TMI Blog2013 (10) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... ngle Assessing Officer. This would avoid duplication of collection of evidence and assessment of evidence. This would also avoid conflict of opinions. The reason that being search cases they had to be placed before a centralised circle office also cannot be stated to be irrelevant. The Department for internal convenience and efficient functioning, it has created a special branch for dealing with search cases and has decided to conduct assessments of such cases under such wing, surely the assessee cannot have any objection to the same. The assessee has no right in law to insist that his case be kept out of consideration of such branch – Petition dismissed – Decided against the Assessee. - Special Civil Application No. 16883, 16886, 16888, 16896 of 2012 - - - Dated:- 23-1-2013 - MR. AKIL KURESHI AND MS SONIA GOKANI, JJ. For the Petitioner : Mr S.N Soparkar, Sr Advocate and Mr. B S Soparkar Advocate For the Respondent: Mrs. Mauna M Bhatt, Advocate ORDER Per Akil Kureshi J.- 1. These group of petitions arise out of a common background. They have been heard together and would be disposed of by this common judgment. 2. The facts are brief and virtually undispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that they have no objection if the cases are centralised either at Bhavnagar or Mumbai. 5. The Commissioner, however, passed his impugned order dated November 12, 2012, and transferred all the cases to the Assistant Commissioner, Central Circle-1(3), Ahmedabad. In his order, he considered the objections of the assessees but did not accept them observing that the assessees are attending the cases before the Commissioner (Appeals) at Ahmedabad. There is no requirement that the assessees should have their business activities in Ahmedabad also. It was observed that the Income-tax Department does not have a Central Range Office at Bhavnagar. The assessees were, therefore, offered any one of the places, namely, Surat, Baroda, Rajkot and Ahmedabad where the Department has centralised offices. The authorised representatives of the assessees, however, did not accept any such other alternative places. The Commissioner further observed that it is necessary that the group cases are centralised at one place in Gujarat where the Department has offices under the Central Range for carrying out co-ordinated investigations as no centralisation proposal from Mumbai office has been received in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of by a speaking order. Reasons were recorded in the order itself. Such order was duly communicated. She, therefore, submitted that all the requirements for exercise of power under section 127(2) of the Act as interpreted by various courts were fully complied with. 7.1. Counsel submitted that the assessments which have been transferred arise out of search operations in connection with the group of persons/companies belonging to the same family/group. It was, therefore, necessary that such assessments be consolidated before a single Assessing Officer. She submitted that all assessments arising out of search operations are placed at the disposal of the centralised wing of the Department. This was done as per the instructions contained in the Central Board of Direct Taxes circular dated September 17, 2008. She submitted that in the said circular it is provided that : "Instances have come to notice of the Board that search cases are not being centralized promptly, thereby causing delay in initiation of the search assessment proceedings, deferment of payment of taxes and finally resulting in completion of search assessments at the fag end of the limitation perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised objections and contended that none of the petitioners have establishments at Ahmedabad. They are assessed at Bhavnagar or Mumbai. Cases can, therefore, be consolidated at one of those two places but not at Ahmedabad. It would be inconvenient for the petitioners to travel to Ahmedabad regularly. Such objections were considered by the Commissioner but rejected in the speaking order dated November 12, 2012. In the said order he recorded and considered the objections in the following manner : "5. I have considered the objections of the assessees. The main objection of this group of assessees is that since the business of the assessees is either at Bhavnagar or Mumbai and they do not have any business activities at Ahmedabad, therefore, their cases may be centralized either at Bhavnagar or Mumbai. This request of the assessees cannot be accepted particularly when the appeal matters before the Commissioner of Income-tax (Appeals) and higher authorities are being attended by them at Ahmedabad only. For this purpose, there is no requirement that the assessees should have their business activities in Ahmedabad also. Further, the IT Department, Gujarat, does not have office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner, (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order ; (b) where the Directors General or Chief Commissioners or Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice indicating tentative reasons on which he proposed transfer of the cases. The petitioners were allowed to raise their objections. Their authorised representative was also heard in person. After undertaking such steps, he passed a speaking order disposing of the objections. Such order was communicated to the petitioners. In so far as procedural requirements of section 127(2) of the Act are concerned, thus stood satisfied. It is not even the case of the petitioners that opportunity of hearing was not given or that the reasons were not communicated. 