35. But a Constitution Bench of this Court has held in Election
Commission, India v. Saka Venkata Subba Rao [(1953) 1 SCC
320 : AIR 1953 SC 210 : 1953 SCR 1144] thus:
“[T]he power of the High Court to issue writs under
Article 226 of the Constitution is subject to the two-fold
limitation that such writs cannot run beyond the territories
subject to its jurisdiction and the person or authority to
whom the High Court is empowered to issue such writs
must be amenable to the jurisdiction of the High Court
either by residence or location within the territories
subject to its jurisdiction.”
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36. It was the said decision of the Constitution Bench which
necessitated Parliament to bring the Fifteenth Amendment to
the Constitution by which clause (1-A) was added to Article
226. That clause was subsequently renumbered as clause (2) by
the Constitution Forty-Second Amendment. Now clause (2) of
Article 226 reads thus:
“226. (2) The power conferred by clause (1) to issue
directions, orders or writs to any Government,
authority or person may also be exercised by any
High Court exercising jurisdiction in relation to the
territories within which the cause of action, wholly
or in part, arises for the exercise of such power,
notwithstanding that the seat of such Government or
authority or the residence of such person is not
within those territories.”
37. The object of the amendment by inserting clause (2) in the
article was to supersede the decision of the Supreme Court in
Election Commission v. Saka Venkata Subba Rao [(1953) 1
SCC 320 : AIR 1953 SC 210 : 1953 SCR 1144] and to restore
the view held by the High Courts in the decisions cited above.
Thus the power conferred on the High Courts under Article 226
could as well be exercised by any High Court exercising
jurisdiction in relation to the territories within which “the cause
of action, wholly or in part, arises” and it is no matter that the
seat of the authority concerned is outside the territorial limits of
the jurisdiction of that High Court. The amendment is thus
aimed at widening the width of the area for reaching the writs
issued by different High Courts.”
(emphasis supplied)
19. Thus, it can be deduced that the amendment was aimed at
widening the scope of territorial jurisdiction for writs to be issued by
different High Courts.
20. This issue of territorial jurisdiction was also the subject
matter of consideration in Kusum Ingots & Alloys Ltd. V/S Union
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of India [(2004) 6 SCC 254], wherein the Supreme Court explicitly
clarified the position post the amendment. The Court held that if even if
a small fraction of the cause of action accrues within the jurisdiction of
the Court, the Court will have jurisdiction in the matter. The relevant
paragraphs of this decision are brought out hereunder:-
“7. Clause (2) of Article 226 of the Constitution of India reads
thus:
“226. (2) The power conferred by clause (1) to issue
directions, orders or writs to any Government,
authority or person may also be exercised by any High
Court exercising jurisdiction in relation to the
territories within which the cause of action, wholly or
in part, arises for the exercise of such power,
notwithstanding that the seat of such Government or
authority or the residence of such person is not within
those territories.”
8. Section 20(c) of the Code of Civil Procedure reads as
under:
“20. Other suits to be instituted where defendants
reside or cause of action arises.–Subject to the
limitations aforesaid, every suit shall be instituted in a
court within the local limits of whose jurisdiction–
(a)-(b)***
(c) the cause of action, wholly or in part, arises.”
9. Although in view of Section 141 of the Code of Civil
Procedure the provisions thereof would not apply to writ
proceedings, the phraseology used in Section 20(c) of the
Code of Civil Procedure and clause (2) of Article 226, being
in pari materia, the decisions of this Court rendered on
interpretation of Section 20(c) CPC shall apply to the writ
proceedings also. Before proceeding to discuss the matter
further it may be pointed out that the entire bundle of facts
pleaded need not constitute a cause of action as what is
necessary to be proved before the petitioner can obtain a
decree is the material facts. The expression material facts is
also known as integral facts.
10. Keeping in view the expressions used in clause (2) of
Article 226 of the Constitution of India, indisputably even if a
small fraction of cause of action accrues within the
jurisdiction of the Court, the Court will have jurisdiction in
the matter.
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…
27. When an order, however, is passed by a court or tribunal
or an executive authority whether under provisions of a
statute or otherwise, a part of cause of action arises at that
place. Even in a given case, when the original authority is
constituted at one place and the appellate authority is
constituted at another, a writ petition would be maintainable
at both the places. In other words, as order of the appellate
authority constitutes a part of cause of action, a writ petition
would be maintainable in the High Court within whose
jurisdiction it is situate having regard to the fact that the
order of the appellate authority is also required to be set aside
and as the order of the original authority merges with that of
the appellate authority.”
(emphasis supplied)
21. Further, in Kusum Ingots (supra), in the context of Article
226(2), the Court held that the decision in case of Lt. Col. Khajoor Singh
(supra) has no application. The relevant paragraphs in this regard are as
under:-
“28. Lt. Col. Khajoor Singh v. Union of India [AIR 1961 SC
532 : (1961) 2 SCR 828] whereupon the learned counsel
appearing on behalf of the appellant placed strong reliance
was rendered at a point of time when clause (2) of Article
226 had not been inserted. In that case the Court held that
the jurisdiction of the High Court under Article 226 of the
Constitution of India, properly construed, depends not on
the residence or location of the person affected by the order
but of the person or authority passing the order and the
place where the order has effect. In the latter sense, namely,
the office of the authority which is to implement the order
would attract the territorial jurisdiction of the Court was
considered having regard to Section 20(c) of the Code of
Civil Procedure as Article 226 of the Constitution thence
stood, stating: (AIR p. 540, para 16)
“The concept of cause of action cannot in our
opinion be introduced in Article 226, for by doing so
we shall be doing away with the express provision
contained therein which requires that the person orPage 19 of 43
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authority to whom the writ is to be issued should be
resident in or located within the territories over
which the High Court has jurisdiction. It is true that
this may result in some inconvenience to persons
residing far away from New Delhi who are
aggrieved by some order of the Government of India
as such, and that may be a reason for making a
suitable constitutional amendment in Article 226.
