Cwp/19055/2015 Of M/S Asian Con Solidated Industries Ltd v. Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH CWP No.1905S5 of 2015|Date of decision: 5.10.2015 M/s Asian Consolidated Industries Limited cece Petition Assistant Commissioner of Income Tax, Central Circle 12, New Delhi. ....mesponden CORAM: HON BLE MR. JUSTICK AJAY KUMAR MITTALHON BLE MR. JUSTICEK RAMENDRA JAIN 1. Whether Reporters of local papers may be allowed to see the judgment?2. To be referred to the Reporters or not?3. Whether the judgment should be reported 1n the Digest? Present: Mr. Anand Chhibbar, Sr. Advocate with Ms. Riya Bansal,Advocate for the petitioner. | Ajay Kumar Mittal, J. inThis order shall dispose of CWP Nos.19007 and 19055 of 2015as according to the learned counsel for the petitioner, the issue involved inboth the petitions is identical. However, the facts are being extracted fromCWP No.19055 of 2015. ) -In CWP No.19055 of 2015, the petitioner prays for quashingthe order dated 9.2.2015, Annexure P. | passed by the Income Tax Appellate CWP No. 19055 of 201 Tribunal, Delhi Bench ‘Friday’, New Delhi whereby application forrestoration of the appeal 1.e. ITA No.428/Del/1997 filed by it against theorder dated 26.9.2002 passed by the respondent has been dismissed.3]A few facts relevant for the decision of the controversy,involved as narrated in CWP No.19055 of 2015 may be noticed. Thepetitioner company was ordered to be wound up by this court vide orderdated 7.1.1999, Annexure P.2 in CP No.8 of 1998. The control of thepetitioner company came in the hands of the Official Liquidator. The ex-management of the petitioner company filed revival petition of the company1e. CP No.6 of 2013 betore this court under Sections 391/394 of theCompanies Act, 1956 (in short, “the Companies Act’) stating that thepetitioner company may again carry out its business operations if certainconcessions were allowed/granted by the Court. The ex-management of thepetitioner company entered into a One Time Settlement (OTS) with itsvarious secured and unsecured creditors. The said revival petition wasconsidered by the court and notices were issued to the various parties. Videorder dated 12.5.2014, Annexure P.4, the said revival petition was allowed,Prior to the filing of the revival petition on 21.1.2013, the respondent hadfiled CA No.222 of 2012 before this court on 18.4.2012, Annexure P.5 in theliquidation process of the petitioner company for claiming its allegedoutstanding of -135 crores from the petitioner company on the basis ofvarious ex parte orders/judgments being passed prior and after theliquidation of the petitioner company. The ex management of the petitionercompany claimed that proper opportunity should be given to the petitionercompany to assail the various orders/judgments passed by the respondent CWP No. 19055 of 201 CWP No. 19055 of 201 against it prior or after the liquidation of the company. Vide order dated8.5.2013, Annexure P.6, this Court in CA No.222 of 2012 by referring thesaid revival petition 1.e. CP No.6 of 2013 had passed the necessarydirections with respect to the outstanding demand of the respondent. TheCourt gave liberty to the petitioner to approach the income tax department1.e. Chairman CBDT for settlement of the claim. Since the details in CANo.222 of 2012 filed by the respondent were vague, the ex-management ofthe petitioner company moved an application 1.e. CA No.393 of 2013 beforethis Court in August 2013, Annexure P.7 1n the said liquidation petition forseeking the details of the orders/judgments and documents relating to thealleged claim of the respondent against the company. Vide order dated28.1.2014, Annexure P.8, the court passed directions to the respondent toprovide necessary documents to the ex-management of the petitionercompany with respect to the claim of the respondent. The court also gaveliberty to the ex-management of the petitioner company to challenge theorders being passed by the respondent prior to liquidation. It was alsoobserved that since the petitioner company was in winding up and theofficial liquidator was involved in large number of cases, the respondentwill take sympathetic view in condoning the delay in filing the appeal. On29.4.2014, Annexure P.9, when the matter again came up before the court, itwas recorded that the income tax issues between the department and thepetitioner will remain subject to appeals which had been filed by thepetitioner to challenge various orders passed by the respondent with respectto their demand. On 12.5.2014, Annexure P.10, the court finally issuedorders for revival of the petitioner company and allowed the said petition filed by the petitioner and took it out of the liquidation process. It was alsoreiterated that any tax dues of the company in liquidation on revival willremain the liability of the company subject to appeals and the interim ordersregarding tax passed on 29.4.2014 would continue to operate. Thereafter,the petitioner has already instituted various proceedings before the Incometax department to set aside the demand of the respondent for=a1345 croresThe outstanding demand has now come down to around=a10 crores. Thepetitioner has also filed status report of the outstanding amount in CANo.365 of 2014 in CP No.6 of 2013. According to the petitioner, the presentimpugned order dated 9.2.2015 was concerned with the ex parte order dated26.9.2002, Annexure P.12 passed by the Tribunal in ITA No.438/Del/1997filed by the petitioner. The said appeal had been dismissed in default asnobody had appeared on behalf of the petitioner company on the dates of itshearing on 26.9.2002. Hence the instant writ petitions. 