TMI Blog2014 (3) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... - the Supreme Court has also recognized that a Section 127 order does not by itself cause any prejudice to the assesee, and given that due deference must be granted to the Revenue in such matters, the limits of review of such orders is narrow. In Kashiram Agarwala v. Union of India, [1964 (10) TMI 8 - SUPREME Court]. The assessee also has the opportunity to present his case, and be subject to a regular assessment, in front of the AO to whom jurisdiction has been transferred - No prejudice is caused by the mere fact of a Section 127 order, such that detailed reasons and specific grounds are required to be provided, as the petitioner today argues - the show-cause notice granted the petitioner in the case an opportunity of being heard - No oral representation was made by the petitioner on that date, nor was any request for another date made to the Commissioner - thus, the argument that no chance to effectively represent the case was provided has no merit – Decided against Assessee. - W.P.(C) 1147/2014, C.M. APPL. 2393/2014 & 2394/2014 - - - Dated:- 18-2-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. For the Appellant : Sh. Ajay Vohra, Ms. Kavita Jha and Sh. Vaibhav Kulkar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states categorically that these two companies are special purpose vehicle companies promoted by Eldeco group. It is in this context of the inquiry into the income of the Eldeco Group of Companies, and the search and seizure operations conducted under Section 132 of the Act at the premises of Xanders Advisors and Xander Finance Private Limited, that the show-cause notice were issued. 4. Pursuant to the show-cause notice, while the petitioner did not make any oral representation on the assigned date, written objections were furnished raising the following grounds: The assessee is the Managing Director of Xander Advisors India Pvt. Ltd., which has its Registered as well as Corporate office in Delhi. Xander Group has invested in the projects of Eldeco Group and formed SPVs for the purpose. The assessee acts only in the capacity of the nominee Director, of the Xander Group and draws no remuneration from Eldeco Group of Companies. Other than this, the assessee has no business relationship with Eldeco Group. We are enclosing the copies of the income tax returns along with the acknowledgment of the assessee for the past 5 years from where it may be verified that he is in receip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Circle Noida for effecting meaningful investigation in a coordinated manner with one officer. 3. In exercise of powers conferred by sub-section (2) of section 127 of the I.T. Act, 1961 and all powers enabling me in this behalf, I, the Commissioner of Income Tax Delhi XVI New Delhi hereby transfer the cases, particulars of which are mentioned in Column No. 2 of the Schedule hereunder, from the Assessing Officer mentioned in Column No. 4 to the Assessing Officer mentioned in Column No. 5 below, after receiving the concurrence from the Commissioner of Income Tax (Central) Kanpur vide letter no. 1870 dated 4/9/2013. This order is being passed for conducting coordinated investigation: 6. Impugning this order, the petitioner argues that it does not carry any cogent reasons for transfer, as required by Section 127. It is argued that there was no warrant to transfer the cases, as no material was presented on the basis of which the transfer could be made. Rather, such a transfer - it is argued - was made on a mere suspicion, especially since no raid was conducted at the petitioner s residence. Further, learned counsel argues no justifiable and cogent reasons have been brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Eldeco Group. Finally, learned counsel argued that a reasonable opportunity of being heard is mandatory under Section 127. It is argued that in this case no specific reasons for the proposed transfer were recorded, nor was any material or information communicated to the petitioner, such that an effective representation could be made. Finally, it is argued that the impugned order is contrary to the show-cause notice. While the latter purported to transfer the case to the CIT (Central Circle), Faridabad, the case was ultimately centralized in Noida. 8. The impugned order and the preceding show-cause notice in this case arise from previous investigations of the Revenue into the Eldeco Group of Companies. It is not in dispute today that the petitioner holds a crucial position of Managing Director of XAPL, which in turn, provides advisory services - through a chain of companies - to XIH III and IV, which are part of the Eldeco Group of Companies. The petitioner also admits that the entities lying further downstream are Special Purpose Vehicles, which are dependent upon and controlled by the Eldeco Group, and are engaged in construction activities. The officers of XAPL were subject t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved. Indeed, the Supreme Court has also recognized that a Section 127 order does not - by itself - cause any prejudice to the assesee, and given that due deference must be granted to the Revenue in such matters, the limits of review of such orders is narrow. In Kashiram Agarwala v. Union of India, [1965] 56 ITR 15 (SC), the Supreme Court held: 6. But on the other hand, the provision that nothing in subsection (1) shall be deemed to require any opportunity to be given, is worded in an emphatic form; and that fact has to be borne in mind in considering the effect of the proviso. Besides, it would not be unreasonable to assume that the recording of reasons prescribed by s. 127(1) would be appropriate where a transfer is being made otherwise than in the manner prescribed by the proviso. In such a case, normally, the assessee has to be given a reasonable opportunity to be heard; and the natural corollary of this requirement is that his objections to transfer should be considered and reasons given why the transfer is made despite the objection of the assessee. In other words, the requirement as to the recording of reasons flow as a natural consequence and corollary of the requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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