But the argument of inconvenience, in our opinion,
cannot affect the plain language of Article 226, nor
can the concept of the place of cause of action be
introduced into it for that would do away with the
two limitations on the powers of the High Court
contained in it.”
29. In view of clause (2) of Article 226 of the Constitution of
India, now if a part of cause of action arises outside the
jurisdiction of the High Court, it would have jurisdiction to
issue a writ. The decision in Khajoor Singh [AIR 1961 SC
532 : (1961) 2 SCR 828] has, thus, no application.”
(emphasis supplied)
22. It may be relevant to also specify that a note of caution was
sounded by the Supreme Court in paragraph 30 with respect of Forum
conveniens as under:-
“Forum conveniens
30. We must, however, remind ourselves that even if a small
part of cause of action arises within the territorial
jurisdiction of the High Court, the same by itself may not
be considered to be a determinative factor compelling the
High Court to decide the matter on merit. In appropriate
cases, the Court may refuse to exercise its discretionary
jurisdiction by invoking the doctrine of forum conveniens.
[See Bhagat Singh Bugga v. Dewan Jagbir Sawhney [AIR
1941 Cal 670 : ILR (1941) 1 Cal 490] , Madanlal Jalan v.
Madanlal [(1945) 49 CWN 357 : AIR 1949 Cal 495] ,
Bharat Coking Coal Ltd. v. Jharia Talkies & Cold Storage
(P) Ltd. [1997 CWN 122] , S.S. Jain & Co. v. Union of
India [(1994) 1 CHN 445] and New Horizons Ltd. v.
Union of India [AIR 1994 Del 126] .]”
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23. However, in the present case, there is no quarrel that this
doctrine of Forum conveniens has no application.
24. The next decision of the Supreme Court is in case of Om
Prakash Srivastava V/S Union of India [(2006) 6 SCC 207].
The relevant paragraphs in this decision are quoted below:-
“7. The question whether or not cause of action wholly or in part
for filing a writ petition has arisen within the territorial
limits of any High Court has to be decided in the light of the
nature and character of the proceedings under Article 226 of
the Constitution. In order to maintain a writ petition, a writ
petitioner has to establish that a legal right claimed by him
has prima facie either been infringed or is threatened to be
infringed by the respondent within the territorial limits of the
Court’s jurisdiction and such infringement may take place by
causing him actual injury or threat thereof.
8. Two clauses of Article 226 of the Constitution on plain
reading give clear indication that the High Court can
exercise power to issue direction, order or writs for the
enforcement of any of the fundamental rights conferred by
Part III of the Constitution or for any other purpose if the
cause of action wholly or in part had arisen within the
territories in relation to which it exercises jurisdiction
notwithstanding that the seat of the Government or authority
or the residence of the person against whom the direction,
order or writ is issued is not within the said territories. (See
ONGC v. Utpal Kumar Basu [(1994) 4 SCC 711].)
9. By “cause of action” it is meant every fact, which, if
traversed, it would be necessary for the plaintiff to prove in
order to support his right to a judgment of the Court. In
other words, a bundle of facts, which it is necessary for the
plaintiff to prove in order to succeed in the suit. (See Bloom
Dekor Ltd. v. Subhash Himatlal Desai [(1994) 6 SCC 322]
.)”
(emphasis supplied)
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25. The Supreme Court in Om Prakash Srivastava (supra)
held that “cause of action” has to be construed as bundle of facts and
that even a threat of infringement of a right by any person within the
territorial jurisdiction of the Court would be a relevant justification to
entertain a petition under Article 226. Mr. Gandhi, has rightly argued,
that future recovery notices would be issued by Respondent No.1 and he
is the Officer who would initiate recovery proceedings. Since,
Respondent No.1 is an authority within the jurisdiction of this Court
therefore, the cause of action, atleast in part, has arisen so as to confer
this Court with the jurisdiction to entertain the present Petition.
26. In Nawal Kishore Sharma V/S Union of India
[(2014) 9 SCC 329], the Supreme Court again dealt with the issue of
territorial jurisdiction of a High Court. Firstly, it dealt with the
provisions of Article 226(2) and the decisions of the Supreme Court
prior to insertion of the said provision. The relevant paragraphs of the
decisions are as under:-
“8. While interpreting the aforesaid provision, the Constitution
Bench of this Court in Election Commission v. Saka Venkata
Rao [(1953) 1 SCC 320 : AIR 1953 SC 210] , held that the writ
court would not run beyond the territories subject to its
jurisdiction and that the person or the authority affected by the
writ must be amenable to court’s jurisdiction either by residence
or location within those territories. The rule that cause of actionPage 22 of 43
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attracts jurisdiction in suits is based on statutory enactment and
cannot apply to writs issued under Article 226 of the
Constitution which makes no reference to any cause of action or
where it arises but insist on the presence of the person or
authority within the territories in relation to which the High
Court exercises jurisdiction. In another Constitution Bench
judgment of this Court in K.S. Rashid and Son v. Income Tax
Investigation Commission [AIR 1954 SC 207] , this Court took
the similar view and held that the writ court cannot exercise its
power under Article 226 beyond its territorial jurisdiction. The
Court was of the view that the exercise of power conferred by
Article 226 was subject to a twofold limitation viz. firstly, the
power is to be exercised in relation to which it exercises
jurisdiction and secondly, the person or authority on whom the
High Court is empowered to issue writ must be within those
territories. These two Constitution Bench judgments came for
consideration before a larger Bench of seven Judges of this
Court in Lt. Col. Khajoor Singh v. Union of India [Lt. Col.