14. Case of the petitioners, however, is somewhat different. They contended that the expression "for effective and co-ordinated investigation" used in the show-cause notice being too general and vague would not satisfy the requirement of putting the petitioners to notice why cases were under proposal for transfer. They further contended that in any case such reason is not sufficient to permit the transfer. In this context, we may advert to the authorities cited by both the sides. (1) In the case of Naresh Kumar Agarwal [2010] 320 ITR 361 (Cal), the learned single judge of the Calcutta High Court opined that the expression "co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to mention if the notice the reasons for the proposed transfer so that the assessee could make an effective representation with reference to the reasons set out. It is not sufficient merely to say in the notice that the transfer is proposed 'to facilitate detailed and co-ordinated investigation'. The reason cannot be vague and too general in nature but must be specific and based on material facts. It is again not merely sufficient to record the reasons in the file but it is also necessary to communicate the same to the affected party." (4) In the case of Power Controls [2000] 241 ITR 807 (Delhi), Division Bench of Delhi High Court struck down the transfer of assessment proceedings on the ground that the reasons recorded in the file were not communicated to the assessees. While doing so, the court clarified that they were not holding that administrative convenience or coordinated investigation cannot be a valid ground for transferring the cases belonging to a particular group to a single Assessing Officer. We may reproduce the observations of the court in this context (page 816) : 19. "We are, therefore, of the view that the petitioners have not been granted adequate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 545) : 6. "In the cases of Peacock Chemicals P. Ltd. v. CIT [1990] 182 ITR 98 (All) and Mahesh Chand Vishan Swarup v. CIT [1991] 187 ITR 177 (All) (Bench presided over by B. P. J. Reddy), it is consistently held that the paramount consideration for transfer should be public interest and the reason to have co-ordinated investigation in the matter of one family members or group of company/firm is a good ground. In the instant case, the authority has recorded its satisfaction and given good reason which cannot be faulted. 7. The contention of the petitioner that the Department should have furnished information with them (as claimed by them in their reply) is not at all sound as the Department cannot be compelled or required at the initial stage to disclose the 'material' or 'information' as it may 'embarrass or prejudice' the assessment. The legal position is crystal clear and settled by a catena of the decisions of this court and the apex court on this issue. this court cannot go into the 'sufficiency' of the reasons : There is no pleading that the impugned order of transfer is due to 'bias' or 'mala fide' or otherwise 'arbitrary'. The reasons indicated in the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition making following observations: "9. Undoubtedly, the order of transfer of assessment file of an assessee to a far off place puts the assessee in a great inconvenience and ought not to be ordered unless necessary in public interest to safeguard revenue by centralisation of cases for co-ordinated investigation. Such an order cannot be passed arbitrarily and can be justified only if there are valid reasons. The principles of natural justice as well as the statutory provision require that the reasons must be recorded in writing in the order itself and disclosed to the assessee to enable the assessee to take its remedies against such an order. At the same time, the power conferred for transfer cannot be interfered with having regard to the object for which such power is conferred. The impugned order records the reason, that is need for centralization for effective and co-ordinated investigation. The nexus between the petitioner and the Baroda company cannot be held to be non-existent. The decisions relied upon by learned counsel for the Revenue support the submission that if it was necessary for co-ordinated and effective investigation, transfer under section 127 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no scope for interference by this court in these matters which are purely administrative in nature ; except when there is allegation of mala fides or want of jurisdiction. No assessee has a vested right to have his assessment decided by any officer or at any place. It is for the head of the Department to allocate work among the officers under him subject to the Act and Rules." (6) In the case of J. R. Tantia Charitable Trust (supra), the learned single judge of the Rajasthan High Court upheld the order of transfer of assessment from Sriganganagar to Bikaner office for co-ordinated investi-gation and administrative convenience. It was observed as under (page 234 of 355 ITR) : "10. In the opinion of this court, while it is true that section 127 of the Act requires the competent authority to record his reasons for transferring any case from one assessing authority to another, such reasons apparently appear to have been recorded and communicated to the petitioner, vide annexure 3, dated June 10, 2009, namely, that such transfer of case from Sriganganagar to Bikaner was required for co-ordinated investigation as the petitioner trust was a case closely connected with the search, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed as under : "23. From the aforesaid decisions the following position emerges : The assessee has to be assessed by an officer who has been vested with jurisdiction over an area where the persons carries on a business or profession under section 124(1) of the Act. The exigencies of the tax collection may require the income-tax authorities to transfer the case of a particular assessee from the Assessing Officer of the area within which he resides or carries on business to another Income-tax Officer under sub-sections (1) and (2) of section 127 of the Act. The order of transfer is not a material infringement of the assessees' rights. Before transferring the case from one officer to another a notice has to be given to the assessee. The notice should briefly state the reasons why it is proposed to transfer the case. Before ordering transfer reasons have to be recorded and it has to be communicated to the assessee. The officer has to apply his mind to the materials on record or information available while passing an order, of transfer." (8) We may also notice that before this court in the case of Arti Ship Breaking (Supra) transfer of pending assessments came up f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to sufficient notice on the grounds on which the competent authority proposed to transfer the cases. Some courts have held that such reasons for transferring the case would not be sufficient. On the other hand, several courts of the country have taken a view that such reasons are sufficient to permit transfer of cases. 17. We would, therefore, like to express our opinion on the issue. 