AI Drafter 
TaxTMI 
TaxTMI 
2016 (10) TMI 773
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....etitioner, which is under the Board for Industrial and Financial Reconstruction (BIFR), as per the provisions of the Sick Industrial Companies Act, 1985 (SICA), by invoking the provisions of the Income Tax Act, 1961, pursuant to a proceeding dated 20.01.2016 issued by the respondent. 3. Proceedings dated 20.01.2016 of the Assistant Commissioner of Income Tax, New Delhi reads as follows: " To The Principal Officer, M/s.Tecpro System Ltd., 202-204, Pacific Square Mall JMD Campus Sector-15, Gurgaon Sub:- Assessee deemed to be an assessee in default u/s 201 of the Income Tax Act, 1961- reg. Please refer the above In this regard, it has been observed that during the course of survey operation u/s 133A of the Income Tax Act, 1961 on 20.01.2016 in your case at the above mentioned premises, you have deducted TDS amount of Rs. 17,43,74,191/- for the F.Y.2013-14, F.Y.2014-15 and F.Y.2015-16, which has not been deposited into the Govt A/c till date. In view of the same, you are hereby held as an assessee deemed to be in default u/s 201 of the Income Tax Act, 1961. T....
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....or the respondent submitted that no record is available in Chennai office and all the records are only in New Delhi office. The learned senior counsel appearing for the petitioner submitted that the petitioner is an assessee only in the New Delhi office and not at Chennai. The petitioner also submitted their Income Tax Returns only at New Delhi office and not at Chennai office. Merely because the petitioner is having an office at Chennai the same will not confer territorial jurisdiction to this Court to entertain the writ petition. That apart, deducting TDS by the petitioner at Chennai will not confer territorial jurisdiction at Chennai. When the petitioner is an assessee in the office of the Income Tax Department at New Delhi, only the Courts at New Delhi shall have jurisdiction. The ratio laid down in the judgment of the Honourable Supreme Court reported in 2002 (1) SCC 567 [Union of India and others v. Adani Exports Ltd. and another] is against the contentions raised by the petitioner in respect of territorial jurisdiction. 6. As per Article 226(2) of the Constitution of India the power conferred by clause (1) to issue directions, orders or writs to any Government....
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.... counsel appearing for the petitioner are not applicable to the petitioner's case. Since the writ petition is being decided on the question of territorial jurisdiction, I am not going into the merits of the case. In these circumstances, the writ petition filed by the petitioner is rejected on the ground of territorial jurisdiction. No costs. Consequently, connected miscellaneous petition is closed." 7. Assailing the correctness of the order and inviting the attention of this court to the proceedings of the Registrar, Board for Industrial and Financial Reconstruction dated 14.07.2014, learned counsel for the petitioner/appellant submitted that a case has been registered under Section 15(1) of the Sick Industrial Companies (Provisions) Act, 1985, the petitioner/appellant has a legal right to claim protection under the provisions of the said Act. Placing reliance on the decision of the Hon'ble Supreme Court in Raheja Universal Limited v. NRC Limited and others reported in (2012) 4 SCC 148, learned counsel for the petitioner/appellant submitted that when BIFR proceedings are pending, coercive action taken by the respondent vide order dated 20.01.2016 would amount to infringe....
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....ourt to the additional affidavit filed by writ petitioner wherein, the petitioner has stated that the company has been functioning in Chennai since 2002 onwards and established a full-fledged Corporate office at Siruseri IT Park, where 70% of the permanent employees are working. He has also stated that 90% of the payments are processed only at Chennai, as a result of which, books of accounts are maintained at Chennai. TDS deduction is also made at Chennai. Therefore, a strong nexus has been established between Chennai office and the lis relating to the subject matter in the notice dated 20.01.2016 of alleged non-deposit of TDS amount of Rs. 17,30,74,191/- for the assessment years 2013-14, 2014-15 and 2015-16 respectively. 11. It is also his contention that though the High Court of Delhi has jurisdiction to maintain a writ petition, it cannot be contended that the court at Madras has no jurisdiction for the reason that the infringement of right may take place or threat thereof. Considering the fact that entire records and assets are within the jurisdiction of this court, a writ is maintainable and according to him, while dealing with the maintainability of writ petitions, courts ....
