TMI Blog2021 (4) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... s also . In view of the aforesaid, the present writ application and all other connected writ applications fail and are hereby rejected. The interim relief earlier granted stands vacated forthwith. - R/SPECIAL CIVIL APPLICATION NO. 20409, 20410, of 2019, 20414, 20418, 20427, 20428, With CIVIL APPLICATION (FOR VACATING INTERIM RELIEF) NO. 1 of 2021 - - - Dated:- 10-3-2021 - HONOURABLE MR. JUSTICE J.B. PARDIWALA AND HONOURABLE MR. JUSTICE ILESH J. VORA Appearance: MR TUSHAR HEMANI, ADVOCATE WITH MS VAIBHAVI K PARIKH (3238) for the Petitioner(s) No. 1 MR MR BHATT SENIOR COUNSEL WITH MRS MAUNA M BHATT (174) WITH MR KARAN SANGHANI, ADVOCATE for the Respondent(s) No. 1 COMMON ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. Since the issues involved in all the captioned writ applications are the same, those were taken up for hearing analogously and are being disposed of by this common judgement and order. 2. For the sake of convenience, the Special Civil Application No.20409 of 2019 is treated as the lead matter. 3. By this writ application under Article 226 of the Constitution of India, the writ applicant (assessee) has prayed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dahyabhai Bhurabah Rabari and few other persons. Thus, the notice was issued under a mistaken belief and hence, no further action was required in relation to such notice; ➢ All the assessees covered under the survey action were assessed in the same range (I.e. Gandhidham ). Hence, the case of the Petitioner as well as other persons automatically stood centralized with the Assessing Officer based in Gandhidham ; ➢ The cases were proposed to be transferred to an Assessing Officer of the Central charge Who was an officer of the same rank and hence, the Assessing Officer based in Gandhidham (who already had common jurisdiction over all the concerned assesse) could very well carry out coordinated investigation; ➢ The Petitioner further proposed that if necessary, cases may be assigned to the Additional CIT, Gandhidham who was superior in rank and could achieve the object of centralization; ➢ The proposed action of transferring the cases from Gandhidham to Rajkot was in violation of the CBDT s instruction No. 8/ 2002 dated 14.08.02; ➢ The Petitioner had very minimum business transactions with Shree Ganesh Handling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferring the case of the Petitioner and five other assessees to the JCIT, Gandhidham Range, Gandhidham was passed under section 120(4)(b) r.w.s. 2(7A) r.w.s. 127(1) of the Act as against the proposal to transfer the case to the DCIT, Central Circle 2, Rajkot ; ➢ Order under section 127(1) of the Act is a quasi judicial order and hence, the same authority cannot review or recall its own order in absence of any new facts or circumstances; ➢ It being a case of disagreement between two Pr. CITs, the matter can be decided only by higher authority in accordance with the provisions of clause (b) of sub section (2) of section 127 of the Act; ➢ There was no justification for transfer of case of the Petitioner to Rajkot; ➢ Merely stating that generally, range heads (JCIT / Addl. CIT) do not undertake assessment functions cannot be a ground so as to justify the action of transferring the case from Gandhidham to Rajkot especially when five more Assessing Officers are available at the same place; ➢ The petitioner had no objection if the cases were transferred to any particular officer in Gandhidham and if found necessary, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h action under section 132 of the Act has been carried out. Rather, only survey action under section 133A of the Act has been carried out. Hence, such guidelines are absolutely irrelevant for the case of the Petitioner; ➢ In any case, the only reason assigned by the Respondent for invoking jurisdiction under section 127 of the Act is that transfer of case is essential for the purpose of effective and co ordinated investigation . However, the Respondent failed to appreciate that only those cases which are connected with search under section 132 of the Act are to be centralized for effective and co ordinated investigation . The case of the Petitioner is not at all connected with any sort of search under section 132 of the Act . Rather, it was a case of survey under section 133A o the Act . Hence, it is not mandatory to centralize the case of the Petitioner for the purpose of effective and co ordinated investigation . Under such facts and circumstances, it was incumbent upon the Respondent to assign further reasoning for transferring the case of the Petitioner, which has not been done in the present case by the Respondent herein. 9. Mr. Hemani further submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venience would be caused to an assessee if his assessment is lifted from his principal place of business and is put at the disposal of the Assessing Officer based at a far away place. He would submit that the power may be exercised in proper cases when sufficient material is there on record so as to justify such an act. He also submitted that it is a settled legal position that the reasons for transfer of case of an assessee must be weighty enough to set off against such personal inconvenience caused to such assessee. 13. In the last, Mr. Hemani submitted that as regards the reasoning of the respondent in the impugned order as to the E proceedings i.e. assessments to be completed only Income Tax Business Application (ITBA), it is submitted that the Central Board of Direct Taxes (hereinafter referred to as CBDT for the sake of brevity), vide instruction No.03/2018 dated 20th August 2018 in relation to Eassessment, has carved out certain exceptions wherein E proceedings shall not be mandatory one of which is in relation to assessment which is to be framed under Section 147 of the Ac. It is submitted that the case of the writ applicant is very well covered in the exceptional cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. In the impugned order, it has been noted that during the course of survey at the premises of the writ applicant, substantial data was found and impounded which revealed that the writ applicants, who are contractors and sub contractors had indulged in huge cash transactions with each other and the same required coordinated and effective investigation. Opportunity of hearing was also granted. In para 4 of the impugned order, reference has been made to the various impounded material to come to a conclusion that there was a need for coordinated and effective investigation. The objections raised by the writ applicant were duly considered in para 6 onwards of the impugned order. Further, a reference has also been made to the incriminating material which demonstrated bogus / accommodation entries / bills provided by the sub contractors. In para 6.5, it has also been noted that all the income tax assessments were conducted through E mail and therefore, there was no question of any prejudice being caused to the writ applicant. The aspect of alleged review has been considered in para 6.6 of the order. It is noted that in view of the E assessment procedure, the assessment can be completed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the impugned order of transfer under Section 127(2) of the Act. 23. Section 124 of the Act pertains to the jurisdiction of the Assessing Officer. Sub section (1) of Section 124 reads as under : 124(1) Where by virtue of any direction or order issued under subsection (1) or sub section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and (b) in respect of any other person residing within the area. 24. Section 127 of the Act pertains to the power to transfer cases. It reads as under : 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 possi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation .-In section 120 and this section, the word case , in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of 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. 25. Section 124(1) of the Act lays down the jurisdiction of the Assessing Officer, whereas under sub section (1) of Section 127 of the Act, it is open to the concerned authority to transfer any case of an assessee from one Assessing Officer subordinate to him to any other Assessing Officer or Officers also subordinate to him. This power is hedged by two requirements which are that such order can be passed only after giving the assessee a reasonable opportunity of being heard and recording his reasons for doing so, wherever possible. As per subsection (3) of Section 127 however, the opportunity of hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The third important element of Section 127 is when an assessment is being transferred from one Assessing Officer to another Assessing Officer, both of whom are not subordinate to the same head, the same could be done only with the agreement of the respective heads and if there is no such agreement, only by the Board or the authority that the Board may authorise in this behalf, by issuing notification in the official Gazette. This last requirement would ensure that there is no discordance between the heads of the two Assessing Officers from where the assessment is transferred to where it is being transferred and in case there is a disagreement, such powers can be exercised only by the Board or an officer so authorised by the Board. While we are on the requirement of agreement between the two authorities, as referred to in clause(a) of sub section (2) of Section 127, we may also notice that upon such agreement being achieved, it is the authority from whose jurisdiction the case is to be transferred, has to grant a reasonable opportunity of being heard to the assessee and then pass an order recording his reasons. This requirement would have two significant elements. One is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officers are situated in the same city, locality or place. Sub section (4) of Section 127 provides that the transfer of a case under sub section (1) or sub section (2) may be made at any stage of the proceedings and shall not render necessary the re issuance of any notice already issued by the Assessing Officer from whom the case is transferred. 21. Exercise of power under sub section (1) and subsection (2) of the Act comes with certain procedural requirements namely, of granting a reasonable opportunity of being heard in the matter wherever it is possible to do so, of recording of reasons for passing such order and as provided by the Supreme Court in Ajanta Industries (supra) communicating such reasons also to the assessee. Subject to fulfillment of such procedural requirements, the authority under Section 127 enjoys considerable discretion while exercising the power contained in sub section (1) or subsection (2) thereof. Such discretion of course has to be exercised for achieving the public purpose and not for any arbitrary or irrelevant consideration. On the other hand, it can also be seen that transfer of a pending case from one Assessing Officer to another outside of a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 127 of the Act has not limited the exercise of jurisdiction by specifying any circumstances before the authority can exercise his powers to transfer the case. One more fact which cannot be lost sight of is that an assessee cannot choose his Assessing Officer and, therefore, if the transfer order does indicate some valid reasons to justify the transfer and such reasons are neither perverse or arbitrary or mala fide this Court would not interfere with the reasonable exercise of discretion. 29. The Delhi High Court, in the case of Vishal Kumar vs. Commissioner of Income, reported in (2014) 44 taxmann.com 180 (Delhi), held as under : 10. The assessee also has the opportunity to present his case and be subject to a regular assessment, in front of the Assessing Officer 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. Equally, the showcause notice dated 9.10.2013 granted the petitioner in this case an opportunity of being heard. No oral representation was made by the petitioner on that date, nor was any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is proposed to be centralized to facilitate coordinated and effective investigation is not a mere formality. 6.2 It may be mentioned that huge incriminating material was found against the above mentioned two assessees regarding bogus/accommodation entries/ bills etc. provided by the four labour subcontractors, proposed to be centralized with the same AO. In the statements recorded during survey and post survey, the sub contractors stated that their bank accounts were misused by Shree Ganesh Handling Co. Since the sub contractors accounts, Books etc were misused, the contractors and sub contractors assessments should be assessed with the same AO for assessing the real income and arriving at proper concealed/undisclosed income. In view of the above, it is prudent and desirable to be assessed by same AO, being the DCIT, Central Circle 2, Rajkot for coordinated and effective investigation. 6.3 It has not been elaborated by the assessees as to how the proposed centralization is in violation of CBDT Instruction No.8/2002 dtd.14/8/2002. 6.4 The contention that the proposal for centralization is without proper application of mind, is again mis placed, mis conceived and erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment by the JCIT / AddI. CIT is a thing of the past since the e assessment on ITBA platform does not allow assessment by the Range Head. 33. Considering the position of law, as discussed above and also the other materials on record, we are of the view that we should not interfere with the impugned order of transfer passed by the respondent in exercise of powers under Section 127(2) of the Act. The power of transfer of cases would have to be exercised in proper cases when sufficient materials on record justify such action. As held by this Court, in the case of Hindustan M. I. Swaco Limited (2016) 72 taxmann.com 14 (Guj), this is, however, not to suggest that the transfer of cases for effective investigation and coordination can be resorted to only in cases of assessees, who are subjected to search operation. Such requirement may arise in other circumstances also . 34. In view of the aforesaid, the present writ application and all other connected writ applications fail and are hereby rejected. The interim relief earlier granted stands vacated forthwith. 35. In view of the order passed in the main matters, the connected Civil Applications would also not survive a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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