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TMI Blog2022 (5) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of jurisdiction under section 148 for the assessment year 2015-16; (c) Pending the admission and final disposal of this petition, restrain the respondent from proceeding with reassessment for the assessment year 2015-16 pursuant to the impugned notice dt. 31-03-2021 and the order dt. 24-02-2022; (d) Provide for cost of this petition; (e) Pass any other order(s) as this Hon'ble Court may deem to be fit and more appropriate in order to grant interim relief to the petitioner" 2. The subject matter of challenge is the legality and validity of the notice issued by the ITO, Ward 1(1), Cuttack (State of Orissa) under Section 148 of the Income Tax Act, 1961 (for short, "the Act, 1961") seeking to reopen the assessment for the A. Y. 2015-16 under Section 147 of the Act, 1961. 3. At the outset, Mr. M. R. Bhatt, the learned Senior Counsel appearing for the Revenue raised a preliminary objection as regards the maintainability of the present writ application on the ground of the territorial jurisdiction of this High Court to entertain the present writ application. 4. Mr. Bhatt first invited the attention of this Court to page : 8 of the paper book. At page : 8 of the paper book, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue 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 or the enforcement of any of the rights conferred by Part III and for any other purpose. (2) The power conferred on a High Court by Clause (1) shall not be in derogation of the power conferred on the Supreme Court by Clause (2) of Article 32". 9. While interpreting the aforesaid provision, the Constitution Bench of the Supreme Court in the case of Election Commission, India v. Saka Venkata Rao, 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 action 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) xxxxx (4) xxxxx" 11. 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. The 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 a bundle of facts which is necessary for the plaintiff to prove in the suit before he can succeed. 12. The term 'cause of action' as appearing in Clause (2) came for consideration time and again before the Supreme Court. 13. In the case of State of Rajasthan and others v. M/s. Swaika Properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch notice was an integral part of the cause of action. The entire cause of action culminating in the acquisition of the land under Section 52(1) of the Act arose within the State of Rajasthan i.e. within the territorial jurisdiction of the Rajasthan High Court at the Jaipur Bench. The answer to the question whether service of notice is an integral part of the cause of action within the meaning of Article 226(2) of the Constitution must depend upon the nature of the impugned order giving rise to a cause of action. The notification dated February 8, 1984 issued by the State Government under Section 52(1) of the Act became effective the moment it was published in the Official Gazette as thereupon the notified land became vested in the State Government free from all encumbrances. It was not necessary for the respondents to plead the service of notice on them by the Special Officer, Town Planning Department, Jaipur under Section 52(2) for the grant of an appropriate writ, direction or order under Article 226 of the Constitution for quashing the notification issued by the State Government under Section 52(1) of the Act. If the respondents felt aggrieved by the acquisition of their lands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lcutta High Court." 15. In Kusum Ingots and Alloys Ltd. v. Union of India and another, (2004) 6 SCC 254 : (AIR 2004 SC 2321 : 2004 AIR SCW 2766), the Supreme Court elaborately discussed Clause (2) of Article 226 of the Constitution, particularly the meaning of the word 'cause of action' with reference to Section 20(c) and Section 141 of the Code of Civil Procedure and observed:- "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 smal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned. If we apply this principle then we see that none of the facts pleaded in para 16 of the petition, in our opinion, falls into the category of bundle of facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad." 17. In Om Prakash Srivastava v. Union of India and another (2006) 6 SCC 207 : (AIR 2007 SC (Supp) 1834 : 2006 AIR SCW 3823), answering a similar question the Supreme Court observed that on a plain reading of Clause(2) of Article 226 it is manifestly clear that the High Court can exercise power to issue direction, order or writs for the enforcement of any of the fundamental rights or for any other purpose if the cause of action 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 territory. In para 7 the Supreme Court observed:- "7. The question whether or not cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinitely wait for clearances from higher-ups for each and every routine step, resulting in the detention of passengers for hours and hours. In short, he wants the enquiries, verifications and investigations to be efficient, passenger-friendly and courteous. Secondly, he wants the Department/officers concerned to acknowledge that he was unnecessarily harassed." [See : Nawal Kishore Sharma v. Union of India, 2014 (5) Supreme 689] 19. While the scope and purport of the expression "cause of action" has been explained in a catena of Judgments of the Supreme Court and several High Courts, it, nonetheless, continues to remain the subject matter of immense debate and is in issue in this writ petition also. It is, therefore, necessary to note how the expression "cause of action" has been construed by the Supreme Court and High Courts and explained in the authoritative texts. 20. Thus, "Cause of action" is every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. It does not comprise of every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved. (Read (18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , arises" seems to have been lifted from Section 20 of the Code of Civil Procedure, which section also deals with the jurisdictional aspect of Courts. 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 the Supreme Court rendered on an interpretation of Section 20(c) CPC apply to writ proceedings also. [(Ambica Industries,; Kusum Ingots & Alloys Ltd. (2004) 6 SCC 2542]. 23. In order to exercise jurisdiction to entertain a writ petition, the High Court must be satisfied, from the entire facts pleaded in support of the cause of action, that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in part, arisen within its jurisdiction. (Union of India v. Adani Exports Ltd., AIR 2002 SC 126). Each and every fact pleaded in the writ petition does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court's territorial jurisdiction unless those facts are such which have a nexus or relevanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s pleaded in the writ petition. In the absence of an averment that the cause of action, or a part of it, has arisen within the territorial jurisdiction of the concerned High Court the writ petition would be rejected. 