Synopsis

This judgment by the Bombay High Court addresses a writ petition challenging income tax demands for Assessment Years 2001-02 to 2003-04, totaling approximately Rs. 33.4 lakhs, along with a recovery notice issued under Section 220 of the Income Tax Act, 1961. The core issue was a preliminary objection by the Revenue regarding the court's territorial jurisdiction to entertain a petition against an officer located in Delhi. The court, after a detailed analysis of Article 226 of the Constitution (pre and post-1963 amendment), held that a significant part of the cause of action arose within its jurisdiction, as the petitioner's registered office was in Pune, the consequences of the demand were felt there, and the jurisdictional officer had been transferred to Pune. On the merits, the court quashed the demands and the recovery notice, finding that the Revenue had failed to produce any underlying assessment or rectification orders creating the demands, rendering them non-existent.

Writ Petition No. 16068 of 2024

Court: High Court of Judicature at Bombay (Civil Appellate Jurisdiction)
Coram: B. P. Colabawalla & Firdosh P. Pooniwalla, JJ.
Date of Judgment: March 24, 2026
Citation: 2026:BHC-AS:15349-DB
Core Law: Constitutional Law, Income Tax Law, Writ Jurisdiction
Reading Time: Approximately 10-12 minutes.

2. Legal Framework

• Constitutional Law: Article 226 of the Constitution of India, particularly clauses (1) and (2), which govern the power and territorial jurisdiction of High Courts to issue writs.

• Income Tax Act, 1961: Section 220 (demand and recovery), Section 127 (transfer of cases), and Section 154 (rectification of mistakes).

• Procedural Law: The interpretation of "cause of action" as enshrined in Article 226(2) is analyzed in pari materia with Section

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