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IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION No. 950 OF 2020 Teleperformance Global Services)Private Limited, Plot CST No. 1406-A/28)Teleperformance Towers Mindspace,)Goregaon (West), Mumbai 400 104,)Maharashtra, India…Petitioner Vs. *** Mr. Jehangir D. Mistri, Sr. Counsel a/w Madhur Agarwal and Atul Jasani, for the Petitioner. Mr. Sham Walve, for the Respondents. *** 1 / 18 CORAM : SUNIL P. DESHMUKH, & J. ABHAY AHUJA, JJ. RESERVED FOR JUDGMENT : MARCH 17, 2021JUDGMENT PRONOUNCED ON : APRIL 9, 2021 JUDGMENT [PER : SUNIL P. DESHMUKH, J.] 1.Rule. Rule made returnable forthwith. Heard learnedSenior Advocate Mr. J. D Mistri for the petitioner and Mr. Sham Walveadvocate for respondent-State finally by consent. 2.The petition questions propriety, legality and validity ofnotice dated 30[th] March, 2019 issued by respondent No. 1 - theAssistant Commissioner of Income Tax, Delhi pursuant to section 148of the Income Tax Act, 1961 (for short “the Act”) for the assessmentyear 2012-13; and order dated 31[st] December, 2019 passed undersection 144 read with section 147 of the Act in the name of M/s.TecnovateEsolutions Private Limited. 3.Mr. J. D. Mistri, learned senior advocate for the petitionerdraws our attention to the factual events that, M/s. TecnovateEsolutions Pvt. Ltd. (for short “TSPL”) was a registered companyengaged in business of providing back office support services/ remotedata entry services for customers in and outside India. Under orderdated 11[th] February, 2011, a scheme of amalgamation of aforesaidcompany with M/s. Intelnet Global Services Pvt. Ltd. , was approved 2 / 18 WP. 950-2020 with effect from 1[st] April, 2010 and since then the aforesaid TSPLceased to exist. Subsequently, M/s. Intelenet Global Services Pvt. Ltd.amalgamated with M/s. Serco BPO Pvt. Ltd. Thereafter there had beenchange in the name with effect from 11[th] January, 2016 from M/s.Serco BPO Pvt. Ltd to M/s. Intelnet Global Services Pvt. Ltd. Therehad been a further change in the name from M/s. Intelenet GlobalServices Pvt. Ltd to Teleperformance Global Services Pvt. Ltd.(TGSPL) with effect from 12[th] February, 2019. He submits that assuch, petitioner is successor of M/s. TecnovateEsolutions Pvt. Ltd. 4.It has been referred to that post amalgamation, forassessment year 2012-13 M/s. Intelenet Global Services Pvt. Ltd. filedits income tax returns on 30[th] November, 2012 and revised its return on31[st] March, 2014 for the period 1[st] April, 2011 to 6[th] July, 2011. Itsassessment was completed under ection 143(3) of the Act vide orderdated 23[rd] September, 2016. M/s. Intelenet Global Services Pvt. Ltd.had filed returns for the period from 7.07.2011 to 31.03.2012 on 30[th]November, 2012 and revised returns on 31[st] March, 2014. Itsassessment had been completed under Section 143(3) of the Act underorder 31[st] January, 2017. 5.Notice dated 30[th] March, 2019 under section 148 of the 3 / 18 WP. 950-2020 Act for the assessment year 2012-13 in the name of TSPL had beenissued by respondent No. 1 directing to file return of income withinthirty days stating there is reason to believe that income chargeable totax had escaped assessment,, without realising that said company wasa non existing entity. 5.Notice dated 30[th] March, 2019 under section 148 of the 3 / 18 WP. 950-2020 Act for the assessment year 2012-13 in the name of TSPL had beenissued by respondent No. 1 directing to file return of income withinthirty days stating there is reason to believe that income chargeable totax had escaped assessment,, without realising that said company wasa non existing entity. 