TMI Blog2017 (5) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... n followed and that even the reasons are recorded i.e. “coordinated investigation” at one Central Office at the locations. As observed hereinabove, even in the present case subsequently the assessment order has been passed by the respondent No.1 to whom the case was transferred vide order of assessment dated 29.12.2016 passed under Section 143(3) read with Section 147 of the IT Act, against which the petitioner – assessee has preferred the appeal, which is pending before the learned CIT(A). Considering it cannot be said that the impugned order of transfer under Section 127 of the IT Act suffers from any illegality more particularly when the case has been transferred from one Officer to another Officer at same station and neither any prejudice is pleaded nor any prejudice is shown to have been caused to the petitioner. - Special Civil Application No. 529 of 2017 - - - Dated:- 24-4-2017 - M. R. Shah And B. N. Karia, JJ. Mr SN Soparkar, SR. Advocate With Mr Bs Soparkar, Advocate For the Petitioner Mr Pranav G Desai, Advocate For The Respondent JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) [1.0] By way of this petition under Article 226 of the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to reopen the assessment for AY 200910 alleging inter alia that the income chargeable to tax has escaped assessment within the meaning of section 147 of the IT Act. That the petitioner asked the Assessing Officer respondent No.2 herein Assistant Commissioner of Income Tax, Circle1( 2), Rajkot to furnish the reasons recorded to reopen the assessment. It is the case on behalf of the petitioner that despite repeated requests the respondent No.2 Assistant Commissioner of Income Tax, Circle1( 2), Rajkot did not furnish the reasons recorded. However, thereafter, by letter dated 11.11.2016 the respondent No.1 Assistant Commissioner of Income Tax, Central Circle2, Rajkot asked the petitioner to file the return of income and audit report under Section 142(1) of the IT Act. It is the case on behalf of the petitioner that thereafter the petitioner replied vide letter dated 15.11.2016 stating that he has not received any notice, reasons or order under Section 127 of the IT Act regarding the transfer of his case from respondent No.2 Assistant Commissioner of Income Tax, Circle( 2), Rajkot to the respondent No.1 Assistant Commissioner of Income Tax, Central Circle2, Rajkot an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal and contrary to law. [4.1] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner that no reasons are recorded prior to issuing the transfer order nor the same have been communicated. It is submitted that it was incumbent upon the respondent No.3 to record the reasons for transfering the case of the petitioner from respondent No.2 to respondent No.1. It is submitted that case of the petitioner is also not subjected to any search and/or seizure action under Section 132 of the IT Act so as to transfer the same to the Central Circle. It is submitted that in the noncommunication of the reasons recorded and the failure to communicate the order would vitiate the order made under Section 127(2) of the IT Act. [4.2] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner that as such in the present case it is true that the transfer of the case is from one office to another office in the same city, however not witin the same Commissionerate. It is submitted that the case has been transferred from office of Commissionerate, Rajkot to the office under the Director of Investigation. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tt, learned Advocate appearing for respondent No.1. [5.1] It is vehemently submitted by Shri Desai, learned Advocate appearing on behalf of the respondent No.3 that in the present casethe case has been transferred from one office to another office situated in the same city and therefore, considering provision of section 127 of the IT Act, neither any opportunity is required to be given nor the reasons are required to be assigned. In support of his above submissions, he has heavily relied upon the decision of the Hon ble Supreme Court in the case of Kashiram Aggarwalla vs. Union of India and Ors. reported in 56 ITR 14 (SC). [5.2] It is further submitted that even otherwise in the present casethe reasons are recorded i.e. for coordinated investigation . It is further submitted by Shri Desai, learned Advocate that as such the petitioner has not shown any prejudice caused to him and/or likely to be caused to him while transfering the case from office of respondent No.2 to office of respondent No.1 which is in the same city. [5.3] It is further submitted that even otherwise in the present case after the order of transfer of the case of the petitioner from the office of respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ₹ 40 Crores before the Settlement Commission primarily on account of CCM. That based on the findings in the Amrapali Group and the quantum of taxes evaded by resorting to CCM, the Department started collecting all India data of CCM pertaining to FY 2008-09 to 201011 from different exchanges. That the SEBI also conducted a probe into Modification of Client Codes by brokers. That thereafter, the DIT (I CI), Bombay conducted spot verification under Section 131(1A) of the IT Act in the cases of few brokers. The brokers admitted misuse of Client Code Modification and receipt of commission of 0.5 to 2%. That Investigation Unit of the Income Tax Department called