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2025 (4) TMI 943 - HC - Income TaxTerritorial jurisdiction of the Bombay High Court to entertain this petition - HELD THAT - In this case even if we proceed on the basis that the minuscule part of the cause of action may have arisen in Mumbai that will not be a determinative or compelling factor to exercise the discretion under Article 226 for entertaining this petition. In Wills India Insurance Brokers (P.) Ltd. 2011 (3) TMI 1807 - BOMBAY HIGH COURT the court found that a part of the cause of action had significantly arisen in Bombay and based on that finding the petition was considered. Kusum Ingots 2004 (4) TMI 342 - SUPREME COURT has been clarified by the Full Bench of the Delhi High Court. Kusum Ingots (supra) itself discusses the principles of forum conveniens which is applicable in the present case. In the context of appeals under Section 260A of the Income-tax Act the Hon ble Supreme Court in the case of ABC Papers ltd. 2022 (8) TMI 863 - SUPREME COURT has held that the appellate jurisdiction of the High Court is exercisable by the High Court within whose territorial jurisdiction the assessing officer is located. Thus even the location of ITAT is held not to be determinative. The location of the assessing officer is crucial. However this was the decision in the context of an appeal u/s 260A and not a Writ petition under Articles 226 and 227 of the Constitution. Still for all the above reasons we are satisfied that the interest of justice will be met if the petitioner is relegated to avail of the remedies at Kolkata. Accordingly we decline to entertain this petition but leave the petitioner free to avail of the remedies at Kolkata. All parties contentions on merits are left open.
The core legal questions considered by the Court in this judgment revolve around the territorial jurisdiction of the High Court under Article 226 of the Constitution in relation to a writ petition challenging orders and notices issued under the Income Tax Act, 1961. Specifically, the issues are:
Issue-wise Detailed Analysis 1. Territorial Jurisdiction of the High Court under Article 226 Legal Framework and Precedents: The Court examined the language of Article 226, which confers jurisdiction on a High Court to issue writs to any person or authority within its territorial limits. The Supreme Court's ruling in Lt. Col. Khajoor Singh was pivotal, emphasizing that jurisdiction depends on the location of the authority or person against whom relief is sought, not the residence or location of the aggrieved party. Other relevant precedents include Kusum Ingots & Alloys Ltd. and ABC Papers Ltd., which discuss the territorial limits and appellate jurisdiction under the Income Tax Act. Court's Interpretation and Reasoning: The Court held that since the impugned notices and orders were issued by Income Tax authorities based in Kolkata, and the case papers and assessing officers are located there, the substantial cause of action accrued in Kolkata. The petitioner's registered office being in Mumbai, and the notices being sent to that address, does not confer jurisdiction on the Bombay High Court. The Court relied heavily on the principle that the jurisdiction of a High Court under Article 226 is tied to the location of the authority passing the order. Key Evidence and Findings: The petitioner's registered office is in Mumbai, as updated in the PAN database, and the notices were sent there. However, the issuing authorities and relevant case materials are in Kolkata. Application of Law to Facts: The Court applied the principle that the place where the order is passed is determinative of jurisdiction, not where its effects are felt. The petitioner's argument that the impact of the order in Mumbai gives jurisdiction was rejected based on the Supreme Court's clear guidance. Treatment of Competing Arguments: The petitioner relied on precedents where partial cause of action in a jurisdiction was sufficient, but the Court distinguished those by emphasizing the doctrine of forum conveniens and the need to avoid conflicting jurisdictions. Conclusion: The Court concluded that Bombay High Court does not have territorial jurisdiction to entertain the petition. 