TMI Blog2016 (5) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... are issued by and under the signature of Deputy Commissioner of Income Tax-II (Headquarters) and not under the signature of Commissioner of Income Tax. We thus find that initiation of proceedings under Section 127 of the Act in the instant cases was not by the Authority competent to do so. It is clear that in the matter of transfer of a case under Section 127 of the Act, it is necessary that the Authority which proposes to transfer the case must, wherever it is possible to do so, give the assessee a reasonable opportunity of being heard with a view to enable him to effectively show cause against the proposed transfer. The notice must also propose to give a personal hearing. It is also necessary to mention in the notice the reasons for the proposed transfer so that the assessee could make an effective representation with reference to the reasons set out. It is not sufficient merely to say in the notice that the transfer is proposed “to facilitate detailed and coordinated investigation”. The reasons cannot be vague and too general in nature, but must be specific and based on material facts. It is again not merely sufficient to record the reasons in the file, but it is also necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l these years, the petitioner nos.1 and 2 are being assessed to Income Tax at Wardha only. No part of activity of the said business is carried on from any place other than Wardha/Sindi (Railway). The petitioner nos.1 and 2 are assessed under the Act by the Income Tax Officer, AWard, Wardha and their assessments are finalized upto 31.3.2002. The return of Income Tax was due to be filed in the month of October 2003. 4) The petitioner no.3 is the elder son of the petitioner no.1. The petitioner no.3 resides at Sindi (Railway) and also at Jodhpur for the purpose of business. The petitioner no.4 is a Hindu Undivided Family of which petitioner no.3 is the Karta. The petitioner no.4 is running its business, namely, manufacture of hydrated lime in the name and style of M/s. Shivam Chemicals at Pipar City. The petitioner no.3 derives income by way of interest from M/s. Shivam Chemicals. The petitioner nos. 3 and 4 are being assessed under the Act since beginning by the Income Tax Officer, A-Ward, Wardha. Their assessments are finalised upto 31.3.2002 and the return of income for the year 2002-03 was due to be filed in the month of October 2003. 5) The Income Tax Department carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as at Pipar City, District Jodhpur. Since beginning, the petitioners are being assessed under the Act at Wardha and since the year 1996 at Nagpur. The assessment of the petitioners is finalised upto 31.3.2002. The father of the petitioner no.1 resides and carries on business at Sindi (Railway), District Wardha. The father of petitioner no.1 controls overall financial and other affairs of Mundra family and all the connected family business concerns. He also attends the Income Tax cases of the petitioners and other family members and family business concerns. 9) The petitioner no.1 derives income by way of interest and his share of profit in the partnership firm, namely, petitioner no.3 M/s. Aditya Chemicals. This firm carries on the business of manufacture of Hydrated Lime and Quick Lime. Raw material that is required for this factory is Lime Stone, which is available at 5 places only in the entire country. These places are Gotan (Rajasthan), which is 40 kms. from the factory, (ii) Dehradun, (iii) Katni, (iv) Veraval and (v) Dronachalam. The quality of lime available at Gotan is very good among the aforesaid five places and, therefore, factory run by the firm M/s. Aditya Chemica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I, Nagpur to A.C.I.T. (Central)-II, Jodhpur under the provisions of Section 127 of the Act. The petitioners by their letters dated 16/4/2003 requested the Department to inform the reasons for proposed transfer of their cases. The Department vide communication dated 16/4/2003 informed the petitioners that their cases are connected with the Mundra Group of Jodhpur and, therefore, for co-ordinated investigation, the cases of petitioners are required to be transferred to Jodhpur. The petitioners then filed their objections to the proposed transfer vide replies dated 22/4/2003. The respondent then by order dated 25/4/2003 ordered transfer of the Income Tax cases of the petitioners from Nagpur to Jodhpur. 12) It is also the case of the petitioners that order dated 25/4/2003 was challenged in Writ Petition No.2359/2003 wherein this Court directed parties to maintain status quo and thereafter on hearing both sides, admitted the petition and continued the interim order. During pendency of the said petition, respondent by his order dated 15/12/2003 withdrew the impugned order dated 25/4/2003, which was assailed in Writ Petition No. 2359/2003, upon which petitioners filed their objections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) where the Directors General or Chief Commissioner or Commissioners aforesaid are not in agreement, the order transferring the case may similarly be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette authorise in this behalf. 15) From the aforesaid provisions, it is clear that power to transfer cases from jurisdiction of one Assessing Officer to other vests in the Commissioner of Income Tax. The said provisions require an opportunity of hearing to be given to the assessee. It is also necessary that the show cause notice should contain reasons why transfer of cases is required to be made by the competent Authority and there is no provision for delegation of power by the Commissioner of Income Tax to issue such transfer order to any other Officer as such. It was absolutely necessary as requirement of law that the show cause notices issued to the petitioners had to be under the signature of Commissioner of Income Tax. However, show cause notices involved in the petitions are issued by and under the signature of Deputy Commissioner of Income Tax-II (Headquarters) and not under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 220 (Bombay), Shyam Company vs. Commissioner of Income Tax and another {(1991) 192 ITR 387 (Allahabad) and Benz Corporation vs. Income Tax Officer and others {(1998) 232 ITR 807 (Kerala). 