4 We have heard learned counsel for the petitioner. 4 In the present case, Assistant Commissioner of Income TaxCentral Circle 12, New Delhi 1s the Assessing Officer. During the course ofhearing on 9.9.2015, in CWP No.19007 of 2015, learned counsel for thepetitioner was directed to show as to how this court has jurisdiction toentertain the present writ petition. Learned counsel for the petitionersubmitted that earlier also, the writ petitions (CWP Nos.6383, 6382, 6398and 6397 of 2015, Ms Asian consolidated Industries Limited vs, Assistant Commissioner ofIncome Tax, New Delhi and another)were filed by the petitioner for another assessment year and this Court had entertained thesame and passed order dated 30.7.2015, Annexure P.14 disposing of the 5 4 We have heard learned counsel for the petitioner. 4 In the present case, Assistant Commissioner of Income TaxCentral Circle 12, New Delhi 1s the Assessing Officer. During the course ofhearing on 9.9.2015, in CWP No.19007 of 2015, learned counsel for thepetitioner was directed to show as to how this court has jurisdiction toentertain the present writ petition. Learned counsel for the petitionersubmitted that earlier also, the writ petitions (CWP Nos.6383, 6382, 6398and 6397 of 2015, Ms Asian consolidated Industries Limited vs, Assistant Commissioner ofIncome Tax, New Delhi and another)were filed by the petitioner for another assessment year and this Court had entertained thesame and passed order dated 30.7.2015, Annexure P.14 disposing of the 5 petitions as infructuous. Referring to Article 226(2) of the Constitution ofIndia, it was urged that the cause of action had arisen within the territorialJurisdiction of this court and therefore, in view of judgment of the ApexCourt inM/s Kusum Ingots and Alloys Limited vs. Union ofIndia (UODand another,AIR 2004 SC 2321, the present writ petition was maintainablein this court. To establish that cause of action had arisen, reference wasmade to various orders passed by the Company Court 1n the case of thepetitioner by the Company Judge of this Court under the Companies Acct.6]Examining the judgment relied upon by the learned counsel forthe assessee-petitioner inM/s Kusum Ingots'scase (supra), the questiontherein was whether the seat of the Parliament or the Legislature of a Statewould be a relevant factor for determining the territorial Jurisdiction of aHigh Court to entertain a writ petition under Article 226 of the Constitutionof India. It was observed therein that even 1f a small part of cause of actionarises within the territorial jurisdiction of the High Court, the same by itselfmay not be considered to be a determinative factor compelling the HighCourt to decide the matter on merit. In appropriate cases, the court mayrefuse to exercise its discretionary Jurisdiction by invoking the doctrine offorum convenience. The proposition of law enunciated in M/s KkusuIngots'scase (Supra) 1s unexceptionable but has no applicability to the factsin hand. JoSupport was also drawn from the order of this Court passed inM/s Asian Consolidated Industries Limited'scase (supra). However, thatwas a case qua dismissal of the appeal against the penalty proceedings onthe ground of delay. In that case, the grievance of the petitioner stood redressed 1n view of the fact that the quantum proceedings had been decidedin favour of the petitioner. As a result, the penalty proceedings did notsurvive. The order passed therein reads thus:- “The petitioner has challenged the order(s) of the Income TaxAppellate Tribunal dismissing its appeal(s) against the penaltyproceedings on the ground of delay, ?)In effect, therefore, the petitioner's grievance is withrespect to the penalty proceedings. The grievance standsredressed in any event in view of the fact that the quantumproceedings have been decided in favour of _ tpetitioner/assessee. There 1s no question, therefore, of thepenalty proceedings under Section 271 of the Income Tax Act,1961 surviving. 