Khajoor Singh v. Union of India, AIR 1961 SC 532]. The Bench
approved the aforementioned two Constitution Bench judgments
and opined that unless there are clear and compelling reasons,
which cannot be denied, writ court cannot exercise jurisdiction
under Article 226 of the Constitution beyond its territorial
jurisdiction.
9. The interpretation given by this Court in the aforesaid decisions
resulted in undue hardship and inconvenience to the citizens to
invoke writ jurisdiction. As a result, clause (1-A) was inserted in
Article 226 by the Constitution (Fifteenth) Amendment Act, 1963
and subsequently renumbered as clause (2) by the Constitution
(Forty-second) Amendment Act, 1976. The amended clause (2)
now reads as under:
“226.Power of High Courts to issue certain writs.–
(1) Notwithstanding anything in Article 32, every High Court
shall have power, throughout the territories in relation to
which it exercises jurisdiction, to issue to any person or
authority, including in appropriate cases any Government,
within those territories, directions, orders or writs,
including writs in the nature of habeas corpus, mandamus,
prohibition, quo warranto and certiorari, or any of them, for
the enforcement of any of the rights conferred by Part III
and for any other purpose.
(2) The power conferred by clause (1) to issue directions,
orders or writs to any Government, authority or person may
also be exercised by any High Court exercising jurisdiction
in relation to the territories within which the cause of action,
wholly or in part, arises for the exercise of such power,
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notwithstanding that the seat of such Government or
authority or the residence of such person is not within those
territories.
(3)-(4)***”
On a plain reading of the amended provisions in clause (2), it is
clear that now the High Court can issue a writ when the person
or the authority against whom the writ is issued is located
outside its territorial jurisdiction, if the cause of action wholly or
partially arises within the court’s territorial jurisdiction. Cause
of action for the purpose of Article 226(2) of the Constitution,
for all intent and purpose must be assigned the same meaning as
envisaged under Section 20(c) of the Code of Civil Procedure.
The expression cause of action has not been defined either in the
Code of Civil Procedure or the Constitution. Cause of action is
bundle of facts which is necessary for the plaintiff to prove in the
suit before he can succeed. The term “cause of action” as
appearing in clause (2) came up for consideration time and
again before this Court.”
(emphasis supplied)
27. Further, in case of Nawal Kishore Sharma (supra),
the Court also held that even if the order rejecting the claim was passed
by an authority outside the state, if the same was communicated to the
Petitioner in his home state, a part of the cause of action arose in that
state, where he received the communication. The relevant paragraphs in
this regard are as under:-
“16. Regard being had to the discussion made hereinabove, there
cannot be any doubt that the question whether or not cause of
action wholly or in part for filing a writ petition has arisen
within the territorial limit of any High Court has to be decided
in the light of the nature and character of the proceedings
under Article 226 of the Constitution. In order to maintain a
writ petition, the petitioner has to establish that a legal right
claimed by him has been infringed by the respondents within
the territorial limit of the Court’s jurisdiction.
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17. We have perused the facts pleaded in the writ petition and the
documents relied upon by the appellant. Indisputably, the
appellant reported sickness on account of various ailments
including difficulty in breathing. He was referred to hospital.
Consequently, he was signed off for further medical treatment.
Finally, the respondent permanently declared the appellant
unfit for sea service due to dilated cardiomyopathy (heart
muscle disease). As a result, the Shipping Department of the
Government of India issued an Order on 12-4-2011 cancelling
the registration of the appellant as a seaman. A copy of the
letter was sent to the appellant at his native place in Bihar
where he was staying after he was found medically unfit. It
further appears that the appellant sent a representation from
his home in the State of Bihar to the respondent claiming
disability compensation. The said representation was replied
by the respondent, which was addressed to him on his home
address in Gaya, Bihar rejecting his claim for disability
compensation. It is further evident that when the appellant
was signed off and declared medically unfit, he returned back
to his home in the district of Gaya, Bihar and, thereafter, he
made all claims and filed representation from his home
address at Gaya and those letters and representations were
entertained by the respondents and replied and a decision on
those representations were communicated to him on his home
address in Bihar. Admittedly, the appellant was suffering from
serious heart muscle disease (dilated cardiomyopathy) and
breathing problem which forced him to stay in his native
place, wherefrom he had been making all correspondence
with regard to his disability compensation. Prima facie,
therefore, considering all the facts together, a part or fraction
of cause of action arose within the jurisdiction of the Patna
High Court where he received a letter of refusal disentitling
him from disability compensation.”
(emphasis supplied)
28. It can be noticed from the above, that the Supreme Court
has held that since all claims and representations were filed from his
home address at Gaya and those letters and representations were
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entertained by the respondents and replied and a decision on those
representations were communicated to him on his home address in
Bihar, this would constitute a part or a fraction of the cause of action
that arose within the jurisdiction of the Patna High Court.
