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Jeypore Sugar Company Ltd. Vs. Income-tax Officer, a Ward - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberWrit Petition No. 2113 of 1978
Judge
Reported in[1980]124ITR518(Mad)
ActsIncome Tax Act, 1961 - Sections 124(3); Constitution of India - Article 226 and 226(2)
AppellantJeypore Sugar Company Ltd.
Respondentincome-tax Officer, a Ward
Appellant AdvocateV. Ramachandran and ;K. Mani, Advs.
Respondent AdvocateA.N. Rangaswami and ;Nalini Chidambaram, Advs.
Cases ReferredAbdul Kafi Khan v. Union of India
Excerpt:
- .....have been made on the petitioner. it is not denied that the respondent has, what is called, the area jurisdiction over the assessee, as its factory is in chagallu which falls within the area assigned to the ito. in these circumstances, as the notice has been issued from kakinada and has been issued to a person within the jurisdiction of the ito, kakinada, and as the petitioner is borne on the file of the said ito, viz., the respondent herein, without any objection to his jurisdiction, we do not find that any part of the cause of action can be said to arise within the jurisdiction of this court. it may be mentioned here that the assessee has not taken any steps for transferring its file to madras where, it is stated, its administrative office is situate. even now the territorial.....
Judgment:

Sethuraman, J.

1. This writ petition is filed for the issue of a writ of prohibition against the ITO, A Ward, Circle I, Kakinada. The respondent issued a notice to the petitioner proposing to reopen the assessment for the assessment year 1973-74. The prayer of the petitioner is to quash the said notice for the reasons contained in the affidavit. When the case was taken up, the learned standing counsel for the Commissioner contended that this court has no jurisdiction to issue any such writ as prayed for in the present case, as no part of the cause of action arose within the jurisdiction of this court.

2. Article 226(2) of the Constitution of India provides that the power to issue a writ may 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. In para. 13 of the affidavit, it is mentioned that the proceedings initiated by the ITO by issuing the notice under Section 148 of the I.T. Act are wrong, illegal and without jurisdiction and that the entire proceedings are not tenable in law for various reasons. It is found that, in the present case, the petitioner is borne on the file of the ITO, A Ward, Circle I, Kakinada, and has been assessed for the same year in the usual course. As stated earlier, the present proceedings are only reassessment proceedings in order to bring to tax the sum which is alleged to have escaped assessment. In the assessment order, the ' name of the assessee with address ' is given as follows :

' The Jeypore Sugar Co. Ltd., Chagallu. '

3. Even in the notice that was addressed to the assessee, proposing to reopen the assessment, the notice was addressed to ' The Jeypore Sugar Company Ltd., V. V. S. Sugars, Chagallu ', and it has been served at the office of the petitioner in Chagallu.

4. The question that now arises for consideration is whether any part of the cause of action arose within the jurisdiction of this court. In this writ petition praying for the issue of a writ of prohibition, the validity of the notice issued by the ITO and the further proceedings apprehended is challenged. It is clear from the notice that the notice was issued from Kakinada and was issued to a person within the jurisdiction of the ITO, Kakinada. Section 124 of the I.T. Act defines the jurisdiction of the ITO. Subsection (1) of that section provides that the ITO shall perform their functions in respect of such areas or of such persons or classes of persons or of such incomes or classes of income or of such cases or classes of cases as the Commissioner may direct. Sub-section (3) of the same section enacts that within the limits of the area assigned to him, the ITO shall have jurisdiction in respect of any person carrying on a business or profession if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area. Only on the basis that the principal place of the assessee (the petitioner) was within the jurisdiction of the ITO, Kakinada, all along assessments have been made on the petitioner. It is not denied that the respondent has, what is called, the area jurisdiction over the assessee, as its factory is in Chagallu which falls within the area assigned to the ITO. In these circumstances, as the notice has been issued from Kakinada and has been issued to a person within the jurisdiction of the ITO, Kakinada, and as the petitioner is borne on the file of the said ITO, viz., the respondent herein, without any objection to his jurisdiction, we do not find that any part of the cause of action can be said to arise within the jurisdiction of this court. It may be mentioned here that the assessee has not taken any steps for transferring its file to Madras where, it is stated, its administrative office is situate. Even now the territorial jurisdiction of the ITO is not challenged. The fact that the respondent corresponded with persons in Madras at some point of time in order to elicit information from them does not mean that any part of the cause of action arose within the jurisdiction of this court. The cause of action in the present case arises out of the issue of the notice which was issued from Kakinada and served on the assessee in Chagallu. No part of the cause of action arose in Madras. The location of the administrative office in Madras is irrelevant to the question of jurisdiction.

5. The question whether, in similar circumstances, the cause of action can be said to arise within the jurisdiction of the High Court has been considered in two decisions, one of the Allahabad High Court and another of the Calcutta High Court. In Purtabpore Co. Ltd. v. Cane Commissioner, Bihar, : AIR1969All105 , the Cane Commissioner, Bihar at Patna, passed two orders. By his first order, he superseded his earlier order passed under Clause 6(1)(a) of the Sugareane (Control) Order, 1966; in favour of the writ petitioner's sugar factory situate in U.P. and also reduced the number of villages (all situate in Bihar), constituting the reserved area of the factory for the purchase of sugarcane. This order was communicated to the petitioner's factory in U.P. By his second order, which was not communicated to the petitioner, he directed that the villages excluded from the petitioner's reserved area should be allotted to another sugarcane factory in Bihar. It is at this stage the writ petition came to be filed in the Allahabad High Court. The learned single judge of the High Court held that as no part of the cause of action for the reliefs claimed arose within the territories of U.P., the High Court could not entertain the writ petition.

6. Similarly, in Abdul Kafi Khan v. Union of India, : AIR1979Cal354 , disciplinary proceedings were taken against a railway servant by the authorities in Bihar. A show-cause notice against removal from service was also issued by the authority in Bihar. The writ petitioner challenged those orders by iiling a writ petition in the Calcutta High Court. It was held that the Calcutta High Court had no jurisdiction to entertain the petition merely because the head office of the Railway was located in Calcutta when not even a part of the cause of action arose within its territorial jurisdiction. These two decisions have taken the same view as we have expressed above.

7. In these circumstances, we dismiss the writ petition as not entertain-able by this court. There will be no order as to costs.


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