TMI Blog2006 (5) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2 The petitioner is a public limited company incorporated at Delhi having its head office at Delhi at 159, Bhagirath Palace, Chandni Chowk, Delhi. Its registered office is at 85, HPSIDC Industrial Estate Baddi (HP), which is now in the process of being shifted back to Delhi vide special resolution dated January 28, 2006, passed by the board of directors. The petitioner- company used to file its income-tax returns at Delhi from the assessment year 1993-94. The tax audit reports were also filed in time with the Deputy Commissioner of Income-tax, Circle 9(1), New Delhi. Due to administrative reasons the registered office of the company was shifted to Baddi, District Solan, Himachal Pradesh on July 28, 2000. The petitioner is having its factories, offices at Himachal Pradesh, Delhi, Haryana, Punjab, Jammu and Kashmir, Chandigarh. It has corporate office only at Chandigarh. The petitioner has already assessed to tax at Delhi for the last 13 years and the jurisdiction has never been transferred to any other place. 3 According to the respondent, the assessee had not filed its return either in Delhi or Chandigarh under section 133A of the Income-tax Act, 1961, (hereinafter refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head office and the registered office is at Delhi and Baddi, District Solan only. (d) The company has been continuously assessed at Delhi since the assessment year 1993-94 till date, the tax audit report up to the assessment year 2005-06 and returns of income have been filed at Delhi and, therefore, there was no justification/cause to shift the assessments of the petitioner to any other place other than Delhi. (e) No business activities were being carried out from Chandigarh except that of co-ordination with the business associates in India and abroad and it was only a facilitating office. (f) The entire accounts department of the company was at Delhi and the tax consultants were also located at Delhi. (g) That apprehension was also expressed by the petitioner that they would be subjected to arbitrary and capricious assessments at the hands of Assessing Officer at Chandigarh." 6 An order under section 127 of the Act transferring the case of the petitioner to the Deputy Commissioner of Income-tax, Circle-I(1), Chandigarh, was passed by the Commissioner of Income-tax, Circle-3, New Delhi, effective from February 10, 2006. The sole reason given for the transfer reads, "ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Deputy CIT, Circle-I(1), Chandigarh, started sending notices to further pressurise the petitioner-company. An affidavit sworn by Mr. Rajeev Goyal has also been filed with the writ and it is alleged that the Commissioner of Income-tax III has pinned great importance with the statement of the managing director. As a matter of fact, the managing director categorically stated that the head office of the company has been at Delhi since its inception and the income-tax returns have always been filed in Delhi. The managing director also stated that the office at Chandigarh was only a coordinating office and no manufacturing activities is carried out there. It is pointed out that the transfer order cannot be passed on his statement. 10 The sole reason in the transfer order that it was passed due to administrative convenience, finds no place in the proposed reasons for the transfer of jurisdiction from Delhi to Chandigarh. The files were transferred to Chandigarh without giving any time or opportunity to the petitioner to make an appeal against that order. Immediately upon a transfer the Deputy CIT, Circle I(1), Chandigarh, issued notice for appearance to the petitioner in haste a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t where natural justice is violated issue of writ may be a useless formality only where: (a) no other conclusion is possible on admitted or indisputable facts, or (b) there is no real prejudice, Learned counsel has also cited Ajantha Industries' case [ 102 ITR 281 (SC) and Union of India v. E. G. Nambudiri [1991] 3 SCC 38. 14 It was also pointed out that procedural fairness is totally lacking because the statement of the managing director which is the foundation for the transfer order was furnished only on March 27, 2006, on the directions of this court. It was submitted that the reasons for transfer were furnished for the first time in the counter-affidavit filed on March 24, 2006. No explanation is forthcoming as to why the reasons were not given or the order was not served on the petitioner. Counsel for the petitioner has referred to a decision in Ridge v. Baldwin [1963] 2 All ER 66 (HL). 15 The last submission made by learned counsel for the petitioner was the in Union of India v. H. P. Chothia [1978] 2 SCC 586, it was held that "reasons which need to be furnished in the order cannot be furnished by way of counter-affidavit". 16 After marshalling th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose to take action against him. It is thus clear, specific and unequivocal that the reasons were mentioned by the transferring authority. 18 Besides the statement of Rajiv Goyal there are further factors which go to support this conclusion, viz., the petitioner had obtained certificate of export from Chandigarh. It had a website wherein it only advertises its corporate office at Chandigarh and refers to no other office etc. Again the assessee did not co-operate during the year 2003-04 and the Department had to levy the penalty under section 271(1)(b) of the Act. 19 Transfer notice was given after the statement of Rajiv Goyal was recorded on November 30, 2005, on January 19, 2006. The board of directors in their meeting held on January 28, 2006, took the decision to shift back the registered office to Delhi from Himachal Pradesh in order to have better interactive facilities to interact with business houses in India and abroad. "Was it a deliberate attempt to thwart the proposed transfer proceedings" 20 Now, I advert to the question of service of the transfer order. The records submitted by the petitioner itself goes to show that the transfer order was passed on Februar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proposed transfer of their cases, the petitioners had submitted their objections in writing. Further, the petitioners were informed that they could appear personally before the Board on a particular date and there was nothing on the record to show why the petitioners could not appear before the Board on that day or whether they had asked for any other date for appearing before the Board. Moreover, the order of the Board stated that the transfer was effected to facilitate co-ordinated investigation along with other connected cases. Therefore, it could not be said that the reasons for the transfer had not been recorded in the order of transfer. The fact that in the order of the Board, the Board had not giver any reasons for rejecting the submissions contained in the objections filed by the petitioners was of no consequence inasmuch as the submissions did not deal with or controvert the reasons that had been disclosed in the notice for the proposed transfer. Therefore, the transfer of the cases of the petitioners from the Income-tax Officer, Jaipur, to the Income-tax Officer, Bombay, was valid." 26 This is clear that the petitioner's assumptions are all wet. The writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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