TMI Blog1997 (12) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ne 10, 1997, and directed the respondents to pass fresh orders in terms of section 127 of the Income-tax Act, 1961, by complying with the requirements of the said provision. Further, the earlier order of transfer was quashed by this court following the judgment of the Supreme Court reported in Ajantha Industries v. CBDT [1976] 102 ITR 281 and Vijayasanthi Investments Pvt. Ltd. v. Chief CIT [1991] 187 ITR 405 (AP), as in the show-cause notice, no reasons have been set out for the transfer, no reasons have been communicated to the petitioner and there has been violation of principles of natural justice as well as the mandatory requirements of sub-section (2) of section 127 of the said Act. Subsequently, the first respondent issued a notice under section 127(1) read with section 127(2)(a) of the said Act on September 22, 1997, proposing to transfer the case of the petitioner from the file of the Assistant Commissioner of Income-tax, City Circle VII (Investigation), Chennai, to the file of the Assistant Commissioner of Income-tax, Central Circle VIII, New Delhi, for the three reasons detailed in the said notice and the petitioner had been called upon to state its objections. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first respondent herein---is not the competent authority, but it is the Chief Commissioner, who could pass orders. In this respect, it is relevant to quote sub-section (2)(a) of section 127 of the Income-tax Act, which reads thus : "Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director-General or Chief Commissioner or Commissioner,--- (a) where the Directors-General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director-General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order." The above statutory provision enables either the Director-General or Chief Commissioner or Commissioner to whom such Assessing Officers are subordinate and if the said transferring authorities are in agreement, then either the Director-General or Chie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued and, therefore, the Commissioner had already made up his mind and, thereafter, issued a notice, which is only a formality and it would be in violation of the principles of natural justice. It is further submitted by learned counsel for the petitioner that having agreed to the proposal or the move of the Commissioner, the first respondent should not have decided the matter, but it would have been decided by some other authority. This contention also cannot be sustained. When the second respondent, the Commissioner of Income-tax, Central Circle, New Delhi, sends the proposal, it is open to the first respondent to agree and if the first respondent concurs with the second respondent, thereafter a show-cause notice could be issued in terms of the said provision. Objections, if any, submitted to the show-cause notice is considered by the first respondent and the orders are being passed by the first respondent. Where the two Commissioners are not in agreement, the order transferring the case has to be passed by the Board or such Director-General as the Board may, by notification, authorise in this behalf, which would fall under clause (b) of sub-section (2) of section 127 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the transfer of the petitioner's case. A search and seizure operation was conducted under section 132 of the Income-tax Act in the petitioner's premises on November 6, 1996, as part of a larger operation conducted at the premises of Sri S. Krishnakumar, exminister, and his business associates. During the search and seizure, documents seized were instruments of partnership executed at Madras by the partners of the petitioner firm including Smt. L. Sridevi Pillai, mother-in-law of the ex-minister, Shri S. Krishnakumar, and Mr. M. A. Karim. The partnership deed dated September 20, 1994, between the said Smt. L. Sridevi Pillai, Mr. Adarsh Kumar, Mr. M. A. Karim and Sinju A. Karim was also seized and the said partnership deed was executed to carry on the business of trade and export of goods under the name and style of General Exporters at Madras. Mr. Adarsh Kumar is the son of the said ex-minister, S. Krishnakumar. The said Smt. Sridevi Pillai and Mr. Adarsh Kumar are the partners in the firm, General Exporters, which is already assessed in the Central Circle VIII, New Delhi. According to the first partnership deed dated September 20, 1994, the said Mrs. Sridevi Pillai and Mr. Adar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri S. Krishnakumar who are being assessed at Delhi. The assessee's objection that the file cannot be transferred in order to facilitate co-ordinated investigation and that this itself is an irrelevant circumstance, is also not accepted and I am supported by the court decisions already cited in paragraphs 15, 16, 17, 18, 19 and 20. Again, the assessee's objection that he could be put to irreparable loss and inconvenience if he is made to travel to Delhi, is not accepted as in any case, the partners do not reside in Madras. Even in their writ petition filed before the High Court of Madras in W. P. No. 9731 of 1997 in June, 1997. Shri M.A. Karim, managing partner, has stated that he is residing at Quilon. It was also found that nobody is residing at the business address given in No. 3, 3rd Cross Street, Sylvan Lodge Colony, Chennai-10, when notices were sent for service and the Income-tax Inspector had to go and serve it by affixure on the address. He has stated that though there was a sign board by name of General Exporters, there was no sign of any business activity being carried out in that premises. The assessee's auditors, Shri B. R. Rao and Co., have also stated in their lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in ordering that the cases be handled by the Income-tax Officer, Special Investigation Circle-II, Jabalpur, who generally deals with such cases. It has also been mentioned that because of the routine cases it may not be possible for the Income-tax Officer, Katni, to complete a thorough scrutiny and detailed investigation before completing the assessment." In Bhatia Minerals v. CIT [1993] 200 ITR 591 (All), a Division Bench of the Allahabad High Court had occasion to consider as to whether the reason to have a co-ordinated investigation, is a valid ground for transfer and in that context, it has been held thus : "The petitioner's counsel strongly urged that the cases should not be transferred to Meerut but should remain at Dehradun for, otherwise, the petitioner will face a lot of hardship. We are not inclined to accept this submission. The allegations in the counter-affidavit indicate that threats were given to the Income-tax Officers and difficulties were created in their official work. It becomes thus evident that an Income-tax Officer at Dehradun may not be able to work properly and may get threats in future also. It is hence best if the assessment work of the group is do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1993] 200 ITR 591 (All), as against the view of the Andhra Pradesh High Court in Vijayasanthi Investments Pvt. Ltd. v. Chief CIT [1991] 187 ITR 405 and further held thus : "Apart from the Delhi and Allahabad High Courts, the Gauhati High Court in the case of Assam Surgical Co. v. CBDT [1984] 145 ITR 400, the Rajasthan High Court in the case of Shri Rishikul Vidyapeeth v. Union of India [1982] 136 ITR 139 and the Calcutta High Court in the case of Dwarha Prosad Agarwalla v. Director of Inspection [1982] 137 ITR 456, have held that facility of investigation or co-ordinated investigation is a substantial ground for transfer from one officer to another officer. As noticed above, the very object of transfer is to achieve the object of the Act. If co-ordinated investigation is necessary for the purpose of proper assessment, prevention of evasion of tax, collection of tax and other relevant matters, then proper and co-ordinated investigation is a good ground for transfer of the case. It cannot be laid down as a proposition of law that the said ground cannot be a valid ground for transfer. In a given case the same may not be a good ground for transfer, on being noticed that the co-or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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