TMI Blog2018 (12) TMI 1400X X X X Extracts X X X X X X X X Extracts X X X X ..... 26.06.2018 is set aside. Consequently, the matter is remitted back to the first respondent to pass a fresh order on merits and in accordance with law - W.P.No.19415 of 2018 And WMP Nos. 22847 and 31827 of 2018 - - - Dated:- 11-12-2018 - Mr. Justice K. Ravichandrabaabu For the Petitioner : M/s.Sandeep Bagmar For the Respondents : Mrs.Hema Muralikrishnan Standing Counsel ORDER The petitioner is aggrieved against the order of the first respondent dated 26.06.2018 passed under Section 127 in transferring the assesees case from ITO, Corporate Ward 4 (1), Chennai to DCIT, Central Circle-1(1), Bangalore. 2. The case of the petitioner, in short, is as follows: a) It is a Private limited Company engaged in the business of providing point of sale technology infrastructure to the Banks and consumer service providers. The petitioner was acquired by the Worldline Group, France through its Singapore subsidiary i.e. Worldline IT and Payment Services (Singapore) Pte. Ltd. (Worldline Singapore) in October 2017. Worldline Singapore acquired 72% stake held by Mr.Kishore Kothapalli (erstwhile Director), 5% stake held by M/s.Global Tech Park Pvt. Ltd. and 23% from other sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to spell out the investigation for the purpose of transfer of files. The reasoning that the materials seized or impounded need to be further investigated cannot be called as vague as that is why transfer of files is important. The reply filed by the petitioner was duly considered by the first respondent and after that, an opportunity of personal hearing was also granted to the assessee. The authorised representative of the petitioner appeared before the first respondent and made his submission. After due consideration of the submission, the impugned order was passed. Hence, the order is valid as per the provisions of the Income Tax Act. Section 127 is to facilitate the transfer of assessees case for jurisdictional purpose. Though Worldline Singapore acquired the petitioner Company in December 2017, on account of this transfer, the said Satish Chandra had received sale proceeds and declared capital gains to the extent of ₹ 19 crores. All these transactions took place in the financial year 2017-18. Hence the accounts of both parties involved required verification and investigation before reaching any conclusion. When huge amounts and numerous transactions between diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lization of the petitioner's case should not be done with the Assessing Officer in Bangalore. It is true that the said show cause notice stated certain reasons, which are as follows: 1.A search operations under Section 132 of the Income Tax Act, 1961 was conducted on 01.12.2018 in the case of Mr.Satish Prphulla Chandra M/s.Global Tech Park Private Limited (GTPL) others at various locations. M/s.GTPL group of companies n Bengaluru is majorly into providing infrastructure solutions and Mr.Satish Praphulla Chandra is its Chairman Managing Director. 2. As part of this operation, survey under Section 133 A was conducted on 01.12.2018 at the office premise of M/s.MRL Postnet Pvt. Ltd., at 1st Floor, No.8/17. Sunny Side Central Block, Shafee Mohammed Road, Nungambakkam, Chennai 600 034 and at #620, Road No.33, Aditya Enclave, Venkatagiri, Jubilee Hills, Hyderabad-500 033. Also, search under Section 132 was conducted on 01.12.2018 at the residence of Mr.Kishore K.Kothapalli, Promoter Director of M/s.MRL Posnet Private Limited at House No.17. Whisper Valley, Raidurga, Hyderabad - 500 008. It is found from the records available with the Income Tax Department that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. 9. No doubt, the show cause notice issued to the petitioner stated some reasons. But at the same time, when such reasons are opposed and a reply is filed by the assessee objecting the transfer, the first respondent has to necessarily record his reasons with certain facts and circumstances warranting the transfer and to justify that centralised/coordinated investigation is required in a particular case. No doubt, the learned counsel for the respondents contended that since the reasons are clearly stated in the show cause notice, they need not be reiterated once again in the order rejecting the objections against transfer. I do not find any justification on such submission. If such view is accepted, then there would be no meaning or purpose in issuing the show cause notice. Needless to say that reasons stated in the show cause notice are only to be construed as a prima facie v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the normal procedure laid down in Section 64(1) and (2) of the Act is sought-to be made against him, be it a transfer from one Income- tax Officer to another within their State or from an Income-tax officer with in the State to an Income-tax Officer without it, except of course where the very object of the transfer would be frustrated if notice was given to the party affected. If the reasons for making the order reduced however briefly to writing it will also help the assessee in appreciating the circumstances which make it necessary or desirable for the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, to transfer his case under section 5(7A) of the Act and it will also help the Court in deter mining the bona fides of the order as passed if and when the same is challenged in Court as mala fide or discriminatory. It is to be hoped that the Income-tax authorities will observe the above procedure wherever feasible . This judgment was rendered by this Court on December 21, 1956, and we find that in the 1961 Act section 127 replaced section 5(7A) where the legislature has introduced, inter alia, the requirement of recording reasons i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have compelled or have put the AO to such inconvenience where co-ordinated investigation is not possible at Raipur are not known to the assessee and against this, the assessee could not have made any possible objection, the reason for proposed transfer is not only vague but by mentioning such reason proper opportunity is also not afforded to the assessee for raising his objection in the matter. 12. In fact, I myself has considered the issue in W.P.No.847 of 2017 and passed an order on 05.06.2017, holding that it is the bounden duty of the Principal Commissioner of Income Tax to record the reasons for transfer, especially when Section 127(2) contemplates the recording of reasons. As it is seen that the observation made by the first respondent in paragraph 6 cannot be construed as the reasons recorded for transfer and on the other hand, it is only single line rejection of the objection raised by the assessee, this Court is of the view that the matter has to go back to the first respondent to necessarily state the reasons for transfer, as required under Section 127(1). 13. No doubt, the learned counsel for the respondents relied on a decision of this court reported in (19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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