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.... this court and prayed for dismissal of the writ appeal. 15. Heard the learned counsel for the parties and perused the materials on record. 16. Fact that the writ petitioner M/s.Tecpro System Limited, 202-204, Pacific Square Mall, JMD Campus, Sector-15, Gurgaon, has been issued with Tan number at Delhi viz.TANDELT03519F has not been disputed. Survey operation under Section 133-A of the Income Tax Act, 1961 has been conducted on 20.01.2016 at No.202-204, Pacific Square Mall, JMD Campus, Sector-15, Gurgaon, and the same has also not been disputed. Proceedings of the Assistant Commissioner, Income Tax, New Delhi dated 20.01.2016 reads as follows: " To The Principal Officer, M/s.Tecpro System Ltd., 202-204, Pacific Square Mall JMD Campus Sector-15, Gurgaon Sub:- Assessee deemed to be an assessee in default u/s 201 of the Income Tax Act, 1961- reg. Please refer the above In this regard, it has been observed that during the course of survey operation u/s 133A of the Income Tax Act, 1961 on 20.01.2016 in your case at the above mentioned premises, you have deduct....
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....d to you and the left out documents if any shall be sent to you shortly. As regards the payment plan against TDS liability, we would like to bring your kind notice that considering the present financial situation being faced by the company, we are not in a position to remit the money immediately, as we are not getting any payment from the customers. However, we will be giving the cheque of Rs. 25.00 lacs which may please be withheld for 3/4 days and by tis time we shall be sending the amount by RTGS and shall take back the cheque of Rs. 25.00 lacs. As regards the balance payment plan, it may kindly be noted that considering the present cash flow problem faced by the company, the proposal for balance payment needs to be discussed with all respective departments/customers and shall revert back to you in 10/15 days. Alternatively, we shall also propose certain customers from where we have to get major payment and the liability against TDS amount may please be collected from our customers directly on our behalf. As this issue needs to be discussed with our Project/Tech. Deptt., we request you to kindly bear with us and we shall resolve the pending liability a....
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.... that High Court at Ahmedabad had no jurisdiction to entertain special civil applications, as no part of cause of action arose within the territorial jurisdiction of High Court at Ahmedabad. On the facts and circumstances, the High Court observed that the respondents therein carried on business of export and import from Ahmedabad. Orders for export and import placed from an executor from Ahmedabad. The documents and paymens for export and import were sent/made at Ahmedabad. The credit of duty claimed in respect of exports were received at Ahmedabad and payments were also received at Ahmedabad. Non-granting and denial of utilisation of the credit in the passbook would affect the business of the petitioners at Ahmedabad, respondents 1 to 3 in the civil applications have Regional offices at Ahmedabad, substantial cause of action has arisen within the jurisdiction of the said court. The objection of Union of India/appellant before the Apex court was that passport licence was issued at Chennai, the designated authority was at Chennai, the transaction concerned was made from Chennai port and therefore the cause of action arose at Chennai. On the above facts and circumstances, the Hon'....
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....on unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which 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 facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad." 20. In Kusum Ingots & Alloys Ltd. vs. Union of India and Another reported in (2004) 6 SCC 254, the appellant company was registered under the Companies Act with the Registered office at Mumbai. It obtained a loan from Bhopal branch of State Bank of India. The bank issued notice for repayment. Questioning the vires of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, a writ petition was filed, which was dismissed on the ground of lack of jurisdiction. At paragraph 18, the Apex Court held as follows: "18. The facts pleaded in the writ pet....
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....poration at Mumbai. Appellant therein has approached Patna High Court under Article 226 of the Constitution of India and claimed various benefits including 100% disability compensation. Maintainability of the writ petition was one of the objections raised by the respondent, on the ground that no cause of action or even a fraction of cause of action arose within the jurisdiction of the Patna High Court. The appellant before the Hon'ble Apex Court contended that he discharged his duty outside the territory of State of Bihar. One of the facts pleaded by the appellant before the Apex Court was that he was a permanent resident of Bihar, asserted his rights in the State of Bihar and all the communications with respect to rejection of his claims were made at his residential address in the State of Bihar. Thus on the above facts and circumstances and taking note of the insertion in clause 1A to Article 226 of the Constitution of India (XV Amendment Act 1963) and subsequently renumbered as Clause 2 by the Constitution (XLII Amendment Act, 1976), the Hon'ble Apex court has observed as hereunder: On a plain reading of the amended provisions in Clause (2), it is clear that now....
