TMI Blog2007 (2) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... roughout. 2. Briefly stated the facts giving rise to the present writ petition are as follows : According to the petitioner it is engaged in manufacture of Stainless Steel Billets, Flat Wire Rods, etc. in its factory situated at Bharua Sumerpur, District Hamirpur. It is a Public Limited Company incorporated under the provisions of the Companies Act, 1956 and has its registered office at 123/355, Fazalganj, Kanpur. According to the petitioner it is also engaged in undertaking the work of liaisoning with public offices and other incidental activities. It had rendered services to M/s. Radico Khaitan Ltd. and was paid a sum of ₹ 8.43 crores during the financial years 2002-03 to 2004-05. M/s. Radico Khaitan Ltd. while making the payment also deducted tax at source is being assessed to income-tax. The assessments for the assessment years 2003-04 (financial year 2002-03) and 2004-05 (financial year 2003-04) have been made under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). According to the petitioner the amount received from M/s. Radico Khaitan Ltd. has been disclosed in the return filed by it for the relevant assessment year. The assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel to obtain instruction regarding Annexure-8 which is a letter sent by the Commissioner of Income-tax (Central)-III, Delhi to the respondent No. 1 in which the Commissioner of Income-tax (Central)-III, Delhi had given the reasons for transferring the cases. The matter was directed to be placed before the Court on 12-2-2007. Sri A.N. Mahajan after obtaining instruction has placed before the Court the letter dated 15-11-2006 sent by the respondent No. 1 to the Commissioner of Income-tax (Central)-III, Delhi by which he had sought some more material for passing the order of transfer. The Annexure-8 is the letter sent in reply to the letter dated 15-11-2006. 6. We have heard Sri Ravi Kant, learned senior counsel, assisted by Sri R.R. Kapoor, learned counsel appearing for the petitioner and Sri A.N. Mahajan, learned standing counsel appearing for the respondents. 7. Sri Ravi Kant, learned senior counsel submitted that the notice dated 10-11-2006 issued by the respondent No. 1 proposing to transfer the cases of the petitioner from Kanpur to New Delhi did not mention the grounds on which the proposed transfer was to be made, in the absence of which the petitioner was not aware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as raised herein, he has relied upon the following decisions : 1.Bansal Sharevest Services Ltd. (No. 2) v. CIT 2006 UPTC 992; 2.Radico Khaitan Ltd. v. CIT 2006 UPTC 1202; 3.Virendra Kumar Jain v. CIT [2006] 283 ITR 5412 (All.); 4.Trimurti Fragrances (P.) Ltd. v. CIT [2006] 283 ITR 5473 (All.). 9. Having given our anxious consideration to the various pleas raised by the learned counsel for the parties we find that under section 120 read with sub-section (1) of section 124 of the Act the Assessing Officer has been vested with jurisdiction over any area, where any person carrying on the business or profession is situate or resides. However, under section 127 of the Act power to transfer cases have been given to various authorities. Under sub-section (2) of section 127 of the Act in case where the Assessing Officer from whom the case is to be transferred and the Assessing Officer to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner in that event with the concurrence of the respective Director General or Chief Commissioner or Commissioner to whom the Assessing Officers are subordinate the case can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f account, the enquiries to be made by the Income-tax Officer and the whole of the procedure as to assessment including the further appeals after the assessment is made by the Income-tax Officer are the same in a transferred case as in others which remain with the Income-tax Officer of the area in which the other assessee reside or carry on business. There is thus no differential treatment and no scope for the argument that the particular assessee is discriminated against the reference to other similarly situated. 11. In the case of Pratabpur Co. Ltd. (supra) the Apex Court has held that the Executive Officer entrusted with statutory discretion may in some cases be obliged to take into account considerations of public policy and in some context the policy of a Minister or the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve them from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for them to be given binding instructions by a superior. 12. In the case of Ajantha Industries (supra) the Apex Court has held that the requirement of recording reasons under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that the various objections raised by the petitioners have not be dealt with in the transfer order. 17. In the case of R.K. Agarwal (supra) this Court has held that no prejudice will be caused to the Department if the precise reason is disclosed to show that the authority did apply his mind to the material on record or infor- mation available on the basis of search and seizure operations, giving a link to the fact that the assessee has some connection or association and by making a mention of the said fact in the transfer order. This is more so necessary to show that the authority exercising its statutory power of transfer had actually gone through the record and applied its mind before passing the impugned order of transfer and that the power to transfer cases is not exercised mechanically. If the Department remains silent it will frustrate the whole object of the statutory provisions that transfer should be passed mala fide or arbitrarily or on irrelevant/extraneous considerations. 18. In the case of Bansal Sharevest Services Ltd. (No. 2) (supra) this Court after considering various judgments of the Apex Court had laid down the parameters for any interference b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The extent of reasons which should find placed in an order, in which reasons are required to be recorded, depends upon a variety of reasons such as the nature of the order, the extent and nature of the petitioner s rights which are effected thereby, the issues involved or the contentions raised or required to be considered, etc. There cannot be any rigid and/or absolute inflexible rule with regard to this. ****** 14. Again, the extent of details to be mentioned in the show-cause notice necessarily depend upon a variety of factors such as the allegations made, the proposed action, etc. As a thumb rule while judging the validity of a show-cause notice on this score it has to be seen whether on account of the lack of the detail, the petitioner has been prejudiced due to inability to give proper defence. 15. In our opinion, this simple matter where 23 cases relating to the petitioner s group were proposed to be brought to one place for coordinated investigation did not require any further or better or more detailed reasons. ****** 17. We are unable to sustain even this argument. The purpose of the transfer is quite obvious and in accordance with the normal procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a group of persons, common family members, business concerns having close interaction, and above all one of them resides at Delhi; one of the directors/partners himself, admits that heavy cash amount was recovered from his premises at Delhi belongs to his father at Kanpur and that out of 26 cases of the same group in question, 16 cases were assessed at Delhi. 23. In the instant case, this Court takes notice of the fact that otherwise also the distance between Kanpur and Delhi can be covered within a few hours and that the persons involved are already having their business transactions and activities between Kanpur and Delhi. The inconvenience projected by the assessee in question cannot be said to be of that magnitude which could prevail over other relevant considerations. (p. 557) 23. From the aforesaid decisions the following position emerges : The assessee has to be assessed by an officer who has been vested with jurisdiction over an area where the persons carries on a business or profession under section 124(1) of the Act. The exigencies of the tax collection may require the Income-tax Authorities to transfer the case of a particular assessee from the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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