for the details from different exchanges including the agency. That thereafter the Income Tax Department [DIT(I CI)] sought expert opinion from NSE to broadly distinguish the genuine CCM and nongenuine CCM. That the nongenuine CCMs were observed while analyzing the data of the brokers including the assessee by the I CI Wing of the Income Tax Department. The assessee had claimed losses to the tune of ₹ 2,07,62,482/for AY 200910 by resorting to such nongenuine CCM practices. The said facts were not disclosed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and purpose for which the case of the petitioner was transferred from one office to another office and in the same city, has requested to dismiss the present petition. [6.0] Mrs.Mauna Bhatt, learned Advocate appearing on behalf of the respondent No.1 has submitted that as such thereafter the petitioner participated in the reassessment proceedings before the respondent No.1 and thereafter the respondent no.1 has passed the assessment order under Section 143(3) read with Section 147 of the IT Act. It is submitted that the order of assessment has been passed on 29.12.2016 and thereafter the petitioner has also preferred appeal which is pending before the learned CIT(A). Therefore, it is requested to dismiss the present petition. [7.0] Heard learned Counsel appearing on behalf of the respective parties at length. At the outset it is required to be noted that by way of present petition the petitioner assessee has challenged the impugned order of transfer transfering his case from office of respondent No.2 Assistant Commissioner of Income Tax, Circle1( 2), Rajkot to the office of respondent No.1 Assistant Commissioner of Income Tax, Central Circle2, Rajkot. [7.1] It is re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area, and (b) in respect of any other person residing within the area. This provision clearly indicates that where a transfer is made under the proviso to section 127(1) from one Incometax Officer to another in the same locality, it merely means that instead of one Incometax Officer who is competent to deal with the case, another Incometax Officer has been asked to deal with it. Such an order is purely in the nature of an administrative order passed for considerations of convenience of the department and no possible prejudice can be involved in such a transfer. Where, as in the present proceedings, assessment cases pending against the appellant before an officer in one ward are transferred to an officer in another ward in the same place, there is hardly any occasion for mentioning any reasons as such, because such transfers are invariably made on grounds of administrative convenience, and that shows that on principle in such cases neither can the notice be said to be necessary, nor would it be necessary to record any reasons for the transfer. The provisions contained in section 124(3) of the Act deal with the same topic which was the subject matter of section 64(1) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the incometax; and it was also held that where the exigencies of tax collection ,so required, the Commissioner of Incometax or the Central Board of Revenue had the power to transfer his case under Section 5 (7A) to some other officer outside the area where the assessee resided or carried on business. That is how section 5(7A) was sustained. Even so, this Court observed in the case of Pannalal Binjraj that it would be better if an opportunity is given to the assessee in cases where the powers conferred by section 5(7A) were intended to be exercised, because he would then be able to mention his objections to the intended transfer. It is in that connection that this Court further expressed its opinion that if the reasons for making the transfer are reduced, however briefly, to writing, it will help the assessee in appreciating the circumstances which make it necessary or desirable to order such a transfer. It is obviously in pursuance of these observations that the Legislature has made the relevant provisions in section 127(1) of the Act. If this background is home in mind, it would be clear that the propriety of giving an opportunity to an assessee and the desirabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el appearing on behalf of the petitioner referred to hereinabove more particularly the decision in the case of Ajantha Industries (Supra) and Pannalal Binjraj (Supra) are concerned, aforesaid decisions shall not be applicable to the facts of the case on hand more particulary when in the present case the case has been transferred from one Officer to another Officer in the same city / station and that the procedure as required to be followed under Section 127 of the IT Act has been followed and that even the reasons are recorded i.e. coordinated investigation at one Central Office at the locations. As observed hereinabove, even in the present case subsequently the assessment order has been passed by the respondent No.1 to whom the case was transferred vide order of assessment dated 29.12.2016 passed under Section 143(3) read with Section 147 of the IT Act, against which the petitioner assessee has preferred the appeal, which is pending before the learned CIT(A). [7.5] Considering the aforesaid facts and circumstances and in the facts and circumstances of the case, it cannot be said that the impugned order of transfer under Section 127 of the IT Act suffers from any illegality ..... X X X X Extracts X X X X X X X X Extracts X X X X
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