18. Section 127 of the Act, as already noticed, pertains to power to transfer cases. Sub-section (1) empowers the Director General, the Chief Commissioner or the Commissioner after giving the assessee a reasonable opportunity of being heard wherever it is possible to do so and after recording his reasons, transfer any case from one more or more Assessing Officers subordinate to him to any other Assessing Officer or Assessing Officers also subordinate to him. Likewise, under sub-section (2) of section 127 after following similar procedural requirements, it is open for the Director General, Chief Commissioner or Commissioner to transfer a case from one Assessing Officer to another who is not subordinate to him in agreement with the authority to whom he may be subordinate. Sub-section (3) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons which prompted the competent authority to transfer the case can be stated to be wholly irrelevant or arbitrary, the court would not interfere with such reasons. Ofcourse an order of such a nature can and need to be quashed if it is demonstrated that same is passed either without jurisdiction or is actuated by mala fide either in fact or in law. 20. In the case of State of U. P. v. Johri Mal reported in AIR 2004 SC 3800, the Supreme Court observed as under : "28. The scope and extent of power of the judicial review of the High Court contained in article 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including the nature of power exercised by the public authorities, namely, whether the power is statutory, quasi judicial or administrative. The power of judicial review is not intended to assume a supervisory role or done the robes of omnipresent. The power is not intended either to review governance under the rule of law nor do the courts step into the areas exclusively reserved by the suprema lex to the other organs of the State. Decisions and actions which do not have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and coming to a plausible conclusion and then testing the decision of the authority on the touch-stone of the tests laid down by the court with special reference to a given case. This position is well settled in Indian administrative law. Therefore, to a limited extent of scrutinizing the decision making process, it is always open to the court to review the evaluation of facts by the decision maker." In case of State of N.C.T. of Delhi v. Sanjeev alias Bittoo reported in [2005] AIR 2005 SC 2080, the court observed as under : "15. One of the points that falls for determination is the scope for judicial interference in matters of administrative decisions. Administrative action is stated to be referable to broad area of Governmental activities in which the repositories of power may exercise every class of statutory function of executive, quasi-legislative and quasi-judicial nature. It is trite law that exercise of power, whether legislative or administrative, will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary (See State of U. P. v. Renusagar Power Co., AIR 1988 SC 1737. At one time, the traditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns v. Minister for the Civil Service [1984] 3 All ER 935, (commonly known as CCSU Case). If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. (See CIT v. Mahindra and Mahindra Ltd. [1983] 144 ITR 225 (SC) ; AIR 1984 SC 1182. The effect of several decisions on the question of jurisdiction has been summed up by Grahame Aldous and John Alder in their book Applications for Judicial Review, Law and Practice thus : There is a general presumption against ousting the jurisdiction of the courts, so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however, certain areas of governmental activity, national security being the paradig, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the government's claim is bona fide. In this kind of non-justiciable area judicial review is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as thereupon that the Commissioner proceeded to finalise his proposed transfer of cases from Bhavnagar to Ahmedabad. 22. We do not find that the Commissioner committed any error either in law or in facts. Reason for transfer was clearly indicated in the show-cause notice, namely, for centralisation of cases and for effective and co-ordinated investigation. Such reasons were further elaborated while dealing with and disposing of the objections of the petitioners in the final order of the transfer. Before doing so, the authorised representative of the petitioners was offered three other alternatives-Rajkot, Baroda and Surat where the Department had centralized wing. We do not find that the reasons either lacked clarity or sufficiency. When it is pointed out that several places of the company were subjected to common search operation, it is but natural that it would be in the interests of the Revenue and perhaps also in the interests of the assessees that cases be consolidated and be placed before one single Assessing Officer. This would avoid duplication of collection of evidence and assessment of evidence. This would also avoid conflict of opinions. The reason that being search ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was, therefore, urged that the present petitions could also be admitted since the earlier petitions are admitted and pending consideration by a larger Bench. We have not accepted such a formula for the following reasons : (1) Firstly, the issue referred to the larger Bench in the said order dated March 12, 2012, is wholly different. In the case of Millennium Houseware v. CIT [2013] 355 ITR 242 (Guj), this court had taken a view that by virtue of subsequent judgments of Supreme Court in the case of Managing Director, ECIL, Hyderabad, etc. v. B. Karunakar reported in AIR 1994 SC 1074 and State Bank of Patiala v. S. K. Sharma reported in AIR 1996 SC 1669 despite the decision in the case of Ajantha Industries [1976] 102 ITR 281 (SC), in the facts of the case non-communication of the reasons for transferring the case would not vitiate the proceedings. It was this issue which a subsequent Division Bench found unable to persuade itself. It is this reason why the reference has been made to a larger Bench. We are not concerned with this aspect at all. Further, counsel urged that since similar petitions are admitted these petitions should also be admitted. Ordinarily, when a similar issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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