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TMI Blog2019 (10) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... y one and the same assessee. While the first writ petition is filed challenging the transfer of the assessee's case from Chennai to Bangalore, the second writ petition is filed against the consequential notice issued by the Assessing Officer at Bangalore. Therefore, the facts and circumstances warranting the filing of these two writ petitions are one and the same and they are as follows: The petitioner is a Private Limited Company incorporated under the Companies Act, 1956. It is engaged in the business of providing point of sale technology infrastructure to banks and consumer service providers. The petitioner Company 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. Prior to the acquisition, one Kishore Kothapalli and Satish P.Chandra were Directors of the petitioner Company. They resigned from the Directorship of the petitioner with effect from 25.10.2017. On 01.02.2018, a survey under Section 133A of the Income Tax Act, 1961 was conducted at the office premises of the petitioner at Chennai. During the course of survey proceedings, the petitioner h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, these present writ petitions are filed. 4. A counter affidavit is filed on behalf of the respondents. The case of the respondents is as follows: The petitioner Company became 100% owned Company by Worldline Group only after purchasing the shares from one Satish Chandra, Kishore Kothapalli and M/s.Global Tech Park Pvt. Ltd. The purpose of centralization of cases is to investigate the transactions among the various related entities during the last six previous years to the previous year in which the search and survey operations are conducted and to assess the income of all the persons concerned for the assessment years in question. Since the transfer of shares had happened in October 2017, which is well within six years prior to previous year, in which survey was conducted, the transactions needs to be investigated in order to have a clear picture before the final assessment of income is made. Therefore, it cannot be said that there was no nexus/linkage. Though the nexus/linkage, which may seem to be absent on the date of survey, the purpose of centralization is not limited to investigate the transactions, if there exists nexus/linkage on the date of survey only, but of six ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich search or survey conducted. Therefore, the entire action is contrary to the provisions of Section 127 of the Act. The first respondent erroneously exercised powers under Section 127 of the Act without recording reasons to justify the necessity of coordinated investigation. In the absence of any agreement for the purpose of transfer under Section 127(2) of the Act between the authorities of equal rank, any transfer made under this Section is bad in law and illegal. In the present case, there is no agreement by the first respondent for transfer as requested by the Principal Commissioner of Income Tax (Central), Bangalore. The very admission of the respondent that the nature of transaction, which requires verification and investigation, is unknown means that the entire exercise is without any basis and without material on record. Therefore, transfer under Section 127 cannot be made merely for facilitating coordinated investigation. 6. Mr.Sandeep Bagmar, learned counsel appearing for the petitioner submitted as follows: The impugned order is contrary to the scope and ambit of 127 (2)(a) of the Income Tax Act. There must be an agreement between the two Commissioners and such agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground was not raised in the first writ petition, the same cannot be raised in the second round. Even otherwise, agreement between the two Commissioners can be inferred from their conduct. Therefore, it is not necessary to specifically state in the order of transfer that an agreement was reached between the two Commissioners. On this aspect, (2017) 86 Taxmann.com 39 (Guj), Genus Electrotech Ltd. vs. Union of India, is relied on. b) On the very same day, survey was conducted at the petitioner's premises and GTPL, Bangalore. GTPL held 24.56 shares in the petitioner's Company. This 24.56% shares is sold to the petitioner's owner in the month of October 2017. The search was conducted in February 2018. Records were seized. Therefore, financial implication between the parties out of such transfer of shares can definitely be inferred. Merely transferring the file from one Office to the other Office does not cause prejudice to the assessee. Mere inconvenience cannot be a ground to refuse or reject the transfer. Since there was search and survey at GTPL, Bangalore, the Assessing Officer, Bangalore, has power to do block assessment. The impugned order is not beyond the scope o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same. It is well settled that when a challenge is made against an order, all the grounds available and legally sustainable should be raised at the first instance. Piece meal raising of grounds one after another in successive writ petitions, in respect of the very same challenge is not permissible, since such kind of practice, if allowed, would only result in entertaining successive writ petitions on the same issue by the same party. 