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....to the assets of the company. In the above case, the Apex court held that the claim for recovery of money, could lie or be proceeded with only after express consent of the BIFR. There cannot be quarrel over the said position of law. But the question to be decided is whether a writ would lie, within the jurisdiction of this court. 24. According to the learned counsel for the petitioner, recourse that the learned Single Judge ought to have considered is whether the petitioner has a right to adjudicate his case before BIFR and in the light of the dictum in Raheja Universal Ltds case, the revenue demand could be allowed pending BIFR and in such circumstances, if coercive steps are taken the assessee's right is likely to be infringed and therefore, when attention of BIFR proceedings was brought to the notice, the writ court ought to have entertained the writ petition, as the properties/assets are in Chennai and thus a part of cause of action has arisen within the jurisdiction of this court. It is the submission of the learned counsel that when there is a threat of infringement of a right, and to that extent facts are pleaded in the petition, as to how cause of action has aris....
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....t paragraphs 9 and 10, the Hon'ble Apex Court held as follows: 9. The first question that arises for consideration is whether the Andhra Pradesh High Court was justified in holding that as the seizure took place at Chennai (Tamil Nadu), the appellant could not maintain the writ petition before it. The High Court did not examine whether any part of cause of action arose in Andhra Pradesh. Clause (2) of Article 226 makes it clear that the High Court exercising jurisdiction in relation to the territories within which the cause of action arises wholly or in part, will have jurisdiction. This would mean that even if a small fraction of the cause of action (that bundle of facts which gives a petitioner, a right to sue) accrued within the territories of Andhra Pradesh, the High Court of that State will have jurisdiction. 10. In this case, the genesis for the entire episode of search, seizure and detention was the action of the security/intelligence officials at Hyderabad Airport (in Andhra Pradesh) who having inspected the cash carried by him, altered their counterparts at Chennai Airport that the appellant was carrying a huge sum of money, and required to be intercepted....
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....he decision of the Hon'ble Supreme Court in State of Rajasthan vs. Swaika Properties reported in AIR 1985 SC 1289, U.P.Rashtriya Chini Mill Adhikari Parishad vs. State of U.P. reported in (1995) 4 SCC 738, the Hon'ble Division Bench of the Delhi High Court held that so far as the impugned order of the IT Authority situate within the State of Haryana is concerned, no cause of action has arisen to the petitioner, within the territorial jurisdiction of the High Court of Delhi. Thus the writ petition filed was dismissed. 29. In the case on hand, though the petitioner has contended that the right under BIFR is likely to be infringed and that there is a threat if the respondent is not restrained by a writ of mandamus sought for, this court is not inclined to accept the said contentions for the reason that what is sought to be achieved indirectly is to nullify the effect of the order dated 20.01.2016 of the Assistant Commissioner of Income Tax, TDS, New Delhi, without there being any challenge to the same. It is well settled that what cannot be done directly, cannot be done indirectly, or permitted to be done. Averments made, are nothing but challenge to the proceedings of the ....
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....der: "(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 Governments, 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 32. Reading of Sub-Article (1) of Article 226 indicates that every High Court has the power throughout the territories in relation to which it exercise jurisdiction namely, to issue any person or authority, including in appropriate c....
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....ng him the actual injury or threat thereof, but on the facts and circumstances of the case, the issue to be considered, is whether, the petitioner/appellant has established a legal right or there is any cause or any material, to substantiate that such right has been infringed or a threat thereof, within the territorial jurisdiction of this Court. 35. Cause of action for filing the present writ petition, for a Mandamus, directing the Assistant Commissioner of Income Tax, New Delhi, respondent herein, not to take any coercive or any other steps against the appellant, which is under the Board for Industrial and Financial Reconstruction (BIFR), as per the provisions of the Sick Industrial Companies Act, 1985 (SICA), by invoking the provisions of the Income Tax Act, 1961, pursuant to a proceeding, dated 20.01.2016, issued by the respondent, arises out of a survey operation, under Section 133A of the Income Tax Act, 1961, on 20.01.2016, conducted at the principal office, at Delhi and consequentially, the appellant has been informed to pay TDS deducted, failing which, recovery proceedings would be initiated by the competent authority at New Delhi. The petitioner/appellant may have a ri....