29. A Division Bench of this Court in Damomal Kauromal
Raisingani V/S Union of India [AIR 1967 Bom 355] has also
held that the cause of action arises at the place where the order is made
and also at the place where its consequences are felt. The relevant
paragraph in this regard, is as under:-
“5. The question that arises is whether the cause of action for the
exercise of the power invoked by the petitioner arose wholly
or in part within the territories in relation to which this Court
exercises jurisdiction. The petitioner, as it appears, was a
resident of Ullasnagar, a place situated in the district of
Thana of Maharashtra State. The impugned order itself shows
that the case was heard in Bombay. It is indeed true that the
order on the face of it does not show the place where it was
made. Even assuming that this order was made by respondent
No. 3 in New Delhi, there can hardly be any doubt that the
effect of this order fell on the petitioners at Ullasnagar where
he resides. It is also not in dispute that the proceedings that
would be taken against the petitioner in consequence of the
impugned order would be by officers located within the
territories in relation to which this Court exercises
jurisdiction. Though in different context, the question arose as
to the place where the cause of action would arise, the
question was considered by a Division Bench of which I was a
member in W.W. Joshi v. State of B’bay [(1958) 61 Bom. L.R.
829.] . A civil servant was removed from service and the
question arose as to where the cause of action to get quashed
the order of removal from service arose, and it was held that
the cause of action would arise at the place where the order of
termination of service was made and also at the place where
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the consequences fell on the servant. In view of this decision,
there can hardly be any doubt that the place where the
consequences of the order fell on the petitioner would be a
place where at least the cause of action in part would arise.
No good ground is shown to us by Mr. Vaidya to differ from
the view taken by the Division Bench in the aforesaid case.
The second ground also should fail.”
(emphasis supplied)
30. In Wills India Insurance Brokers (P.) Ltd. V/S
IRDA [(2012) 22 taxmann.com 154 (Bom)], this Court held that
simply because the head office of the authority was at Hyderabad, it
could not be said that the Petitioner was not affected by the decision
within the territorial jurisdiction of this Court where its registered office
was located. The relevant paragraphs in this regard are brought out
hereunder:-
“11. So far as the preliminary objection taken up by Mr.
Andhyarujina regarding territorial jurisdiction of this Court is
concerned, it is required to be noted that the registered office of
the Company is located at Mumbai, the application for renewal
is made at Mumbai, the decision was taken by the first
respondent at Hyderabad as the office of first respondent is
located at Hyderabad. At this stage, reference is required to be
made to Article 226(2) of the Constitution of India which reads
thus:
“(2) The power conferred by clause (q) to issue directions,
orders or writs to any Government, authority or person may
also be exercised by any High Court exercising jurisdiction
in relation to the territories within which the cause of
action, wholly or in part, arises for the exercise of such
power, notwithstanding that the seat of such Government or
authority or the residence of such person is not within those
territories.”
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12. In view of the above, it cannot be said that the first petitioner
company is not affected by the impugned decision within the
territorial jurisdiction of this Court. Simply because the head
office of respondent No.1 is located at Hyderabad and since the
decision was taken at Hyderabad which is communicated to the
first petitioner at Mumbai, it cannot be said that only Hyderabad
High Court will have jurisdiction to decide the dispute. It can
safely be said that part of the cause of action has arisen within
the territorial jurisdiction of this Court. We are, therefore, of the
opinion that substantial part of the cause of action can be said to
have arisen within the jurisdiction of this Court and the petition
before this Court is maintainable. At this stage Mr.
Andhyarujina has relied upon the decision of the Supreme court
in the case of State of Rajasthan v. Swaika Properties [1985] 3
SCC 217. In the aforesaid case, the proceedings regarding
acquisition of the land were initiated by Rajasthan State
Government. The land was located at Jaipur. The Company was
located at Calcutta. The Company representative appeared
before the authority at Jaipur. The acquisition of the land was
recommended by the authority to the State Government. The
notification acquiring the land was issued by the Rajasthan State
Government. The petition challenging the acquisition
proceedings and notification was filed in the Calcutta High
Court and considering the facts of the case it was held that the
petition before the Calcutta High Court was not maintainable. In
the aforesaid case it was noted that the cause of action arose in
Jaipur. As pointed out earlier, the land was situated at Jaipur.
The notification was issued at Jaipur. Considering the aforesaid
factual background, it was held that the Calcutta High Court
had no jurisdiction to enter into the matter. In the instant case,
as pointed out earlier, the first petitioner’s registered office is
located at Mumbai, it operates its business from Mumbai but
since the office of first respondent is at Hyderabad that the
renewal application was required to be preferred at Hyderabad.
In our view, part of the cause of action can be said to have
arisen within the territorial jurisdiction of this Court.”
(emphasis supplied)
31. More recently, in Teleperformance Global Services
Pvt. Ltd. V/S ACIT [(2021) 435 ITR 725 (Bom)], a Division Bench
of this Court dealt with a case where the assessment order was passed in
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Delhi against a non-existent entity which had amalgamated with the
Petitioner in Mumbai. The Court held that since the successor company
was in Mumbai and the impact of the order was felt in Mumbai, a part of
the cause of action arose in Mumbai. Paragraph 19 of the judgment is
brought out hereunder:-
“19. In the present case, it is seen there is acceptance in reply on
behalf of respondents that petitioner is a successor company
of erstwhile M/s. Tecnovate Esolutions Pvt. Ltd. and
successor has its registered office at Mumbai and is stationed
at Mumbai carrying in business. After impugned notice dated
30th March, 2019, correspondence from the petitioner’s side
ensued from September, 2019 onwards has not been disputed.
