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2016 (8) TMI 167

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..... at to ITO, Ward No.3(2)(2), Ahmedabad and (iii) petitioner of SCA No.4475 of 2016 is ordered to be transferred back from the office of DCIT,Central Circle-3, Surat to ITO, Ward No.3(3)(4), Ahmedabad and the respondent No.1 authority is directed to proceed with the same from the stage from where it may have presently reached. Rule made absolute in each matter. - SPECIAL CIVIL APPLICATION NO. 4473 of 2016 TO SPECIAL CIVIL APPLICATION NO. 4475 of 2016 - - - Dated:- 29-7-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : UMAIDSINGH BHATI, ADVOCATE FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE, MR.VARUN K.PATEL, ADVOCATE CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE A.J. SHASTRI) 1. These petitions are having identical set of circumstance as well as challenge contain therein is also almost similar, the petitions are being dealt with by this common judgment and order by treating SCA No.4473 of 2016 as a lead matter. 2. The petition being SCA No.4473 of 2016 is filed for the purpose of challenging legality and validity of an order dated 6.1.2016 passed in exercise of powers under Section 127(2) of the Income-Tax Act,1961 as also notices d .....

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..... respondent No.1 on 21.12.2015 itself. As the request for adjournment was made, the authority, namely, respondent No.1 has placed the matter for personal hearing on 23.12.2015 at 3.00 p.m. It was contended in the written submissions dated 21.12.2015, interalia, that the transfer of her case from Ahmedabad to Surat is not justified as there is no justifiable reasons for such proposed transfer. It was also submitted that even on the basis of coordinated investigation and assessment, the object of making such centralized investigation may not be achieved as the cases of one group are scattered at a different place before different assessing officer. While making such request, the petitioner has submitted that she has no connection of whatsoever nature or in any way related to said group, namely, M/s.HVK International Group, Surat rather she heard the name of this group for the first time. It was also asserted by her in the reply that there is not a single transaction either financial or accounting with the aforesaid group nor the petitioner had any transaction either in the diamond, jewelery or even immovable property with the said M/s.HVK International Group, Surat. It was brought to .....

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..... Section 153(2) of the Income-Tax Act calling upon the petitioner to furnish returns of income for the assessment year 2009-2010 to 2014-15. In view of this development took place abruptly, the petitioner finding it not proper that her case be transferred from Ahmedabad to Surat on the premise on which it is transferred, left with any other alternative the petitioner has filed the present petition challenging the legality and validity of the judgment and order dated 6.1.2016. 5. Mr.Umaidsingh Bhati, learned counsel appearing on behalf of petitioner has contended that transferring the case of the petitioner is patently illegal and contrary to the provisions, more particularly in view of the fact that there is no cogent material which would remotely link the petitioner with M/s.HVK International Group, Surat. It was brought to the notice of the Court that even after extensive search at the premises of the husband of the petitioner on 9.10.2014 as well as on the next day i.e. on 10.10.2014, no material is found which would link the petitioner with M/s.HVK International Group, Surat. Even the husband had also no linkage in any manner with M/s.HVK International Group, Surat. It was al .....

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..... isions have been pointed out in the said representation dated 21.12.2015 and it is brought to the notice that simply because for the sake of administrative convenience in the absence of any material of any nature, to create a linkage, the authority cannot transfer the case of the petitioner under the guise of effective and coordinated investigation and assessment. Learned counsel has also submitted that this is nothing but a gross misuse of the powers at the behest of authority and requested the Court not to allow such irregular exercise of power to operate. It was also contended that even the order impugned in the petition dated 6.1.2016 reflects no reasons which would justify even an application of mind before passing the order by the authority. It was submitted that the reasons are part and parcel of principles of natural justice and therefore, since the order in question is not supported by any cogent reasons, same being treated as violative of principles of natural justice. On the basis of such submissions, learned counsel for the petitioner has submitted that not to allow such impugned order to operate and the petitioner may not be put to unnecessary harassment or coercive pr .....

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..... mitted that the premises in question was utilized as a business premises of M/s.Brillare Realty Pvt. Ltd. in which the directors/shareholders of M/s.HVK International Group, Surat are also connected directors and one of the directors is Shri Sanjay Dhanak and therefore, having found that there is some possibility of live linkage of the petitioner with M/s.HVK International Group, Surat, the authority has rightly exercised the jurisdiction of transferring the case. Learned counsel also contended that adequate opportunity of hearing has been afforded to justify that exercise of power and therefore, same is not vitiated and ultimately, requested the Court not to interfere with the said order which is passed in exercise of statutory power. 7. Mr.Sudhir Mehta, learned counsel appearing on behalf of respondent No.2 authority has submitted that exercise of power is just and proper and ultimately if the said exercise is undertaken keeping in view the object of achieving effective and coordinated investigation and assessment and therefore, for the purpose of making such effective assessment, power under Section 127 of the Act is exercised and therefore, requested the Court not to interfe .....

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..... eneral or ] Directors General or [ Principal Chief Commissioners or ] Chief Commissioners or [ Principal Commissioners or ] Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such [ Principal Director General or ] Director General or [ Principal Chief Commissioner or ] Chief Commissioner or [ Principal Commissioner or ] Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or subsection (2) may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. .....

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..... d issue. Having not done so, the very exercise of jurisdiction is vitiated, suffers from the vice of non-application of mind and since the reasons are not reflected at all, this Court is of the opinion that the order cannot be said to be in consonance with the compliance of principles of natural justice and therefore, deserves to be struck down on this ground alone. 10. Apart from the consideration of a reasonable opportunity concept, even the material on record is also not sufficient enough to link the petitioner even remotely with the said group, namely, M/s.HVK International Group, Surat. Even if we recall in a cognate petition being SCA No.4755 of 2016 in case of Lalabhai Kamabhai Bharwad arising out of the very same search operation, a detailed questionnaire was put by the authority in which also nothing incriminating found of any nature which would even prima facie establish the linkage of the petitioner with M/s.HVK International Group, Surat. On the contrary, only one thing has emerged from the material on record that except the purchase of flat by the husband of the petitioner from said Shri Sanjay Dhanak, who happens to be a builder and constructed the scheme, there is .....

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..... ng out from the same proceeding), even a certificate came to be issued by said M/s.HVK International Group, Surat dated 3.12.2015 wherein, it has been categorically stated that there is no connection of any nature or any financial transaction with the petitioner. Said certificate is very much part of the record of said cognate petition and to deal with, we may refer the specific stand taken by said M/s.HVK International Group, Surat. Learned counsel appearing for the respective parties have not disputed against relevance of the said certificate. Relevant extract of the said certificate reads, thus; We are hereby declaring that our group or its Directors, or Share Holders or any family members of the same did not have any business or financial transaction or connection with Shri Lalabhai Kamabhai Bharwad or his family members viz. Smt.Anuben Lalabhai Bharwad, Shri Ashok Lalabhai Bharwad and Shri Pintoo Lalabhai Bharwad in past or present. 13. Even a specific letter also in the form of an affidavit filed by Shri Sanjay Dhanak, from whom a flat has been purchased by the husband of the petitioner and said Shri Sanjay Dhanak has filed an affidavit on oath wherein also, he has cl .....

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