3. The writ petitions are accordingly disposed of with theclarification that the petitioner's grievance stands redressed andthe penalty proceedings do not survive. In view thereof, nofurther orders are necessary 1n these writ petitions. A The objection to these petitions on the ground of delay 1stherefore, not sustainable.” In the above mentioned writ petitions, the question ofjurisdiction was not 1nissue and moreover, the writ petitions were disposed of with the clarificationthat since the petitioner's grievance stood redressed and the penaltyproceedings did not survive, no further orders were necessary in the saidwrit petitions. In such circumstances, the assessee cannot derive advantagefrom the order dated 30.7.2015, Annexure P.14 or from the judgment of the 3. The writ petitions are accordingly disposed of with theclarification that the petitioner's grievance stands redressed andthe penalty proceedings do not survive. In view thereof, nofurther orders are necessary 1n these writ petitions. A The objection to these petitions on the ground of delay 1stherefore, not sustainable.” In the above mentioned writ petitions, the question ofjurisdiction was not 1nissue and moreover, the writ petitions were disposed of with the clarificationthat since the petitioner's grievance stood redressed and the penaltyproceedings did not survive, no further orders were necessary in the saidwrit petitions. In such circumstances, the assessee cannot derive advantagefrom the order dated 30.7.2015, Annexure P.14 or from the judgment of the Apex Court 1n Kusum Ingots and Alloys Limited'scase (supra) being onditterent situation. 8.InITA No.44 of 2005titled as The Commissioner of [Incom Tax, Faridabad Vs. M/s Motorola India Ltd. decided on 03.10.2007, CWP No. 19055 of 201 where the assessment was framed by the Assessing Officer at Bangalore, theRevenue in that case, had sought to justify the filing of the appeal in thisCourt on the ground that the assessee respondent had requested for transferof the case trom Bangalore to Gurgaon on 02.01.2002 and the case wastransferred from Bangalore to Gurgaon on 20.05.2005 under Section 127 ofthe Act. The Division Bench of this Court, while repelling the aforesaidcontention had noticed as under: “The decision of the High Courts are binding on thesubordinate Courts and authorities or Tribunals under titsuperintendence throughout the territory 1n relation to which itexercises jurisdiction but it does not extend beyond itsterritorial jurisdiction. In other words, the decision of one HighCourt 1s not a binding precedent for another High Court or forCourts or Tribunals outside its territorial jurisdiction. Thedoctrine of precedents and rule of binding efficacy of law laiddown by the High Court within its territorial jurisdiction, thequestions of law arising out of decision in a reference, has to bedetermined by the High Court which exercises territorialJurisdiction over the situs of the Assessing Officer and 1f 1t wasotherwise then it would result in serious anomalies as anassessee affected by an assessment order at Bombay mayinvoke the jurisdiction of Delhi High Court to take advantageof a suitable decision taken by it. Thus, such an assessee mayavoid application of inconvenient law laid down by thejurisdictional High Court of Bombay. On the basis of theaforementioned reasoning, the Division Bench sustained theobjection that the jurisdiction to entertain the application undersub-section (1) and (2) of Section 256 of the Act vested 1n theHigh Court of Bombay and not of Delhi. We are in respectfulagreement with the aforementioned reasoning of the DelhiHigh Court. Accordingly, we hold that the preliminaryobjection raised by learned counsel for the assessee-respondent 1S sustainable. AAAA AAAA AXAK A conjoint reading of the aforementioned provisions makes itevident that the Director General or Chief Commissioner orCommissioner 1s empowered to transfer any case from one ormore Assessing Officers subordinate to him to any otherAssessing Officer. It also deals with the procedure when thecase 1s transferred from one Assessing Officer subordinate to aDirector General or Chief Commissioner or Commissioner toan Assessing Officer who is not subordinate to the sameDirector General, Chief Commissioner or Commissioner. Theaforementioned situation and the definition of expression ‘case’in relation to jurisdiction of an Assessing Officer 1s quiteunderstandable but it has got nothing to do with the territorialJurisdiction of the Tribunal or High Courts merely becauseSection 127 of the Act dealing with transfer has beenIncorporated in the same chapter. Therefore, the argumentraised 1s completely devoid of substance and we have nohesitation to reject the same. In view of the above, the appeal is dismissed by sustaining thepreliminary objection that this Court has no_ territoriaJurisdiction over an order passed by the Assessing Officer atBangalore. Accordingly, these appeals are returned to therevenue appellant for their filing before the competent court ofJurisdiction in accordance with law.” Similar order was passed by this Court in ITA No.49 of 2012 3Commissioner of Income Tax (Central) Gurgaon vs. M/s ParabolicDrugs Limited},decided on 11.10.2012. Q In view of the above, the writ petitions are dismissed byholding that this court has no territorial jurisdiction to adjudicate upon the CWP No. 19055 of 201 ofjurisdiction 1n accordance with law. October 05, 2015;9"; (Ajay Kumar Mittal)Judge|(Ramendra Jain)Judge