18) Shri Parchure, learned Counsel for the respondents, has resisted the petitions contending that petitioner no.1 has residence at Sindi (Railway), but he is also residing at Pipar city along with his sons. Although he is one of the partners in petitioner no.2 firm, other two partners of the petitioner no.2 firm are his daughters-in-law Smt. Vidya Nand Kishore Mundra and Smt. Asha Sudhir Mundra, both of whom reside at Jodhpur along with their husbands. The petitioner no.1 keeps his main assets like jewellery, etc. at Jodhpur in the residence of his son Shri Nand Kishore Mundra. It is contended that petitioner no.1 does not control all businesses and overall financial and other affairs of the family from Sindi (Railway). On the other hand, it has been found that even the affairs of the petitioner no.1 are controlled and carried out from Jodhpur. It is further submitted that payment to the Public Provident Fund Scheme from the account of petitioner no.1 has been made at Jodhpur and self a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, are carried out at Jodhpur only. Hence, the Authority at Jodhpur only has jurisdiction in respect of petitioner nos.3 and 4. 21) So far as Writ Petition No.1455/2004 is concerned, it is contended by learned Counsel for respondents that a search and seizure operation was carried out in the cases of M/s. Mundra group of Pipar city/Jodhpur on 20/12/2002. The Mundra group consists of Shri Ramswaroop Mundra and his sons Shri Nand Kishore Mundra and Shri Sudhir Mundra along with their family members. During the course of the search and seizure action under Section 132 of the Act, it was found that most of the members of the Mundra group and their family members are having a permanent residence at Pipar city/Jodhpur. It was also found that books of accounts of all the assessees were at Pipar city/Jodhpur. It was also found that the sources of income in respect of the individual assessees mostly fall within the jurisdiction of the Commissioner of Income Tax, Jaipur. The respondent has received information in respect of the petitioners' activities at Pipar city/Jodhpur from the Deputy Director of Income Tax, Jodhpur. 22) It is also contended by learned Counsel for the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eadquarters) on behalf of the Commissioner of Income Tax. The show cause notice itself states that the signature by the said Officer is for and on behalf of the Commissioner of Income Tax. There is no requirement under law that the show cause notice must be signed by the Commissioner of Income Tax himself. It is the established procedure in the office of respondent that all such notices are signed on behalf of the respondent by a senior Officer deputed in this regard. 26) It is thus submitted that there are no defects in the impugned orders issued under Section 127 of the Act as same are speaking orders with reasons for transfer of cases to Jodhpur, which also establish necessity of centralizing all cases of petitioners for facilitating coordinated and systematic investigation. In support of his contentions, learned Counsel for respondents has relied upon judgments in Jharkhand Mukti Morcha vs. Commissioner of Income Tax {(1997) 95 Taxman 132 (Patna) and Aamby Valley Ltd. vs. Commissioner of Income Tax-8 {(2014) 41 taxmann.com 15 (Bombay)}. 27) Having considered the provisions of Section 127(1) of the Act and submissions as aforesaid, we find that it was absolutely necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ward Wardha to ACIT, Central Circle-2, Jodhpur apart from expressing necessity to centralize all the cases of petitioners for facilitating coordinated, systematic and centralized investigation, the only reason put forth is that the Commissioner of Income Tax, Central, Jaipur has no objection to transfer of cases to Jodhpur. In that view of the matter, it is noted that there is lack of agreement between two competent Authorities as required under the statutory provisions. Similarly, before passing impugned order dated 28/1/2004 challenged in Writ Petition No. 1455/2004 transferring petitioners' cases from ACIT Circle-I, Nagpur to ACIT, Central-II, Jodhpur, it is noted that same came to be passed even without issuing show cause notices to petitioner nos.2 and 3 therein. 28) On considering facts involved in these petitions together with provisions of Section 127(1) and (2) of the Act, it is noted that as per these provisions, transfer of case can be effected only if the Commissioner of Income Tax, Jaipur requests for transfer. However, in these petitions, no such request appears to have been made by the said Authority of Jaipur, but the request is made by Deputy Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as an agreement between Commissioners of Income Tax, New Delhi and Mumbai as required in terms of Section 127(2)(a) of the Act, the objection does not sustain. 30) As such, we find that for the purpose of effecting transfer of cases from jurisdiction of one Commissioner to other, requirement is agreement between two Commissioners for effecting transfer of cases, which aspect is lacking in the impugned orders. 31) In all the cases as referred in para (17) relied on by learned Senior Counsel for the petitioners, it is clear that in the matter of transfer of a case under Section 127 of the Act, it is necessary that the Authority which proposes to transfer the case must, wherever it is possible to do so, give the assessee a reasonable opportunity of being heard with a view to enable him to effectively show cause against the proposed transfer. The notice must also propose to give a personal hearing. It is also necessary to mention in the notice the reasons for the proposed transfer so that the assessee could make an effective representation with reference to the reasons set out. It is not sufficient merely to say in the notice that the transfer is proposed to facilitate detailed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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