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2016 (11) TMI 540 - DELHI HIGH COURT

2016 (11) TMI 540 - DELHI HIGH COURT - TMI - Transfer of cases - lack of reasons - Held that:- The substantiality of prejudice for lack of reasons or otherwise has to be independently considered given the fact of each cases. In the present case it is not as if the notice did not contain the reasons at all. The assessees’ contentions that the notice did not contain reasons is fallacious, the reference to search and seizure operations and the proposal to centralize the cases in Ghaziabad cannot be .....

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far as the rationale to transfer, i.e., conduct of coordinated post search investigation and meaningful assessment goes, we are of the opinion that like in the case of first contention, the assessees have failed here as well. The kind of reasoning required by an order under Section 127 cannot be compared or likened to a quasi judicial order that has adverse consequences. One can understand if additions are made on sketchy or bare minimum reasons, they cannot be upheld. However, what is proposed .....

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even the briefest one, the order cannot be sustained. Conversely, if there is reasoning and the public interest is discernable, as in this case, the only result can be rejection of the assessees’ contentions. - W.P. (C) 3837/2016, CM APPL.16315/2016, W.P. (C) 3839/2016, CM APPL.16318/2016, W.P. (C) 3841/2016, CM APPL.16320/2016, W.P. (C) 3842/2016, CM APPL.16322/2016, W.P. (C) 3843/2016, CM APPL.16324/2016, W.P.(C) 9935/2016, CM APPL.39493-39495/2016 - Dated:- 2-11-2016 - S. Ravindra Bhat And D .....

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., Director and other associates/concerns related to it was subjected to search and seizure proceedings. Some others - who are also before this Court as the petitioners were on the very same day, i.e., 28.04.2015, subjected to survey proceedings under Section 133A. 3. The revenue proposed to centralize the cases. These cases were before the Central Circle, Ghaziabad and notice was issued to each of the assessees under Section 127 (1) of the Income Tax Act. The rationale to justify the transfer w .....

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& Seizure operation u/s 132 of the Income Tax, 1961 was carried out on 28.04.2014 in the M.K. Overseas Group of cases, Ghaziabad. Your case is proposed to be centralized with DCIT/ACIT, Central Circle, Ghaziabad under the administrative control of Pr. Commissioner of Income Tax (Central), Kanpur. All the assessees resisted notices contending that this process would cause great hardship as their headquarters and principal place of business was not located in Ghaziabad and that its personnel .....

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reasons: - 4. The objections raised by the assessee company have been considered and rejected being not tenable. A Search & Seizure operation u/s 132 of the Income Tax Act, 1961 was carried out on 28.04.2015 by Meerut Unit of Director of Income Tax (Investigation), Kanpur in M.K. Overseas Group of cases. M/s M.K. Overseas Pvt. Ltd., is one of the group companies and was covered in the search and seizure proceedings. Authorisation u/s 133A of the Act was also issued in the name of Assessee C .....

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to Ghaziabad, which is almost thirty five Km. from assessee s office. In this regard, it is pertinent to mention here that the entire set up of the factory/meat processing plant of the assessee company is located in Ghaziabad which is almost thirty five Km. from Delhi. When the assessee company can operate its factory/plant from Ghaziabad then why it is inconvenient for the assessee company to attend the income tax proceedings at Ghaziabad. Moreover, except administrative inconvenience, the asse .....

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of other five assessees, common order was made on 2.2.2016 which inter alia stated as follows: - 2. Thus, in exercise of the power conferred under section 127 of the Income Tax Act, 1961 and all other enabling powers in this behalf. I, Pr. Commissioner of Income Tax, Delhi-21, New Delhi, hereby transfer the case, the particulars of which are mentioned in Column No.2 from the Assessing Officer mentioned in Column No.4 to the Assessing Officer mentioned in Column No.5 and direct that the powers of .....

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ice under Section 127 vitiates the entire transfer and rely upon the authority of the Supreme Court in Ajantha Industries v. CBDT (1976) 102 ITR 281 (SC) and the judgment of the Calcutta High Court in Chotanagpur Industrial Gases Pvt. Ltd. v. CIT 233 ITR 377. It is submitted that the mere mention of the search and seizure proceedings and the conclusion, i.e., proposal to centralize all pending proceedings in the Ghaziabad office cannot be considered as a reason. It does not provide any clue as t .....

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oner of Income Tax, (2013) 356 ITR 502 (Bom) where it was held that the mere reference to administrative convenience as a ground for transfer did not justify the exercise of power. 7. Counsel for the revenue submitted that the writ proceedings are without merit. It was stated that the mention of the fact, i.e., search and seizure operation and the proposal to centralize it were reasons enough for which a valid notice could be given. Furthermore, the assessees did not express prejudice or substan .....

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above discussion that the petitioners grievance as articulated is twofold, firstly whether the notice was vitiated and secondly if not whether the reasons given in the transfer order are of the nature that can stand scrutiny under Section 127. 8. The narrative would disclose that none of the assessees voiced any prejudice at the stage when they were issued notices. The record shows that all of them responded to the notice and gave their own justification why the final order under Section 127 sh .....

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not contain reasons is fallacious, the reference to search and seizure operations and the proposal to centralize the cases in Ghaziabad cannot be considered no reasons. If these had been omitted, the assessees would have been within their rights that the notices did not contain reasons. The assessees were fully aware of the search and seizure operations and the fact that its premises in Ghaziabad too were subject to such proceedings. Having regard to all these facts, the Court hereby rejects th .....

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