It would not be said to be a case wherein no part of cause of
action has arisen for the petitioner where petitioner would to
be affected by impugned order, going by decisions referred to
on behalf of petitioner. Having regard to facts and
circumstances and the decisions, relied on, on behalf of the
petitioner, it does not appear that resistance to the petition on
the ground of jurisdiction would carry any efficacy.”
(emphasis supplied)
32. Similar views were taken in Uber India Systems Pvt.
Ltd. V/S ACIT [(2024) 168 taxmann.com 200 (Bom)]. The
Court held that the person who is required defend the notice is within
the jurisdiction of this Court, atleast part of cause of action, arises here.
In paragraph 10 of the judgment, the Court held thus:-
“10. At the outset, we may observe that Respondent no. 1 is based at
Hyderabad in the State of Telangana. Thus, at the outset, we
address the issue as to whether this Court can exercise jurisdiction
under Article 226 of the Constitution, when Respondent No.1,
against whom the relief is sought, is not situated within the
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territorial jurisdiction of this Court. In this context, we may
observe that it is not in dispute that, in the facts of the present case,
although the impugned notice is issued to the assessee which is a
non existent company, the same is served on the Petitioner, whose
registered office is within the territorial jurisdiction of this Court,
and who has received the impugned notice at Mumbai. It is the
Petitioner which is required to defend such notice as served on it at
Mumbai. The Petitioner is an Assessee within the jurisdiction of
the Tax Authorities at Mumbai. In this situation, in our opinion,
certainly a part of the cause of action, in terms of clause (2) of
Article 226 of the Constitution of India, has arisen within the
territorial jurisdiction of this Court, which, in our opinion, entitles
the Petitioner to approach this Court invoking its jurisdiction
under Article 226 of the Constitution, with a grievance of breach of
its legal and constitutional rights. The position of law in this
context is also considered and discussed in the decision of this
Court in Teleperformance Global Services (P) Ltd. (supra), which
is aptly applicable to the case in hand. We are thus inclined to
entertain this Petition, considering that a part cause of action has
arisen within the territorial jurisdiction of this Court.”
(emphasis supplied)
33. Lastly, a reference is made to the decision of this Court
dated in Vincent Commercial Company Limited V/S ITO
[(2025) 307 Taxman 320 (Bombay)] where one of us (B. P.
Colabawalla, J.) is a party. This was a case, where a company registered
in Mumbai was issued notice under Section 148 of the Act, by an Officer
of Kolkata. In this context, the Revenue had raised an argument of
Forum conveniens. The same was dealt in the judgment as under:-
“5. We have heard the learned advocates for the parties on the issue
of the territorial jurisdiction of this Court. It is not in dispute
that the Petitioner, originally, had its registered office in
Kolkata. However, in 2017, the registered office of the Petitioner
was shifted to Mumbai. A certificate to that effect has also been
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issued by the Registrar of Companies [Ministry of Corporate
Affairs] dated 17th May, 2017. In fact, this certificate, which can
be found at page 108 of the paper book, specifically states that
the Petitioner by a special resolution altered its Memorandum of
Association with respect to the place of the registered office by
changing it from the State of West Bengal to the State of
Maharashtra, and such alteration has been confirmed by the
order of the Regional Director dated 10th February, 2017. In
other words, the registered office of the Petitioner was changed
to Mumbai as far back as on 10th February, 2017.
6. In the present case, the Assessment order in question is for AY
2019 2020. Even in the Income Tax Returns filed for the said
assessment year, the address of the Petitioner is shown as B-
11/12, Bhiwandiwala Terrace, Ground Floor, Princess Street,
Marine Lines, Mumbai 400002. However, the details of the
Assessing Officer are reflected as “Ward 12[1], KOLKATA”.
This has happened because the Petitioner has not informed the
Assessing Officer that its registered office has been shifted from
Kolkata to Mumbai.
7. The notice issued to the Petitioner under Section 148(A)(b) of
the Income Tax Act, though reflected the address of the
Petitioner’s office at Kolkata (its previous address), seeks to
open a transaction entered into by the Petitioner for AY 2019-
2020 with an entity called M/s. Aneri Fincap Ltd., which is also
a Company incorporated and registered in the State of
Maharashtra. This is also clear from page 138 of the paper
book. Further, the proceedings have been opened on the basis of
the case related information details, which also reflects the
address of the Petitioner as that of the Mumbai. This document
is at page 120 of the paper book.
8. When one looks at all these factors, we find that atleast a
substantial portion of the cause of action has arisen within the
territorial jurisdiction of this Court. If any cause of action has
arisen outside its territorial jurisdiction, it would be only that
the notice under Section 148 was issued by the Assessing Officer
based in Kolkata and at the previous address of the Petitioner at
Kolkata. Further, the learned advocate appearing on behalf of
the Petitioner, on instructions, has stated before the Court that
on the date when the notice under Section 148(A)(d) was issued
to the Petitioner, the Petitioner did not have any office at the
address mentioned in the said notice namely in Kolkata. Once
these are the facts, we are clearly of the view that a substantial
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part of the cause of action has arisen within the territorial
jurisdiction of this Court.
