Bombay HC uses forum conveniens Doctrine to Dismiss Trustcap’s Income Tax Matter with Cause of Action at Kolkata [Read Order]

The Bombay High Court recently dismissed an income tax matter using the principle of forum conveniens, holding that the Bombay High Court was not the appropriate court exercising jurisdiction over show-cause notice and reassessment notices that had been issued in Kolkata.

A writ petition was lodged before the Bombay High Court by Trustcap Private Limited, an investment service oriented entity, challenging notices issued under Section 148A(b) dated August 27, 2024, and a consequential order under Section 148A(d) of the Income Tax Act dated September 21, 2024, issued by the Respondent Income Tax Officer Ward 2(1), Kolkata and the Chief Commissioner of Income Tax, Kolkata.

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The core issue pertained to whether the Bombay High Court exercised requisite jurisidciton to try this matter. Appearing on behalf of Trustcap, Kinjal Bhutia contended that the petitioner’s registered office was located in Mumbai, which formed part of the essential cause of action. She relied on the fact that the Permanent Account Number (PAN) database with the Income Tax Department also reflected the Mumbai address.

Trustcap had earlier sought surrender of its PAN in 2007 following a change in its business structure and maintained that there were no ongoing proceedings against it until the sudden initiation of reassessment by the Kolkata jurisdictional authority.

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The counsel cited the Bombay High Court decision in Wills India Insurance Brokers Pvt. Ltd. v. IRDA (2012) and the Supreme Court ruling in Kusum Ingots and Alloys Ltd. v. Union of India (2004) to argue that even a part of the cause of action arising in Mumbai would be sufficient to invoke the writ jurisdiction of the Bombay High Court.

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Meanwhile, the Revenue, represented by Shilpa Goel opposed the maintainability of the petition before the Bombay High Court.

The Division Bench of Justice M.S. Sonak and Justice Jitendra Jain observed that the fact that a minuscule part of the cause of action may have arisen in Mumbai shall not be a determinative or compelling factor to compel the Bombay High Court to exercise its discretion under Article 226 to entertain the present petition.

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The Bench referred to the doctrine of forum conveniens and noted that the authorities whose actions were challenged were located entirely in Kolkata, which is where the records were maintained, notices issued, and decisions taken; thus, entertaining the petition in Mumbai would not only be inconvenient in light of the existence of another competent territorial jurisdiction, but paved way for forum shopping as well.

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Dismissing the petition, the Court clarified that it had not gone into the merits of the challenge to the reassessment proceedings, and the petitioner was free to pursue appropriate remedies before the jurisdictional High Court at Calcutta.

To Read the full text of the Order CLICK HERE

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Trustcap Private vs Income Tax Officer Ward , 2025 TAXSCAN (HC) 692 , WRIT PETITION NO. 742 OF 2025 , 15 April 2025 , Ms Kinjal Bhutia , Ms Shilpa Goel