TMI Blog2006 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... or transfer of a case, and if the reasons ex facie do not justify transfer, an order of transfer might be interfered with by this court. The petitioner-company and Pioneer Embroideries Ltd., are distinct body corporates, separately assessed to income-tax. Even though petitioner No.2 might be a director of the petitioner-company as also Pioneer Embroideries Ltd., petitioner No.2 is an individual assessee. In the absence of any business connection between the petitioner-company and Pioneer Embroideries Limited and in the absence of any finding that the valuables or documents seized from the residence of petitioner No.2 had any relationship with Pioneer Embroideries Limited or any of its sister concerns, there could be no question of transferring the case of the petitioners to Mumbai. There can, however, be no doubt that the income-tax authorities might continue with the investigation, if any, against each of the petitioners - The impugned order is set aside and quashed. This order will, however, not prevent the respondent authorities from issuing a fresh order of transfer u/s 127 of the Income-tax Act, 1961, transferring the case of petitioner No.2 to Mumbai in the event any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impounded. 8. Fifteen months after the search and impounding of documents, the petitioners received identical notices dated February 23, 2006, with regard to the proposal to transfer the Income-tax files of the petitioners to Mumbai under section 127 of the Income-tax Act. 9. By two several letters both dated February 28, 2006, the petitioners objected to the transfer and requested a week' s time for detailed submissions. The hearing before respondent No. 1 was adjourned till March 7, 2006. On March 6, 2006, the petitioners filed detailed objections to the proposal for transfer. 10. In the objections, the petitioners specifically pointed out that the registered office of the petitioner-company was at Kolkata, all of its directors were assessed to tax at Kolkata and the company had no business activity anywhere in Maharashtra, nor any business connection or financial transaction with Pioneer Embroideries Ltd., or any its group of companies and/or sister concerns. The petitioners also pointed out that the petitioner had only been a non-executive director of Pioneer Embroideries Ltd., and that apart from petitioner No. 2, no other director ever had any connection with Pio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed wherein inter alia he has admitted his undisclosed income of Rs. 3,17,000 on account of sale proceeds of 500 gms of gold, which was found to be not recorded in the books of account. M/s. P. S. Housing Finance P. Ltd. During the course of search action at the residential premises of Shri Surendra Dugar at Kolkata, who is one of the directors of M/s. PEL, it was found that he is the main person of M/s. P. S. group of companies. Subsequently the Kolkata Directorate conducted a survey action at the office premises of M/s. P. S. Housing Finance P. Ltd., at Kolkata and impounded the computer data.' Considering the above justification given by the Chief Commissioner of Income-tax, Central-II, Mumbai as also the fact that both these assessees were searched in connection with the search at Pioneer Embroideries group and Baid group, I have ordered the transfer of jurisdiction over these two cases to Mumbai. 15. Pursuant to the directions of this court an affidavit-in-opposition has been affirmed on behalf of the respondent by one Bishnupada Chandra, being respondent No. 2. 16. The only reason disclosed in the affidavit-in-opposition appears to be the finding of the search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once an order was passed transferring the case file of an assessee to another area, a great deal of inconvenience and even monetary loss was involved. Therefore, before making an order of transfer the Legislature had imposed the requirement of a show-cause notice as also recording of reasons. The recording of reasons is essential to enable opportunity to the assessee to approach the High Court under its writ jurisdiction under article 226 of the Constitution of India. 25. When an order of transfer under section 127 is passed notwithstanding objection thereto, the order is required to deal with the grounds of objection to the transfer as held by the Punjab and Haryana High Court in the case of Rajesh Mahajan v. CIT [2002] 257 ITR 577 also cited by Mr.Khaitan. Mr. Khaitan also cited the common judgment of a Division Bench of the Allahabad High Court in the case of R. K. Agarwal v. CIT [2006] 283 ITR 532 and two other similar writ applications reported in R.K. Agarwal v. CIT [2006] 283 ITR 532 (All) where an order of transfer was set aside inter alia on the ground that the denial of the assessee concerned had not been considered and there was no evidence of connection of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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