TMI Blog2016 (7) TMI 1386X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order dated 14.10.2015 is passed in defiance of principles of natural justice and therefore, in true sense, compliance of section 127 of the Act is not made by the respondent no.1 and therefore, this being the position on record, on this ground alone, the order impugned deserves to be quashed. The petitioner has specifically pointed out that he has even no remote connection with said M/s. HVK International Group, Surat. In the detailed reply submitted before the authority, it was brought to the notice that the petitioner is not at all directly or indirectly connected nor having any financial transactions with the said group. It was also specifically asserted that search operation was under mistaken belief. From the record of the case, even a certificate is issued by the said M/s. HVK International Group dated 3.12.2015 in which it was specifically submitted that there is no business or financial transaction or any connection with the present petition. For the reasons recorded above, this petition is allowed. The impugned order of tranfer passed by respondent no.1 authority is hereby quashed and set aside. - SPECIAL CIVIL APPLICATION NO. 4755 of 2016 - - - Dated:- 29-7-2016 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner's case from Ahmedabad to Surat has already been passed on 27.10.2015. It is in this background the petitioner had further raised serious objection vide letter dated 21.12.2015 objecting to the said transfer of the case from Ahmedabad to Surat without affording an opportunity of personal hearing. It was conveyed that it is the requirement of statute that before transferring the case, an opportunity of hearing is required to be afforded. It was further submitted that the order cannot be said to be justified on the basis of coordinated investigation and assessment as the petitioner had no direct or indirect connection with the said firm named M/s. HVK International Group, Surat. On the contrary, the petitioner heard the name of the company for the first time and there is not a single financial or accounting transaction with the said group. It was also brought to the notice of the authority that searches were carried out at the premises of the petitioner under mistaken identity of Sanjay Dhanak, a builder because the petitioner had purchased Sanjay Dhanak's flat situated at A/301, Shyam Residencey, Science City Road, Ahmedabad. The petitioner has even submitted a letter fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition, no reasons are assigned. It reflects non-application of mind and therefore, such a non-speaking order may not be allowed to stand in the eye of law. While passing such order, the authority has defeated the very purpose and object of affording an opportunity to the person concerned as contemplated under section 127of the Act. He therefore, contended that the order is required to be quashed and set aside. It was further contended by the learned counsel for the petitioner that in absence of any cogent material linking or connecting the petitioner that M/s. HVK International group, Surat, no such subjective satisfaction can be arrived at on the issue of effective and coordinated investigation and assessment. It was pointed out that on the basis of such vague reason not supported by any cogent material, since the order is passed, the same is required to be quashed in the interest of justice. It was also contended that even during the process of search, a statement was recorded in which also no tangible material of any nature is found which would even remotely connect the petitioner to the said firm namely M/s HVK International Group, Surat. There is no positive statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r itself that for the purpose of effective and coordinated investigation and assessment, section 127 of the Act came to be resorted to and therefore, since the order is supported by reason, the same may not be allowed to be assailed by the petitioner. It was also brought to the notice from the affidavit-in-reply more particularly para-6 that there is material found from the petitioner which necessitated the respondent authority to exercise powers under section 127 of the Act having found by the authority that house which came to be purchased by the petitioner is from Sanjay Dhanak who is having close nexus in business with the said firm namely HVK International group, Surat. The stand of the authority was that Sanjay Dhanak was dealing with real estate ventures of the director of HVK International group and the survey which was carried out in which it was found that flat came to be purchased by the petitioner about 4 to 5 months back. On the basis of such kind of stand having been taken, it was averred in the reply that said premises in question was running as a business premises of M/s. Brillare Reality Private Ltd. in which directors/share holders of HVK International group are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed to be disturbed. 