26. In fact, the Supreme Court in Mosaraf Hossain Khan v. Bhagheeratha Engg Ltd and others [2006 (3) SCC 658] after referring to Navinchandra N. Majihia v. State of Maharastra & others [2000 (7) SCC 640] has held as under :- "16. In Navinchandra N. Majithia [(2000) 7 SCC 640 : 2001 SCC (Cri) 215] a contract was entered into by and between a company, Indian Farmers Pvt. Ltd. (IFPL) and Chinar Export Ltd. (CEL). The appellant therein was the Managing Director of IFPL Company. CEL entered into an agreement with IFPL for purchase of the entire shares of IFPL for which it paid earnest money. It, however, failed to fulfil its commitment to pay the balance purchase price within the specified time. IFPL terminated the agreement. A suit was filed by CEL in the High Court of Bombay for specific performance of the said agreement. Two shareholders of CEL took over the management and control of the Company as Directors and they formed another company named J.B. Holdings Ltd. ("J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary 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 W.P.(CRL.) 1546/2013 Page 10 of 17 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 jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition as maintainable. 32. The principle of forum conveniens in its ambit and sweep encapsulates the concept that a cause of action arising within the jurisdiction of the Court would not itself constitute to be the determining factor compelling the Court to entertain the matter. While exercising jurisdiction under Articles 226 and 227 of the Constitution of India, the Court cannot be totally oblivious of the concept of forum conveniens. The Full Bench in New India Assurance Co. Ltd. (supra) has not kept in view the concept of forum conveniens and has expressed the view that if the appellate authority who has passed the order is situated in Delhi, then the Delhi High Court should be treated as the forum conveniens. We are unable to subscribe to the said view. 33. In view of the aforesaid analysis, we are inclined to modify the findings and conclusions of the Full Bench in New India Assurance Company Limited (supra) and proceed to state our conclusions in seriatim as follows (a) The finding recorded by the Full Bench that the sole cause of action emerges at the place or location where the tribunal/appellate authority/revisional authority is situate and the said High Court ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een held to be a bundle of facts which the petitioner must prove to entitle him to a judgment in his favour. 29. The "Cause of action", for the purpose of Article 226 (2) of the Constitution of India, for all intent and purport, must be assigned the same meaning as envisaged under Section 20(c) of the Code of Civil Procedure. It means a bundle of facts which are required to be proved. The entire bundle of facts pleaded, however, need not constitute a cause of action as what is necessary to be proved is material facts whereupon a writ petition can be allowed. [See Eastern Coalfields Ltd. and Others Vs. Kalyan Banerjee, (2008) 3 SCC 456]. 30. The principle of forum conveniens also makes it obligatory on the part of the Court to see the convenience of all the parties before it. Be it the existence of a more appropriate forum, expenses, law relating to the lis, convenience of the witnesses, verification and examination of the facts for adjudication of the controversy and other similar and ancillary aspects. The Court has further held that even in a scenario where a part cause of action has arisen within one High Court's territorial jurisdiction, that High Court can still refuse t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a larger and more interesting issue of several accused persons approaching several High Courts in a case where the cause of action could be traced to events and actions taking place in more than one State. If all the High Courts within whose territorial jurisdiction any of the acts constituting the offences have taken place and all the High Courts assume extraordinary writ jurisdiction for intervention in a criminal case registered in any one of the States, a distinct possibility of several High Courts taking inconsistent views and issuing conflicting directions may arise. Therefore, judicial discipline requires and expediency demands that only the High Court within whose territorial jurisdiction the complaint is filed or criminal case is pending entertains the petitions arising therefrom"." 32. We may also refer to and rely upon a decision of the Bombay High Court in the case of HSBC Holdings PLC vs. Deputy Commissioner of Income-tax-1 reported in [2019] 417 ITR 74 (Bombay), wherein it has been observed as under: "6. On the other hand, we notice that Calcutta High Court in case of Ispat Industries Ltd. v. Dy. CIT [2002] 123 Taxman 756/253 ITR 474 examine the question of terri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned Single Judge of Madras High Court in case of C. G. Shanmugham v. Union of India [1995] 215 ITR 2017 (Mad) considered a case where the notice for recovery of tax was issued by the Recovery Officer at Mumbai to the legal representatives of the owner of property residing in Madras. The Court held that the Madras High Court had no jurisdiction to entertain the petition. 9. It can thus be seen that the issue of the High Court where the assessee was served with a notice of reopening of the assessment getting territorial jurisdiction to entertain a petition challenging such notice, is not free from doubt. In the present case, we are not inclined to thrash out this legal issue for our final opinion. This is so because even if we accept the contention of the counsel of this Court, we are of the opinion that the Court should not exercise such jurisdiction such jurisdiction and instead allow the petitioner to file appropriate petition before the High Court which has jurisdiction over the Assessing Officer at Hyderabad. The assessee is being assessed to tax consistently at Hyderabad. The assessee has a PAN card at such place. The assessee has never applied for transfer of PAN card. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enge even if the arrests were made within the jurisdiction of such court. 12. In case of Madhya Pradesh State Mining Corpn. Ltd v. Sanjeev Bhaskar [2013] 12 SCC 326 the Supreme Court observed as under:- "23. Admittedly, the third party rights were created in the meantime in favour of the Mining Corporation pursuant to the order of Madhya Pradesh High Court dated 16th July, 1986. The order passed by the Madhya Pradesh High Court was not challenged in any appeal. The Delhi High Court also failed to notice the aforesaid fact and failed to decide the jurisdiction of the High Court to entertain the appeal against the order passed in favour of the Mining Corporation which was passed pursuant to the direction of the Madhya Pradesh High Court. In this background, it was not desirable for the Delhi High Court to entertain the writ petition. Even though the revisional order was passed by the Central Government, the Delhi High Court ought to have asked the first respondent to move before the Madhya Pradesh High Court for appropriate relief."" 33. Thus, just because a notice under Section 143(2) of the Act, 1961 came to be issued to the writ applicant at his residential address at Ahmedab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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