TMI Blog2013 (3) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... m Pune to Mumbai was passed by the Commissioner of Income Tax(Central) Pune on 2/8/2012. Thus there was sufficient time to grant a personal hearing to the Petitioner after the issue of the show case notice and before the passing of the impugned order 2/8/2012. Neither at the hearing nor in the affidavit in reply the respondent-revenue have contended that it was not possible to grant a personal hearing to the Petitioner. At the hearing the Respondent Revenue did not assert that any personal hearing was granted to the petitioner before the passing of the impugned Order dated 2/8/2012. The facts in the present case particularly the conduct of the Petitioner, is completely distinguishable as in impugned order of transfer passed on 2/8/2012 received by the Petitioner on 30/8/2012. The Petitioner filed the present petition on 11/10/2012 and moved this court for the first time on 23/10/2012. The Respondent thereafter sought time to file their affidavit in reply and the same though dated 14/12/2012 was filed on 13/2/2013. Thereafter this petition was adjourned from time to time and the matter was heard only on 25/2/2013 and 27/2/2013. In these circumstances, no complaint on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was informed that consequent to the search proceedings conducted in respect of one Uday Namdeo Salunke on 20/11/2010 all cases belonging to the Salunke group were centralized with the Dy. Commissioner of Income Tax, Central Circle-12, Mumbai. It was thereafter suggested by the Assessing Officer (Dy. Commissioner of Income Tax, Central Circle-12, Mumbai) that the cases pertaining to the Petitioner be centralized with him for the purposes of co ordinated investigation. In view of the above, the Petitioner was called upon to show cause to the proposed transfer on or before 15/2/2012. d) On 8/2/2012 itself, the Petitioner responded to the show cause notice dated 8/2/2012 objecting to the transfer of its case from Pune to Mumbai. The Petitioner pointed out that since its inception its head office is at Pune and the meetings of the Petitioner also takes place at Pune. Further almost all of its 63 educational institutions are situated in and around Pune, save and except 6 institution which are in Mumbai. Returns under varied Acts are filed before the various authorities in Pune. Account of the Petitioner is maintained and audited in Pune. Thus, transfer of their case from Pune to Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. J. D. Mistri, Senior Advocate in support of the Petition submits as under:- a) The impugned order dated 2/8/2012 is bad in law as no personal hearing was granted to the Petitioner before passing the impugned order under Section 127(2) of the Act. An order under Section 127(2) of the Act has to be preceded by a personal hearing as held by this Court in its order dated 12/9/2012 passed in Writ Petition No.596 of 2012 (Sahara Hospitality Ltd. v. Commissioner of Income Tax-8 and others). b) The impugned order dated 2/8/2012 is in breach of principles of natural justice inasmuch as the notice dated 8/2/2012 given to the Petitioner proposing the transfer was an inadequate notice in as much as the various circumstances and reasons which would warrant transfer of the Petitioner' case from Pune to Mumbai were not spelt out in the notice though the same are found extensively in the impugned order. Therefore, according to him, if proper and adequate notice was served upon the Petitioner a proper representation could have been made and it is likely that in that case no order of transfer under Section 127(2) of the Act may have been passed by the Commissioner of Income Tax, Pune. Thus, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he searched person Salunke was completed. This was possible as the assessing officer is presently the same at Mumbai for Salunke group and the Petitioner. In case the jurisdiction of the Petitioner is restored to Pune jurisdiction then the notice under Section 153 C of the Act can only be issued after Assessment of the searched person i. e. Salunke is completed. This would delay the proceeding and cause prejudice to the revenue. 7. We have considered the submissions. It is a settled position in law as held by this Court in the matter of Sahara Hospitality Ltd.(supra) that before an order of transfer of case is passed under Section 127(2) of the Act, an opportunity of personal hearing is mandatory, wherever it is possible to do so. In the present matter the show cause notice proposing the transfer of the Petitioner's case from Pune to Mumbai was issued by the office of the Commissioner of Income Tax (Central) Pune on 8/2/2012. The Petitioner responded to the notice stating its objections to the proposed transfer on 8/2/2012 itself. The impugned order of transfer of the Petitioner case from Pune to Mumbai was passed by the Commissioner of Income Tax(Central) Pune on 2/8/2012. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd transferred to Delhi. However, so far as the other years are concerned, the order was set aside and the Commissioner of Income Tax was directed to give personal hearing to the petitioner before passing an order of transfer under Section 127(2) of the Act. However, the facts in this petition, particularly the conduct of the Petitioner, is completely distinguishable. The impugned order of transfer was passed on 2/8/2012 and the same was received by the Petitioner on 30/8/2012. The Petitioner filed the present petition on 11/10/2012 and moved this court for the first time on 23/10/2012. The Respondent thereafter sought time to file their affidavit in reply and the same though dated 14/12/2012 was filed on 13/2/2013. Thereafter this petition was adjourned from time to time and the matter was heard only on 25/2/2013 and 27/2/2013. In these circumstances, no complaint on account of the conduct of the Petitioner can be made as it had moved the Court with reasonable expedition unlike in the case of Aamby Valley(supra). Therefore in the present petition it cannot be said that the normal assessment for the assessment year 2010-11 is getting time barred in view of the delay on the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above circumstances it appears to us that no personal hearing was granted to the Petitioner before passing the impugned Order dated 2/8/2012. 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 passing an order under Section127(2) of the said Act. 12. In any view of the matter, the entire proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quota is in following two stages. a) Profile of the students are collected and analyzed by the institutes and b) The list is submitted to the Managing Council of the Shikshan Prasaraka Mandali Trust for decision regarding admission. The admission committee comprises of Chairman, Local Managing committee of the Institute and Members of the Managing Council of M/s. SPM Trust, Pune. (ii) During the curse of search in the case of Shri. Uday Namdeo Salunke Director of Welingkar Institute of Mumbai, evidences indicating receipt of donations for admissions under management quota in the institutions being managed by the assessee Trust have been found. Prof. Samir Karkhanis was confronted with the evidences. He stated that the figures on the paper are donation fees received from the students whose names are also recorded therein. (iii) Institutions charging donations against the admissions are located in Mumbai and are managed by the assessee Trust. (iv) The ultimate beneficiary of the donations received is the assessee trust and its trustees. (v) Shri. Abhay Dadhe, Chairman and Shri. A. N. Mate Vice Chairman of the Managing Council of SPM Trust, Pune in their statements recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atic that unless a party is informed of the reasons for the proposed action, it would be impossible for the noticee to put forth its point of view with regard to the reasons for the proposed action. The views of the noticee are to be considered by the authority before taking any decision to confirm or drop the notice. A show cause notice to be effective must be adequate so to enable a party to effectively object/respond to the same. The authority concerned is obliged to consider the objections, if any, and thereafter reach a finding one way or the other. This alone ensures absence of arbitrary exercise of powers by the authorities. Thus, there has been failure of Audi Alteram Partem Rule and the case of the Petitioner has been transferred in breach of natural justice de hors the non giving of personal hearing to the Petitioner. In that view of the matter also the order dated 2/8/2012 passed by the respondent cannot be sustained. 16. Mr. Vimal Gupta Senior Counsel for the Respondent- Revenue also submitted that the Assessing Officer at Mumbai being the same for the searched person i.e. Salunke group and the Petitioner the proceedings can be commenced under Section 153C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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