5. Having heard learned counsel for the respective parties and having gone through the material on record and giving our anxious consideration to the impugned order passed by respondent no.1, it appears that the order passed by the respondent authority is not germane in law. We may refer to statutory provisions in which mandate of affording an opportunity is stipulated and for that purpose, section 127 of the Act need to be reproduced hereinbelow: 127. (1) The [ Principal Director General or ] Director General or [ Principal Chief Commissioner or ] Chief Commissioner or [ Principal Commissioner or ] Commissioner 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 Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year.] 6. Before dealing with the contentions, this statutory provisions is required to be analysed in which ultimately it is found that the concept of affording an opportunity of hearing is very much effectively envisaged and said provision gives mandate to the authority to afford an opportunity cannot be given a go-bye in a lighter way. It is a well settled position of law that statutory provisions must be given full effect and to see that the same may be scrupulously observed by the authority. We may recall that while dealing with such issue of section 127 of the Act, Division Bench of this Court in a case reported in the case of Shree Ram, Vessel Scrap (P) Ltd. vs. Commissioner of Incometax- VI reported in (2013) 32 Taxmann.com.120 has analysed the provisions and considered the issue which is time and again posed by the authorities of centralisation of cases for effective and coordinated investigation and assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d adequate opportunity is required to be given to the assessee. Para-11 of the said decision makes it clear that revenue would not be absolved from its obligation to discharge such function contemplated under the provisions of the Act. Para-11 reads as under: 11. We do not find substance in the submission of the respondent-Revenue that there is no requirement to offer a personal hearing as the same was not asked for by the petitioner. This court in the matter of Sahara Hospitality (supra) has held that it is mandatory wherever it is possible to do so on the part of the Revenue to grant a personal hearing before passing an order under Section 127(2) of the Act. Thus merely because the petitioner had not specifically asked for a personal hearing it will not absolve the revenue of its obligation to ordinarily grant such a hearing. Similarly, the participation, if any, by the petitioner before the Officer at Mumbai was without prejudice to its challenge to his jurisdiction, as the same was pending in this court to the knowledge of the Respondent-Revenue. In these circumstances, the revenue will not be absolved of its obligation of giving a personal hearing to the petitioner before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 14th August, 2002 issued by 6 the CBDT cannot be supported as transfer has to be on the basis of Section 127. Further, the argument of the respondents that the transfers were for effective and coordinated investigation , evident from the letter dated 7th April, 2006 issued by the Deputy Director of Income Tax (Inv.) Unit-VII (2), Mumbai, (pages 26 - 28 of the affidavit-inopposition), has been set at naught by the order dated 13th March, 2008 issued by the Chairman, Income Tax Settlement Commission (page 20 of the application being GA No.507 of 2009) directing transfer of the files of the petitioners from Additional Bench Mumbai to Additional Bench Kolkata. Besides,since it is evident from pages 14, 15 and 16 of the said application, ETO, of which the petitioners are the partners, is still assessed at Kolkata, the argument that transfer is for centralisation is without merit. 11. Reverting back to the case on hand, it emerges from the record that the notice of hearing dated 14.10.2015 fixing the date of hearing on 26.10.2015 came to be received by the petitioner on 27.10.2015 i.e. after the actual date of hearing. It also emerges from the record that within a very short perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no remote connection either with the petitioner or with his family members. The said affidavit dated 7.12.2015 sworn on 9.12.2015 requires to be taken note of. Relevant paragraphs 4 and 5 of the said affidavit read as under: 4. That I came to know Shri Lalabhai Kamabhai Bharwad and his family members vis. Smt. Anuben Lalbhai Bharwad, Shri Ashok Lalbhai Bharwad and Shri Pintoo Lalbhai Bharwad because of the above deal only. 5. That I do not have any financial or other business transaction with Shri Lalabhai Kamabhai Bharwad, Smt. Anuben L.Bharwad, Shri Ashok Lalbhai Bharwad and Shri Pintoo Lalbhai Bharwad, Ahmedabad so far except the deal as per para 3 above besides having received advances from Shri Lalabhai Kamabhai Bharwad against the promise of sale of office premises at 11/12//12A, Shyam Residence, Science City Road, Ahmedabad. 14. Even from the objections filed by the petitioner alongwith some statements have been brought to the notice which was recorded on 9.12.2014 which is reflected on para-30 of the compilation. In the said statement also, there is no positive material found on of any nature or information revealed which would link the petitioner with said M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 127 of the Act to the detriment and prejudice of the petitioner and therefore, the authority referred to above is of no avail to the respondent. It is settled position of law that while applying principles of precedent, if the facts are different, it would make a world of difference in applying principle and therefore, keeping that proposition in mind, we are of the opinion that in the present case, the authority has not passed the impugned order in right spirit in which the same ought to have been passed. It appears that the exercise of power is based upon mere conjectures and surmises and under the garb of centralised and effective coordinated investigation and assessment, the respondent no.1 has passed an order which is not supported by subjective satisfaction nor reflects any application of mind. Hence, the impugned order dated 14.10.2015 requires to be quashed and set aside. 15. For the reasons recorded above, this petition is allowed. The impugned order dated 14.10.2015 passed by respondent no.1 authority is hereby quashed and set aside. The case of the petitioner is ordered to be transferred back from the office of DCIT, Central Circle- 3, Surat to the office of IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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