9. Once we have come to this conclusion, we find that Article
226(2) of the Constitution of India, clearly stipulates that the
power to issue writs, orders, or directions to any Government,
Authority, or person may be exercised by any High Court
exercising jurisdiction in relation to the territory within which
the cause of action, wholly or in part arises, for the exercise of
such power, notwithstanding that the seat of such Government
or Authority, or the residence of such person is not within those
territories.
10. Once we are of the view that a substantial part of the cause of
action has, in fact, arisen within the territorial jurisdiction of
this Court, then, notwithstanding the fact that the Assessing
officer is based in Kolkata, this Court would certainly have
jurisdiction to entertain the above Writ Petition.
11. As far as the issue of Forum Conveniens is concerned, we find
no merit in the aforesaid argument. Firstly, we find that this
concept would not apply to the facts of the present case, merely
because the Assessing Officer is based in Kolkata. The entire
transaction which is sought to be opened in the notice issued
under Section 148 has, in fact, taken place within the territorial
jurisdiction of this Court. If at all, if we have to drive the
Petitioner to go the Calcutta High Court it would be of a greater
inconvenience to the Petitioner. Secondly, having held that the
substantial cause of action has arisen within the territorial
jurisdiction of this Court, we certainly would have the
jurisdiction to entertain the above Writ Petition. Hence, the
preliminary objection raised by Mr. Sharma, is accordingly,
rejected.”
(emphasis supplied)
34. When the facts of the present case are kept in juxtaposition
to the legal principles as brought out earlier, it can be clearly discerned
that:-
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(a) the erstwhile entity has amalgamated with the Petitioner,
which has its registered office in Pune, within the jurisdiction
of this Court;
(b) the recovery notice was received in Pune, within the
jurisdiction of this Court;
(c) the recovery notice and the demands, even if originating from
orders passed in Delhi, have a direct impact on the Petitioner
in Pune which is within the jurisdiction of this Court;
(d) the Petitioner who is within the jurisdiction of this Court,
would be affected by the recovery notice and the alleged
demands;
(e) the consequences of the recovery notices and the alleged
demand will be felt in Pune, within the jurisdiction of this
Court;
(f) it is the Petitioner, who is within the jurisdiction of this
Court, who has to defend the proceedings and face the
coercive recovery actions.
35. Therefore, a part of the cause of action has clearly arisen
within the territorial jurisdiction of this Court.
36. In fact, the case of the Petitioner is on a better footing as
compared to the other cases. In the present case, the Principal
Commissioner of Income-tax, Delhi-1, vide order dated 13.12.2023
under Section 127 of the Act, has transferred the jurisdiction over the
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case to the DCIT/ACIT Circle-1(1), Pune. In this regard, reference can be
made to the Explanation to Section 127 which clarifies the amplitude of
“transfer of case” in relation to any person whose name is specified in
the order of transfer. It reads thus:-
“Explanation.- In section 120 and this section, the word “case”, in
relation to any person whose name is specified in any
order or direction issued thereunder, means all
proceedings under this Act in respect of any year which
may be pending on the date of such order or direction or
which may have been completed on or before such date,
and includes also all proceedings under this Act which
may be commenced after the date of such order or
direction in respect of any year”
37. Thus, a transfer [under Section 127] implies that all
proceedings under the Act in respect of any year which may be pending
or which may have been completed or which is yet to be initiated is
transferred to the transferee officer. Thus, the jurisdiction over the
completed assessments of A.Y.2001-02 to A.Y.2003-04 also stands
transferred to the Pune Officer i.e., Respondent No.1. The Delhi Officer
is now functus officio. Any relief regarding the impugned demands can
only be granted by the Pune Officer (Respondent No.1). The Petitioner
is, therefore, correct in contending that since the officer who is to defend
the case, redress grievances, and deal with recovery of the alleged
demand, is now in Pune. Therefore, he is the right officer to whom a writ
can be issued. In fact, prayer clause 12(b) and 12(c) (reproduced in the
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later part) also seek reliefs which can be granted only against
Respondent No.1 who is the current officer. In fact, it has been brought
on record by Mr. Gandhi, that Respondent No.1 has dealt with the other
assessment years of the erstwhile entity i.e., A.Y.2006-07 and A.Y.2013-
14 and naturally so, since he is the current jurisdictional assessing
officer. If that be the case, he has to defend the present case as well,
though he may not be the Officer who has initiated the actions.
Therefore, we see no impediment to entertain the present Petition.
38. This now leaves us to deal with the contentions of Mr.
Gupta. Firstly, the overwhelming reliance on the decision in case of Lt.
Col. Khajoor Singh (supra) is completely misplaced. As already
discussed earlier, much water has flown thereafter, in terms of
Constitutional Amendments and the interpretation thereof as placed by
the Hon’ble Apex Court and this Court. Therefore, reading the said
decision in isolation would not be correct. Lt. Col. Khajoor Singh
(supra) was a case where the concept of “cause of action” was argued to
be one of the factors to be considered to entertain a Writ Petition at a
point of time, when there was no such provision in Article 226. This was
not accepted by the Court. In fact, the Court noticing the inconvenience
caused, also suggested that it is only a Constitutional Amendment that
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can give any relief in this regard. Once there is a constitutional
Amendment in terms of Article 226(2), then while interpreting Article
226(2), the decision in Lt. Col. Khajoor Singh (supra) will have no
application as held by the Supreme Court itself in many cases referred
earlier.