6.He submits, petitioner became aware of aforesaid noticebased on telephonic conversation of respondent No. 1 with anemployee of petitioner in second week of September, 2019. Petitionerhad filed a letter dated 18[th] September, 2019 stating that TSPL hasbeen amalgamated with effect from 1[st] April, 2010 and since then saidcompany has ceased to exist, and as such, there is no question of filingreturns of income for assessment year 2012-13 by said company. Thethen company M/s. Intelenet Global Services pvt. Ld. had duly filedreturns of income for all the subsequent assessment years, and had assuch submitted that the notice had been issued on misconception andappears to be an inadvertent error. In ensued telephonic conversationwith respondent No. 1, the petitioner was advised to file onlineresponse. While attempts had been unsuccessful and portal was notletting petitioner to upload any document including reply, reply hadbeen submitted via email on 29[th] November, 2019, enclosing a separateletter of even date. Petitioner had submitted that even after merger, 4 / 18 some times the payers make payment to the petitioner, however,erroneously, continue to mention the PAN of erstwhile company andaccordingly said deduction is reflected in the 26 AS of erstwhilecompany and not petitioner company, and petitioner in its returnconsidered all such payments and claimed all such deduction. As such,there is no question of escaping assessment for the assessment year2012-13. 7. It is contended that without considering the reply or evenreferring to the telephonic conservation of petitioner with respondentNo. 1, assessment order dated 31[st] December, 2019 for the assessmentyear 2012-13, under section 144 read with section 147 of the Act, inthe name of TSPL computing total income at Rs. 14,50, 95,452/- waspassed. It has been referred to that respondent No. 1 purports to allegethat petitioner had neither filed response to the show-cause notice norfiled returns of income for relevant assessment year. As per 26ASstatement, taxes have been deducted with respect to transactionsamounting to Rs. 14.51 Crores, hence, the same is treated as taxableunder the provisions of the Act. 8.Petitioner on realising that assessment order dated 31[st]December, 2019 had been passed against M/s. TecnovateEsolutions 5 / 18 WP. 950-2020 Pvt. Ltd., the petitioner is constrained to file writ petition, challengingnotice dated 30[th] March, 2019 and assessment order dated 31[st]December, 2019. 8.Petitioner on realising that assessment order dated 31[st]December, 2019 had been passed against M/s. TecnovateEsolutions 5 / 18 WP. 950-2020 Pvt. Ltd., the petitioner is constrained to file writ petition, challengingnotice dated 30[th] March, 2019 and assessment order dated 31[st]December, 2019. 9.Mr. Mistri, learned senior counsel submits that while thefacts are indisputable, impugned notice dated 30[th] March, 2019 andimpugned order dated 31[st] December, 2019 for assessment year 2012-13 in the name of M/s. Tecnovate Esolutions Pvt. Ltd. are clearlywithout jurisdiction. He submits that having ragard to theamalgamations with effect from 1[st] April, 2010 onwards petitioner isthe only company in existence and subsequent to period of the merger,any proceedings could be initiated only by officer having jurisdictionover the petitioner i.e. respondent No. 3 and not respondent No. 1.Impugned notice issued for the period viz. assessment year 2012-13after the amalgamation is clearly outside the scope of jurisdiction ofrespondent No. 1. He refers to the letters dated 18[th] September, 2019and 29[th] November, 2019 as well as e-mails dated 16[th] October, 2019.He submits that despite aforesaid, the decision purports to considerthat impugned notice has not been responded to. He submits that thereis not even a whisper about the objection by petitioner to the noticeand the proceedings. He submits that no assessment or re-assessmentproceedings can be initiated against a person not in existence during 6 / 18 WP. 950-2020 the relevant period. Thus the impugned notice and impugned order areabsolutely without jurisdiction. He submits that it has been ignoredthat M/s. Tecnovate Esolutions Pvt. Ltd. had not been in existencewith effect from 1.4.2010 for the financial year 2011-12. He submitsthat M/s. Intelenet Global Services Pvt. Ltd. had already filed returnsof income for the assessment year 2012-13 and assessment completedunder Section 143(3) of the Act. In the circumstance, there is noquestion of assessment being reopened or the assessment order beingpassed in the name of erstwhile company. 10.He submits, petitioner was not afforded any opportunityof hearing. Notice dated 4[th] December, 2019 was not served on thepetitioner, even the same was not uploaded on the e-portal. Theimpugned notice and the impugned order of assessment are in breachof principles of natural justice. He thereafter, urges to allow thepetition, quashing and setting aside impugned notice date 30[th] Marchand the impugned order dated 31[st] December, 2019. 