2009 (7) TMI 78 - SC - Income Tax

Jurisdiction Effect of search and seizure centralization of case u/s 127 Commissioner proposed to centralize the cases vide notice dated 10.11.2006 assessee challenged the notice and prayed for an opportunity of hearing vide letter dated 2.1.2007 No response from department side to letter dated 2.1.2007 Ex party order was passed on 18.1.2007 Held that in view of subsequent events - the proceedings for transfer of the file of the appellant from Kanpur to Delhi, for the purpose of centralising the cases for coordinated investigation and meaningful assessment has become infructuous. In this view of the matter, the impugned order cannot be sustained which is set aside accordingly. The appeal is allowed

Summary

The Supreme Court of India, in a case involving a transfer order by the Commissioner of Income Tax under Section 127 of the Income Tax Act, 1961, examined the circumstances of a search conducted at the premises of M/s. Radico Khaitan Ltd. The appellant was directed to attend the office of the Commissioner of Income Tax in Delhi for a coordinated investigation and meaningful assessment. The appellant challenged the transfer order, arguing that the notice lacked proper jurisdiction and explicit reasoning. The appellant further stated that they had no business or transactions in Delhi and that their directors resided elsewhere. Despite numerous contentions, the Commissioner passed the transfer order solely based on the search at M/s. Radico Khaitan Ltd. However, subsequent events, including an assessment order and a settlement commission application by M/s. Radico Khaitan Ltd., rendered the transfer proceedings irrelevant. Consequently, the Supreme Court set aside the transfer order, deeming it infructuous, and allowed the appeal. The judgment highlights the importance of considering subsequent events in evaluating the necessity of transfer orders.