39. Secondly, Mr. Gupta placed reliance on the decision of ABC
Papers Limited (supra) to contend that an appeal under the Act is to be
filed before the Tribunal/ Court within whose jurisdiction the Assessing
Officer who passed the original order appealed against is located, and
therefore, a similar analogy has to be drawn in context of a Writ Petition
as well. This argument cannot be accepted as the provisions of section
260A of the Act are materially different from the provisions of Article
226(2) of the Constitution of India. Even the jurisdiction of the Court
under Article 226(2) and under section 260A of the Act are quite
different. The Court in ABC Papers Limited (supra) never had the
occasion to interpret Article 226(2), the term “cause of action, wholly or
in part” as appearing therein, and therefore, this decision would not
have any bearing for interpreting Article 226 of the Constitution of
India.
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40. Thirdly, the reliance placed by the Revenue on the decision
of this Court in case of Trustcap Private Limited (supra) is also
misplaced. A perusal of that order shows that the Court relied on Lt. Col.
Khajoor Singh (supra) without noticing that Khajoor Singh was
rendered in the context of Article 226(1) prior to the amendment
introducing the concept of cause of action. As clarified by the Supreme
Court in Kusum Ingots (supra), Om Prakash Srivastava (supra),
Navinchandra N. Majithia (supra) and Naval Kishore Sharma (supra),
the decision in Khajoor Singh (supra) has no application when
jurisdiction is invoked under Article 226(2) based on the accrual of a
part of the cause of action. Further, the Court in Trustcap (supra) had
not considered the decisions of the Apex Court in case of Om Prakash
Srivastava (supra), Navinchandra N. Majithia (supra) and Naval
Kishore Sharma (supra) and that of this Court in case of Damomal
(supra), Teleperformance (supra) and Uber India (supra). Further, the
decision in Trustcap (supra) is based on the peculiar facts involved
therein, where the Court applied the principles of Forum conveniens to
relegate the Petitioner to avail its remedy before the Calcutta High
Court. The doctrine of Forum convenies and “cause of action” are very
fact specific and a Court has to consider each matter on appreciation of
the facts involved therein. Since, the Petitioner herein has established
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that a part of the cause of action has arisen in Pune and the jurisdiction
has been transferred to Pune, the decision in Trustcap (supra) in any
event does not assist the Revenue.
41. Fourthly, the contention of Mr. Gupta that provisions of
Article 226(2) should be construed as a requirement in addition to the
provisions of Article 226(1) has to be noted only for rejection. Article
226(2) has used the phrase “may also be exercised” which clearly
suggests that Article 226(2) is not an additional condition but an
alternate condition. Moreover, Article 226(1), as interpreted by the Apex
Court provides for a Court to issue a writ only to the authorities within
the territories of that Court, whereas Article 226(2) provides that
notwithstanding that the seat of Government or authority or the
residence of such person is not within those territories, a writ can be
issued by a Court where part or whole of cause of action arise. The two
clauses are mutually exclusive and both cannot apply simultaneously by
the very wordings of the clauses. Therefore, it is not correct to argue that
for Article 226(2) to apply, Article 226(1) has to trigger. If the view of
Mr. Gupta is accepted, then perhaps, Article 226(2) would become
redundant. The whole purpose of introducing Article 226(2) was to
alleviate the inconvenience caused to the Petitioners by dragging them
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to the Court which exercises jurisdiction over the authority or the
Respondent within the territorial jurisdiction of such Court. Reliance in
this regard, on the decision of the Delhi High Court in case of Jayaswals
Neco Ltd. (supra) is also, therefore, misplaced.
42. Accordingly, we reject the preliminary objection regarding
territorial jurisdiction. We are of the considered view that at least part of
the cause of action has arisen within the territorial jurisdiction of this
Court, and therefore, we proceed to deal with the merits of the case.
43. The Petitioner’s case on merits is that the demands of
Rs.3,28,785/-, Rs.1,24,577/- and Rs.28,87,714/- are non-existent. The
Petitioner has categorically stated that despite filing applications under
the RTI Act and obtaining orders from the First Appellate Authority
directing the Respondents to furnish the documents, no assessment
orders or rectification orders giving rise to these demands have been
provided. The Respondents have only furnished illegible screenshots of
the computation sheets.
44. By the order dated 24.02.2025, this Court had specifically
directed the Respondents to file affidavits on merits and appraise the
Court regarding the status of records. The affidavit filed by Respondent
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No.1 merely states that the records have not been physically transferred
from Delhi. Respondent No.2, i.e., the Delhi Officer, despite service, has
not filed any reply. This Petition was filed in September 2024, and this
Court had directed the Respondents to file their reply vide order dated
24.02.2025. A reply was filed by Respondent No.1 in April 2025 and we
are now in March 2026. More than a year has elapsed from the date of
the first order of this Court, and yet the Respondents have failed to
produce the basic orders creating the demand.