11.Respondent No. 4 has submitted its reply. The petition isresisted contending that notice dated 30[th] March, 2019 and assessmentorder dated 31[st] December, 2019 for assessment year 2012-13 are legaland sustainable as per the provisions of the Act. It is contended that 7 / 18 WP. 950-2020 petitioner as successor entity had been responsible to reply the noticesincluding show-cause notice issued on 4[th] December, 2019 throughITBA system of the department and the notices and orders weredispatched to the concerned assessee on its email id which is registeredwith the department for receiving such communications. It had beenrealized that the PAN of the entity TSPL had been apparently active inthe database of the department. It is being referred to that petitionerhas appellate forum to approach against the order passed. It is furtherbeing referred to that jurisdiction over the company TSPL is with theCircle 25(1), Delhi. Thus, it is contended that petitioner is not entitledto any of the relief claimed, as such, petition is liable to be dismissed. 12.Learned counsel Mr. Walve for respondents vehementlysubmits that jurisdictional issue would arise in the petition since theorder has been passed by the authority at Delhi. Learned counsel Mr. Walve for respondents vehemently 13.Mr. J. D. Mistri, learned senior advocate lays particularemphasis on clause (2) of Article 226 of India, which reads as under: 12.Learned counsel Mr. Walve for respondents vehementlysubmits that jurisdictional issue would arise in the petition since theorder has been passed by the authority at Delhi. Learned counsel Mr. Walve for respondents vehemently 13.Mr. J. D. Mistri, learned senior advocate lays particularemphasis on clause (2) of Article 226 of India, which reads as under: “(2) The power conferred by Clause (1) to issuedirections, orders or writs to any Government,authority or person may also be exercised by any HighCourt exercising jurisdiction in relation to theterritories within which the cause of action, wholly or 8 / 18 in part, arises for the exercise of such power,notwithstanding that the seat of such Government orauthority or the residence of such person is not withinthose territories.” 14.He submits that there are lot of decisions throwing lighton territorial jurisdiction of courts. He refers to the case of KusumIngots and Alloys Ltd. Vs. Union of India (UOI) and Anr.[1]whereinSupreme Court considered that even if a small fraction of cause ofaction accrues within the territorial jurisdiction of a court, the court iscompetent to entertain writ petition by virtue of clause (2) of Article226 of the Constitution of India. It has been observed that if passing ofa parliamentary legislation gives rise to civil or evil consequences, acause for writ petition questioning constitutionality thereof arises andcan be filed in any high court. It is not so, a cause of action arisesonly when the provisions of the Act or some of them are implementedwould give rise to civil or evil consequences to the petitioner. The seatof the Parliament or a State Legislature would not be relevant factorfor determining territorial jurisdiction of a high court to entertain apetition. It has been held in the same that the material facts which areimperative for the suitor to allege and prove constitutes the cause ofaction. 1AIR 2004 SC 2321 9 / 18 15.It has also been referred to in said decision, paragraph 24thereof in using the terms ‘cause of action’, it has been considered thatlitigant who is the dominus litis to have his forum conveniens andlitigant has the right to go to ‘a Court’ where part of cause of actionarises. 16.Referring to he case of Vodafone India Ltd. & Ors. Vs.TheCompetition Commissioner of India & Ors.[2], it is contended that itwould not be a case at all jurisdiction to entertain the writ petition. It isbeing submitted that there is no denial to the factual aspects and as amatter of fact petitioner is being considered responsible beingsuccessor company, stationed at Mumbai. It is an entity at Mumbaiand it cannot be said it is not afflicted by impugned order in Mumbai.Lot of correspondence ensued from Mumbai.Though order is passed inDelhi, it affects a person at Mumbai. As such, cause of action forpetitioner has arisen in Mumbai. 