2022 (6) TMI 1388 - HC - Income Tax

Settlement of case by Income Tax Settlement Commission - petitioner was assessed before an authority in a different State - Writ Filled challenging Order of the Settlement Commission rejected on the ground that the petitioner was assessed before an authority in a different State - HELD THAT - This Court in Mulberry Skills Ltd Vs. Settlement Commission 2020 (9) TMI 771 - MADRAS HIGH COURT wherein a writ filed in identical circumstances, challenging an order of the Settlement Commission, came to be rejected on the ground that the petitioner was assessed before an authority in a different State. In that case the assessee in Karnataka, whereas, in the present case the Assessing Authority/R3, is in the State of Kerala. Writ appeal is dismissed leaving it open to the appellant to move the High Court of Karnataka if they are so advised In this matter as well, it open to the petitioner to move the Kerala High Court, if they are so inclined. Writ Petition stands dismissed. Connected writ miscellaneous petitions are closed.

Summary

Issues: Jurisdiction of High Court in writ petitions challenging orders of Settlement Commission

Analysis:

1. Jurisdiction of High Court based on territorial considerations:
The judgment refers to a previous decision where a writ challenging an order of the Settlement Commission was rejected due to the petitioner being assessed before an authority in a different State. The current case involves the Assessing Authority being in the State of Kerala. The doctrine of dominuslitis and situs of the Appellate Tribunal are discussed, emphasizing that the situs of the Tribunal may vary, and the determination of High Court jurisdiction should be based on the relevant statute. The judgment highlights that the Parliament did not contemplate a situation where more than one High Court may have jurisdiction due to the cause of action doctrine.

2. Rejection of writ petition due to lack of territorial jurisdiction:
The appellant, being an assessee on the file of the Deputy Commissioner of Income Tax in Bangalore, filed an appeal before the Commissioner of Income Tax in Bangalore. The Single Judge rightly rejected the writ petition citing lack of territorial jurisdiction, leading to the Settlement Commission's order not calling for interference. The judgment clarifies that the dismissal of the writ appeal was solely due to the lack of territorial jurisdiction, and the merits of the appellant's case were not addressed in the judgment. The appellant is given the option to move the High Court of Karnataka if desired.

3. Option to move the Kerala High Court:
Similar to the previous case, the petitioner in this matter is also given the option to move the Kerala High Court if they choose to do so. The judgment dismisses the Writ Petition and closes the connected writ miscellaneous petitions without imposing any costs.

In conclusion, the judgment emphasizes the importance of territorial jurisdiction in determining the High Court's authority to entertain writ petitions challenging orders of the Settlement Commission. It provides clarity on the legal principles regarding jurisdiction based on territorial considerations and offers the parties the opportunity to seek remedy in the appropriate High Court based on the location of the Assessing Authority.