45. In Bharat Serums and Vaccines Limited V/S DCIT
[Writ Petition (L) No. 3498 of 2024 decided on 02.04.2024],
this Court, held that where the Department failed to produce the order
giving rise to the demand despite RTI applications and court directions,
the demand was liable to be quashed. The relevant portion of this
decision reads thus:-
“5. On perusal of the portal sometime in April 2021, it was found that
a demand of Rs.46,84,750/- was appearing in the portal as against
the erstwhile entity. It appeared that the demand arose out of an
order passed under Section 154 of the Act on 31 st March 2021 for
Assessment Year 2013-2014. As no communication had been
received with regard to the said order, representations were made
to respondent no.1 to provide copy of the rectification order dated
31st March 2021 passed under Section 154 of the Act. As no
response was received, petitioner even filed an application under
the RTI Act, 2005. In response to the application, petitioner was
served with a copy of the computation sheet. Petitioner, therefore,
preferred an appeal under Section 19(1) of the RTI Act, 2005
before the First Appellate Authority. Petitioner’s application was
disposed by the First Appellate Authority by an order dated 18 th
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July 2023 and respondents were directed to re-examine the matter
and furnish full and appropriate information sought within 15 days
from the date of receipt of the order. Notwithstanding this direction
by the First Appellate Authority, petitioner received from the
Assessing Officer, by a letter dated 4 th August 2023, the same
documents which were provided earlier. Though the forwarding
letter dated 4th August 2023 provides for copy of order passed
under Section 154 of the Act, it is petitioner’s case, and which has
not been controverted, that only the same computation sheet was
provided but not an order. Even the screenshot of the order sent
through email is illegible.
6. No affidavit in reply has been filed. Mr. Gupta appearing for
respondents informed the Court that he has instructions from
respondent no.1- Mr. Basant Kumar Arya that the demand has
been uploaded by the erstwhile Deputy Commissioner of Income
Tax on the portal but the Department does not have any file
relating to that matter. Mr. Gupta states that his instructions are to
inform the Court that respondent no.1 or the Department has no
document to show that any notice was issued under Section 154 or
even an order was passed under Section 154 of the Act. Mr. Gupta
also states that if the Court directs respondents, they shall remove
the pending demand from the Income Tax Portal pertaining to
petitioner.
7. In view of the statement made by Mr. Gupta as recorded above, we
have to quash and set aside the demand of Rs.46,84,750/- for
Assessment Year 2013-2014 as appearing on petitioner’s portal
and the computation sheet under Section 154 of the Act dated 31 st
March 2021, which we hereby do. The demand appearing on the
portal shall also be removed. This has to be completed within two
weeks of this order being uploaded.”
46. Similarly, in Udayan Bhaskaran Nair V/S DCIT
[(2026) 183 taxmann.com 47 (Bom)], this very Bench held that in
the absence of any intimation or order raising the demand, recovery of
such non-existent demand cannot be made. Relevant paragraphs of the
said judgment are reproduced hereunder:-
“21. Admittedly it is now the case before us that even though it is
claimed by the Respondents that the intimation under Section
143(1) was issued for the relevant Assessment year 2010-11,
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however the Respondents have failed to bring on record any
such intimation claimed to have been issued under Section
143(1) or the notice of demand claimed to have been served
upon the Petitioner. Even the Petitioner had asked for the
same from the Respondents vide his rectification application
dated 07.11.2017 but the same was never furnished to the
Petitioner. Even in the affidavit in reply dated 01.12.2025,
Respondent No.1 has not produced the intimation under
Section 143(1) which he claims is issued. It was not
produced even before the Commissioner of Income Tax
(Appeals) or the Tribunal.
22. Thus, we are of the view that in the absence of any intimation
under Section 143(1) raising the demand or any independent
notice of demand, recovery of such non-existent demand
cannot be made against the Petitioner.”
47. In the present case, there is absolutely no material on
record to substantiate the existence of valid orders giving rise to the
impugned demands. The Respondents have failed to produce the orders
and service records, despite repeated opportunities. The failure of
Respondent No.2 to respond and the inability of the Pune Officer to
locate records leads to the inevitable conclusion that no such valid
orders exist or were ever served upon the Petitioner. An adverse
inference must necessarily be drawn against the Respondents. Old
matters and demands cannot be allowed to suddenly surface on the
portal without the underlying orders being available and served.
Consequently, the impugned demands cannot be sustained.
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48. In view of the foregoing discussion, we allow the Petition in
terms of prayer clauses 12(a) and 12(b), which read as follows:-
“(a) that this Hon’ble Court may be pleased to issue a Writ of Certiorari or
a Writ in the nature of Certiorari or any other appropriate Writ, Order
or direction, calling for the records of the Petitioner‘s case and after
going into the legality and propriety thereof, to quash and set aside the
demand of Rs. 3,28,785/- for AY 2001-02, Rs. 1,24,577/- for AY 2002-
03 and Rs. 28,87,714/- for AY 2003-04; the demand recovery notice
dated 05.02.2023 (Exhibit C); the computation sheet under dated
27.08.2003 (forming part of “Exhibit E1”) and the computation sheet
under dated 28.02.2003 (forming part of “Exhibit E2”).
(b) that this Hon’ble Court may be pleased to issue a Writ of Certiorari or
a Writ in the nature of Certiorari or Writ of Mandamus or a Writ in the
nature of Mandamus or any other appropriate Writ, Order or
direction, calling for the records of the Petitioner‘s case and after
going into the legality and propriety thereof, to direct the Respondent
No. 1 to withdraw the demand of Rs. 3,28,785/- for AY 2001-02, Rs.
1,24,577/- for AY 2002-03 and Rs. 28,87,714/- for AY 2003-04; the
demand recovery notice dated 05.02.2023 (Exhibit C); the computation
sheet under dated 27.08.2003 (forming part of “Exhibit E1”) and the
computation sheet under dated 28.02.2003 (forming part of “Exhibit
E2″).”
49. Rule is made absolute in the aforesaid terms, and the Writ
Petition is also disposed of in terms thereof. However, there shall be no
order as to costs.
50. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production by
fax or email of a digitally signed copy of this order.
[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]
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