17.Learned senior counsel also refers to a decision of thiscourt dated 7.3.2011 in the case of Wills India Insurance Brokers Pvt.Ltd. Vs. Insurance Regulatory and Development Authority[3] wherein ithas been observed that part of cause of action has arisen within 2Writ Petition No. 8594 of 2017 with connected matters, dated 21.9.20173Writ Petition No. 2468 of 20103Writ Petition No. 2468 of 2010 10 / 18 WP. 950-2020 17.Learned senior counsel also refers to a decision of thiscourt dated 7.3.2011 in the case of Wills India Insurance Brokers Pvt.Ltd. Vs. Insurance Regulatory and Development Authority[3] wherein ithas been observed that part of cause of action has arisen within 2Writ Petition No. 8594 of 2017 with connected matters, dated 21.9.20173Writ Petition No. 2468 of 20103Writ Petition No. 2468 of 2010 10 / 18 WP. 950-2020 territorial jurisdiction of this court. Referring to clause (2) of Article226 of the Constitution, the court observed that the petitioner’sregistered office is located at Mumbai, it operates business fromMumbai. Since office of respondent No. 1 was located at Hyderabad,renewal application was required to be preferred at Hyderabad, itwould not be a case that no part of cause of action can be said to havearisen within the territorial jurisdiction of the Mumbai court. The caseof Navinchandra Majithia Vs. State of Maharashtra[4] had also beenreferred to wherein it has been held that high court has jurisdiction ifany part of the cause arisen within territorial limits of its jurisdiction,though the seat of government or authority or residence of personagainst whom direction, order or writ is sought to be issued is notwithin the territorial jurisdiction. It was considered that respondenthad been located at Hyderabad where decision is taken in connectionwith renewal application, a person who is likely to be affected on thebasis of such decision, can approach the court where he is affected bysuch decision and it cannot be said that no part of cause of action arosewithin territorial jurisdiction of this court. 18.Mr. Walve, learned counsel for respondents purports torefer to and rely upon a decision of this Court in the case of Principal 4(2007) 7 SCC 640 11 / 18 WP. 950-2020 Commissioner of Income-tax, Pune Vs. Sunguard Solutions (I) (P.)Ltd.[5].It appears that in said case, order by tribunal in Bangalore waspassed on 30.7.2015. On 8.9.2015 an order was passed under section127 transferring the assessee’s case from the assessing officer atBangalore to an assessing officer at Pune and the appeal was filed inJanuary, 2006 before this court contending that situs of the assessingofficer would alone determine the high court which would havejurisdiction over the orders of the tribunal under section 260A of theAct. At the time of appeal, seat of assessing officer is at Punetherefore this high court will have jurisdiction. Aforesaid submissionswere opposed by the assessee contending that appeals to high court aregoverned by chapter XX of the Act. Section 260A provides appeals tohigh court from every orders passed in appeal by tribunal. Section 269of the Act, defines the high court of the State. It was contended thatsection 127 of the Act deals with the jurisdiction of the authorities andwould not control / decide and/or determine which high court will bethe appellate forum. Perusal of said decision shows that it wasobserved that Sections 260A and 269 read together would mean thatthe high court referred to in section 260 A will be the high court asprovided/defined in section 269 i.e. in relation to any State, the HighCourt of that State.It would be seen that in aforesaid matter, apart 5(2019) 105 taxmann.com 67 (Bombay) 12 / 18 5(2019) 105 taxmann.com 67 (Bombay) 12 / 18 from distinguishable factual position, context had also been different.Decision of the supreme court in the case of Alchemist Limited & Anr.Vs. State Bank of Sikkim & Ors.