2. Doctrine of Forum Conveniens Legal Framework and Precedents: The doctrine of forum conveniens, as explained by the Full Bench of the Delhi High Court in Sterling Agro Industries Ltd. and supported by Supreme Court rulings in Kusum Ingots and others, requires the Court to consider the convenience of all parties, the existence of a more appropriate forum, expenses, and the law relating to the lis before exercising discretionary jurisdiction under Article 226. Court's Interpretation and Reasoning: The Court found that although a small part of the cause of action might have arisen in Mumbai, this alone is not sufficient to compel the Bombay High Court to exercise jurisdiction. The balance of convenience, location of evidence, and assessing authorities favored Kolkata, making it the more appropriate forum. Key Evidence and Findings: The impugned orders and notices originated in Kolkata, and the relevant records and authorities are located there. Application of Law to Facts: Applying forum conveniens, the Court held it appropriate to relegate the petitioner to seek remedies in Kolkata, avoiding multiplicity of proceedings and conflicting jurisdictions. Treatment of Competing Arguments: The petitioner urged that the registered office and impact in Mumbai justified jurisdiction there, but the Court found these factors insufficient to override the principle of forum conveniens. Conclusion: The petition was declined on the ground of forum conveniens, with liberty to approach the competent forum in Kolkata. 3. Relevance of Registered Office and Cause of Action Legal Framework and Precedents: The Court referred to the Supreme Court's observations in Lt. Col. Khajoor Singh that the residence or location of the affected person is irrelevant for determining jurisdiction under Article 226. The cause of action must be considered in light of where the order was passed and the authority is situated. Court's Interpretation and Reasoning: The petitioner's registered office in Mumbai and the PAN database address do not confer jurisdiction on the Bombay High Court. The Court emphasized that the cause of action arising partially in Mumbai is a "minuscule portion" and not determinative. Key Evidence and Findings: The petitioner's registered office is in Mumbai; however, the notices and orders emanated from Kolkata. Application of Law to Facts: The Court applied the principle that jurisdiction depends on the location of the authority passing the order, not the petitioner's address or where the order's effects are felt. Treatment of Competing Arguments: The petitioner's reliance on partial cause of action and registered office was rejected based on binding precedents. Conclusion: The petitioner's registered office location is not a sufficient ground for jurisdiction in Mumbai. 4. Applicability of Precedents on Jurisdiction and Appeals Legal Framework and Precedents: The Court examined precedents such as Kusum Ingots, ABC Papers Ltd., and Sterling Agro Industries Ltd. to distinguish between appellate jurisdiction under Section 260A of the Income Tax Act and writ jurisdiction under Article 226. The Supreme Court in ABC Papers held that appellate jurisdiction depends on the location of the assessing officer, not the appellate tribunal. Court's Interpretation and Reasoning: While ABC Papers dealt with appeals, its principle that the assessing officer's location is crucial was noted as persuasive for writ jurisdiction. The Court observed that this supports relegating the petitioner to Kolkata, where the assessing officer is located. Key Evidence and Findings: The assessing officer and authorities are based in Kolkata. Application of Law to Facts: The Court applied these principles to affirm that Kolkata is the appropriate forum for the petition. Treatment of Competing Arguments: The petitioner's reliance on precedents allowing jurisdiction where part of the cause of action arises was considered but found distinguishable on facts and forum conveniens grounds. Conclusion: The Court confirmed Kolkata as the proper forum for both appeals and writ petitions in this matter. Significant Holdings "The jurisdiction conferred on the High Court by Article 226 does not depend upon the residence or location of the person applying to it for relief; it depends only on the person or authority against whom a writ is sought being within those territories." "It is not permissible to read in Article 226 the residence or location of the person affected by the order passed in order to determine the jurisdiction of the High Court." "Even if a small portion of the 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 merits." "The doctrine of forum conveniens obliges the Court to consider the convenience of all parties, the existence of a more appropriate forum, expenses involved, and other ancillary aspects before exercising discretionary jurisdiction under Article 226." "The interest of justice will be met if the petitioner is relegated to avail of the remedies at Kolkata, where the assessing authorities and relevant records are located." Accordingly, the Court declined to entertain the writ petition before the Bombay High Court on grounds of lack of territorial jurisdiction and forum conveniens, leaving open all contentions on merits and granting liberty to the petitioner to seek remedies before the competent authorities in Kolkata.
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