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2016 (2) TMI 936 - HC - Income TaxTerritorial jurisdiction of court - writ of mandamuss directing the respondent not to take any coercive steps against the petitioner company which is under the Board for Industrial & Financial Reconstruction (BIFR) as per the provisions of SICA invoking the provisions of Income Tax Act 1961 - whether this Court lacks territorial jurisdiction to entertain the writ petition filed as against the respondent? - Held that - The respondent at Chennai has not participated in any of the action of the petitioner. Though the petitioner had deducted TDS the same has been remitted only to the Income Tax Office at New Delhi. When the respondent has no role to play in the acts of the respondent at Chennai there is no cause of action arise for filing the writ petition at Chennai. Mr.P.S.Raman learned senior counsel appearing for the petitioner fairly submitted that it cannot be said that Delhi High Court shall not have jurisdiction to entertain the writ petition. Since there is no cause of action either wholly or in part occurred at Chennai this Court has no jurisdiction to entertain the writ petition filed by the petitioner.
Issues:
Jurisdiction of the High Court to entertain a writ petition against the respondent based on the territorial location of the cause of action. Analysis: The petitioner filed a writ petition seeking a mandamus to prevent the respondent from taking coercive steps against the petitioner company under the Sick Industrial Companies Act, 1985, invoking provisions of the Income Tax Act, 1961. The respondent contended that the High Court lacked territorial jurisdiction to entertain the petition as the cause of action did not arise within its jurisdiction. The petitioner argued that since a part of the cause of action arose in Chennai, where the petitioner's office is located, the High Court had territorial jurisdiction. The petitioner relied on Supreme Court judgments emphasizing that the High Court can exercise jurisdiction where the cause of action, wholly or in part, arises within its territory. The respondent countered by stating that the relief sought in the petition was based on an order issued in New Delhi and that all assessment records were only available there, not in Chennai. Citing a Delhi High Court judgment, the respondent argued that since the petitioner was assessed in New Delhi and all records were there, only the Delhi High Court had jurisdiction. The respondent emphasized that the mere presence of the petitioner's office in Chennai did not confer territorial jurisdiction on the Madras High Court. The respondent further highlighted that the petitioner's income tax returns were filed in New Delhi, and TDS deductions were remitted there, reinforcing the lack of territorial connection to Chennai. The Court considered the constitutional provisions and legal principles governing territorial jurisdiction. It noted that the power to issue writs can be exercised by a High Court where the cause of action, wholly or in part, arises within its territory. Referring to the Civil Procedure Code, the Court emphasized that a suit must be instituted where the cause of action arises. In this case, it was established that the respondent in Chennai had no involvement in the actions of the petitioner, and the cause of action did not arise in Chennai. Therefore, the Court concluded that it lacked territorial jurisdiction to entertain the writ petition. The Court rejected the petition solely on the ground of territorial jurisdiction without delving into the merits of the case, in line with the legal principles governing territorial jurisdiction.
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