[6] is being referred to in support ofcontentions that this court would not have jurisdiction. Said caseappears to be on different factual background. It appears that appellantcompany had certain negotiations with respondent bank in respect ofdisinvestment of equity capital of the bank at place ‘S’. Appellant wassituated at place ‘C’. It was contended that while negotiations wereheld between appellant and respondent at the place ‘S’, yet letters ofproposal and acceptance and also of rejection were communicated atthe place ‘C’. Writ petition was filed against the rejection by appellantcompany had been dismissed by the high court at ‘C’ for want ofterritorial jurisdiction and in appeal therefrom, the supreme court hadconsidered that it is not a case where essential, integral or materialfacts so as to constitute a part of ‘cause of action’ within tthe meaningof Article 226(2) of the Constitution of India, in the high court at place‘C’. 19.In the present case, it is seen there is acceptance in replyon behalf of respondents that petitioner is a successor company oferstwhile M/s. Tecnovate Esolutions Pvt. Ltd. and successor has its 62007 AIR (SC) 1812 13 / 18 WP. 950-2020 registered office at Mumbai and is stationed at Mumbai carrying inbvusiness. After impugned notice dated 30[th] March, 2019,correspondence from the petitioner’s side ensued from September,2019 onwards has not been disputed. It would not be said to be a casewherein no part of cause of action has arisen for the petitioner wherepetitioner would to be affected by impugned order, going by decisionsreferred to on behalf of petitioner.Having regard to facts andcircumstances and the decisions, relied on, on behalf of the petitioner,it does not appear that resistance to the petition on the ground ofjurisdiction would carry any efficacy. 20.Position emerges that there is no dispute on factual aspectthat TSPL had been amalgamated into M/s. Intelnet Global ServicesPvt. Ltd. with effect from 1[st] April, 2010. As a matter of fact, same hasbeen endorsed in the affidavit-in-reply filed on behalf of therespondents, referring to that petitioner is its ultimate successor.Thereafter, said company had also been submitting returns and thosewere assessed from time to time in respect of subsequent financial andassessment years. This aspect as well has not been disputed. So is thecase in respect of averments appearing in paragraph 4J. (c) of thepetition to the following effect: “(c)The Petitioner submitted that even after merger, 14 / 18 WP. 950-2020 sometimes the payers make payment to the Petitioner,however, erroneously continue to mention the PAN of theerstwhile company and not the Petitioner’s company.However, the Petitioner in its return of income consider allsuch payments and claim all such deduction. Therefore,there can be no question of any escaping assessment forthe assessment year 2012-13.” 21.During the course of submissions, learned senior counselMr. Mistri refers to decision of the Supreme Court of India in the caseof Principal Commissioner of Income Tax, New Delhi Vs. MarutiSuzuki India Ltd.[7] (Maruti Suzuki) “(c)The Petitioner submitted that even after merger, 14 / 18 WP. 950-2020 sometimes the payers make payment to the Petitioner,however, erroneously continue to mention the PAN of theerstwhile company and not the Petitioner’s company.However, the Petitioner in its return of income consider allsuch payments and claim all such deduction. Therefore,there can be no question of any escaping assessment forthe assessment year 2012-13.” 21.During the course of submissions, learned senior counselMr. Mistri refers to decision of the Supreme Court of India in the caseof Principal Commissioner of Income Tax, New Delhi Vs. MarutiSuzuki India Ltd.[7] (Maruti Suzuki) 22.The Supreme Court in the case of Maruti Suzuki (supra)had considered that income, which was subject to be charged to tax forthe assessment year 2012-13 was the income of erstwhile entity priorto amalgamation. Transferee had assumed liabilities of transferorcompany, including that of tax. The consequence of approved schemeof amalgamation was that amalgamating company had ceased to existand on its ceasing to exist, it cannot be regarded as a person againstwhom assessment proceeding can be initiated. In said case beforenotice under Section 143(2) of the Act was issued on 26.9.2013, thescheme of amalgamation had been approved by the high court witheffect from 1.4.2012. It has been observed that assessment order 7(2019) 416 ITR 613 (SC) 15 / 18 WP. 950-2020 passed for the assessment year 2012-13 in the name of non-existingentity is a substantive illegality and would not be procedural violationof Section 292 (b) of the Act. The Supreme Court in its aforesaid decision, has quotedan extract from its decision in Saraswati Industrial Syndicate Ltd. Vs.CIT[8]. The Supreme Court has also referred to decision of Delhi highcourt in the case of CIT Vs. Spice Enfotainment Ltd.