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2016 (11) TMI 605 - DELHI HIGH COURT

2016 (11) TMI 605 - DELHI HIGH COURT - TMI - Transfer of cases - assessee’s contention at this stage is that the reasons were vague - Held that:- To constitute a fatal infirmity the reasons indicated in the order under Section 127 (1) dated 11.09.2012 should be of a nature which can be said to be no reasons at all. The order to the extent it is relevant has been extracted above; it clearly indicates that the decision to transfer assessee’s case is based upon the convenience of the income tax aut .....

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ng to the fact that but for the centralisation there could be different approaches leading to differing block assessment orders. - W.P.(C) 3898/2013 - Dated:- 19-10-2016 - MR. S. RAVINDRA BHAT & MS. DEEPA SHARMA JJ. Petitioner Through: Mr. Salil Kapoor, Mr. Sanat Kapoor, Mr. Sumit Lalchandani and Ms. Ananya Kapoor, Advocates Respondents Through: Mr. Dileep Shivpuri, Sr. Standing Counsel, Mr. Sanjay Kumar, Jr. Standing counsel and Mr. Vikrant A. Maheshwari, Adv. CORAM: MR. JUSTICE S. RAVINDRA .....

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of other entities - most of whom were Jalandhar based. The impugned notice was issued by the Additional Commissioner of Income Tax proposing to centralise the assessee s case by way of transfer to the concerned Deputy Commissioner of Income Tax/Additional Commissioner of Income Tax at Jalandhar. The assessee by reply dated 03.05.2012 objected to the proposed transfer contending that the notice contained vague reasons i.e. in its reference to search operations with respect to M/s Prominent Playe .....

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nished to it, the assessee was provided with the impugned order dated 11.09.2012. The said impugned order reads as follows: A request was received from the Commissioner of Income Tax (Central) Ludhiana vide letter F. No. CIT(C)/JB/Cent./32/12-13/33 dated 09/04/2012 for centralization of below mentioned case of M/s Prominent Players of Land Deals Group of cases, Ludhiana from ACIT CIT 32(1) & ITO Ward 33(1) New Delhi of this charge to Central Circle-I. Jalandhar under the charge of the CIT (C .....

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ted 30th May, 2012. In response to the letter a reply has been received from the Director of income Tax (Inv.) Ludhiana through the CIT (Central) Ludhiana vide letter NO.DIT/Inv/Ldh/2012-13/Cent/138 dated 27-07-2012 stating their that the objection of the assessee Shri. Ravneet Takhar are not maintainable. Hence, it is requested that the matter be taken up with the respective commissioner of Income Tax having present jurisdiction over his case for centralization of this case with ACIT Central Ci .....

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c interest which has been consensually interpreted as including 'coordinated investigation in the interest of revenue and administrative convenience. Therefore, in exercise of the powers, conferred by Sub Section(2) of the Section 127 of the Income Tax Act, 1961 and all other powers enabling me on this behalf, I, the Commissioner of Income Tax, Delhi-XI, New Delhi hereby transfer the case, the particulars of which is mentioned in Column from the Assessing Officers mentioned in Column-4 to th .....

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indicated in the impugned notice are untenable because they are not specific. Counsel relied upon Melco India (P) Ltd. s case (supra). In that regard it was further submitted that lack of specific reasons in the notice and the reasons furnished in the order are of such a nature as to render the transfer order illegal and unenforceable. 4. The revenue contends in its counter affidavit that besides the search and seizure operations carried out in the assessee s premises warrants were executed in .....

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ntha Industries s case (supra). On the juxtaposition of the previous law embodied in Section 34 of the Income Tax Act, 1922 with the present provision under Section 127(1), the Court concluded that recording reasons and their communication in an order under Section 127 (1) is necessary: Mr. Sharma also drew our attention to a decision of this court in S. Narayanappa v. Commissioner of Income-tax (1967) 63 ITR 219 (SC), where this court was dealing with section 34 of the old Act. It is clear that .....

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section 127(1) of the Act. When an order under section 34 is made the aggrieved assessee can agitate the matter in appeal against the assessment order, but an assessee against whom an order of transfer is made has no such remedy under the Act to question the order of transfer. Besides, the aggrieved assessee on receipt of the notice under section 34 may even satisfy the Income-tax Officer that there were no reasons for reopening the assessment. Such an opportunity is not available to an assessee .....

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reme Court observed that before making an order of transfer the Legislature has imposed the requirement of a show cause notice and also recording of reasons. Elucidating the principle enunciated in Ajantha Industries case (supra) a Division Bench of the Andhra Pradesh High Court in Vijayasanthi Investments Pvt. Ltd. v. Chief CIT & Ors. [1991] 197 ITR 405(AP), observed as under (page 411) : "... in the matter of the transfer of a case under Section 127 of the Act, it is necessary that th .....

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say in the notice that the transfer is proposed to facilitate detailed and co-ordinated 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 necessary to communicate the same to the affected party." 7. The assessee s contention, broadly, is that the notice issued on 24.04.2012 does not contain precise reasons [read as specific having regard to .....

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