[9]and observed thatin its decision Delhi high court had held that assessment order passedagainst non-existing company would be void. Such defect cannot betreated as procedural defect and mere participation of appellant wouldbe of no effect as there is no estoppel against law. Such a defect cannotbe cured by invoking provisions under section 292B. The SupremeCourt had also taken note of decision in Spice Entertainment (supra)was followed by Delhi high court in matters, viz. CIT Vs. DimensionsApparels (P.) Ltd.[10], CIT Vs. Micron Steels (P) Ltd.[11]; CIT Vs. MiscraIndia (P). Ltd.[12] and in CIT Vs. Intel Technology India Ltd.[13]Karnatakahigh court has held, if a statutory notice is issued in the name of non-existing entity, entire assessment would be nullity in the eye of law. Ithas also been so held by Delhi high court in the case of Pr. CIT Vs. 8(1990) 186 ITR 278 (SC)9(2018) 12 ITR-OL 134 (SC)9(2018) 12 ITR-OL 134 (SC) 10 (2015) 370 ITR 288 11 (2015) 59 taxmann.com 470/233 Taxman 120/372 ITR 386 (Del.) (Mag.) 12 (2015) 57 taxmann.com 163/231 Taxman 809 (Delhi) 13 (2016) 380 UTE 272 (Kar.) 16 / 18 Nokia Solutions and Network India (P) Ltd.[14] 23.The Supreme Court in Spice Infotainment Ltd. Vs. CIT[15]found that there is no reason to interfere with the impugned judgmentof Delhi high court and it found no merits in the appeal and specialleave petition and were dismissed accordingly. The Supreme Court had taken note of revenue resistance contending that contrary position emerges from decision of Delhi highcourt decision in Sky Light Hospitality LLP Vs. AssistantCdommissioner of Income-tax[16] and that it had been affirmed by theSupreme Court. However, the Supreme Court had also taken note ofSky Light LLP (supra) was in peculiar facts of the case, where the highcourt had catgegorically concluded that there was clerical mistakewithin the meaning of section 292B and the case had beendistinguished by decisions of Delhi, Gujarat and Madras high courts inRajender Kumar Sehgal Vs. ITO[17]; Chandreshbhai Jayantibhai PatelVs. IOT[18]; and Alamelu Veerappan Vs. ITO[19]. 24.In the circumstances, though the respondents refer to The Supreme Court had taken note of revenue resistance contending that contrary position emerges from decision of Delhi highcourt decision in Sky Light Hospitality LLP Vs. AssistantCdommissioner of Income-tax[16] and that it had been affirmed by theSupreme Court. However, the Supreme Court had also taken note ofSky Light LLP (supra) was in peculiar facts of the case, where the highcourt had catgegorically concluded that there was clerical mistakewithin the meaning of section 292B and the case had beendistinguished by decisions of Delhi, Gujarat and Madras high courts inRajender Kumar Sehgal Vs. ITO[17]; Chandreshbhai Jayantibhai PatelVs. IOT[18]; and Alamelu Veerappan Vs. ITO[19]. 24.In the circumstances, though the respondents refer to decision of Delhi High Court in case of Sky Light Hospitality LLP Vs. 14 (2018) 90 taxmann.com 369/253 Taxman 409/402 ITR 21 (Delhi) 15 (2012) 247 CTR 500 (Delhi) 16 (2018) 92 taxmann.com 93 (SC) 17 (2019) 10 taxmann.com 233/260 Taxman 412 (Delhi) 18 (2019) 101 taxmann.com 362/261 Taxman 137 (Guj.) 19 (2018) taxmann.com 155/257Taxman 72 (Mad.) 17 / 18 Vinayak Halemath Assistant Commissioner of Income Tax, Circle 28(1), New Delhi[20] itwould be of little avail for the respondents. The decision in the case ofMaruti Suzuki (supra) would hold sway over present facts andcircumstances. 25.Foreoing discussion and decisions referred to on behalf ofpetitioner lead us to consider that petitioner has made out a case forreliefs and it would be appropriate to allow petition in terms of prayerclause (a). Rule is made absolute in terms of prayer clause (a). Thewrit petition is disposed of. Sd/-[ABHAY AHUJA, J.] Sd/- [SUNIL P. DESHMUKH, J.] 20 (2018)90 taxamann.com 413 (Delhi) 18 / 18