10. Keeping the above position in mind, let me consider the case further. Consequent upon the said order made in W.P.No.19415 of 2018 dated 11.12.2018, a fresh order dated 13.02.2019 in Notification No.10/2018-2019 was issued by the first respondent, which is impugned in this writ petition. Perusal of the said detailed order would show that the first respondent has considered the objections raised by the petitioner, dealt with the same and thereafter, chosen to pass the order of transfer of the petitioner's case once again from ITO, Corporate Ward 4(1), Chennai to DCIT, Central Circle 1(1), Bangalore under Section 127 of the Income Tax Act, 1961, for the purpose of a coordinated investigation, which is necessary for proper assessment of the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e public interest to safeguard the revenue. And while invoking the provisions of section 127 i.e. at this stage of order of centralization, consideration of documents and giving 'detail' reasons are not needed as has been held by various courts. 3) So far as inconvenience in attending proceedings at Bangalore is concerned, the objection is not acceptable because the assessee company is supported/assisted by learned counsels. And in any case this cannot be taken as objection by the assessee because the centralization being an administrative process is being done in the public interest to safeguard revenue. On all the above issues the relevant observations of Gujarat High Court in case of Shree Ram Vessel Scrap Pvt. Ltd. Vs. Commissioner of Income Tax-VI (Special Civil Application No.16883, 16886, 16888 & 16896 of 2012) dated 23/01/2013 are worth mentioning which are reproduced as under: "The contention of the petitioner that the Department should have furnished information with them (as claimed by them in their reply) is not at all sound as the Department cannot be compelled or required at the initial stage to disclose the "material" or "information" as it may "embar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the present case are totally different as discussed supra. Therefore, the above decision of the Apex Court is not applicable to the present case. 14. The next decision relied on is reported in 2004 (186) ITR 428 (Rajesh Mahajan vs. CIT) of the Punjab and Haryana High Court. Perusal of the facts and circumstances of the said case would also show that the impugned order of transfer therein only stated that the transfer of assessment proceedings of the assessee therein was made for a coordinated investigation. In this case, I have already pointed out that paragraph 9.2 of the order of transfer has clearly spelt out certain reasons. Therefore, it is to be noted that in the present case, the transfer is made not by simply stating for a coordinated investigation, but by furnishing the reasons as well in support of such investigation. Hence, the above decision is also factually distinguishable. 15. 2015(234) Taxman 468 (RSG Foods (P) Ltd. vs. Commissioner of Income Tax), again a decision of the Punjab and Haryana High Court is relied on by the petitioner's counsel to contend that mere suspicion cannot be sufficient for taking recourse to action under section 127 of the said A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this point was not at all raised specifically by the writ petitioner in the present writ petition. It is also to be noted that even in the earlier writ petition filed in W.P.No.19415 of 2018, this issue was not raised. However the learned counsel for the petitioner sought to raise this issue first time before this Court orally by contending that it is a question of law based on mandatory statutory requirement under Section 127(2)(a) and therefore, this Court can go into such issue and decide. 20. On the other hand, it is the contention of the learned Senior Standing Counsel for the respondents that when the above issue has not been specifically raised either in the earlier writ petition or in the present writ petition, the learned counsel for the petitioner is not entitled to raise the same, since there was no opportunity for the Revenue to deny such contention in their counter pleadings. I have already observed supra that the grounds cannot be raised in piece meal in successive writ petitions in respect of the very same challenge. Admittedly, the above issue is not raised in the affidavit filed in support of the writ petition, except to say that the impugned order was passed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation : In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which contains two eventualities. While sub clause (a) of 127(2) deals with transfer of cases, when there is an agreement between the two Commissioners, sub clause (b) of Section 127(2) deals with transfer of cases by the Board or any such Officer as the Board may, by notification, authorise in this behalf, where the two Commissioners are not in agreement to transfer the case. While carefully perusing the provision under Section 127(2)(a), it is evident that the word "agreement" referred to therein is to be construed as an agreement by conduct and not necessarily an agreement in writing. The above emphasis is made based on the word "then" referred to under Section 127(2)(a) after the word "agreement". Therefore, it is apparent that only when there is an agreement between the two Commissioners, then the transferring Commissioner has to issue show cause notice and pass orders thereon. If no agreement is reached between the two Commissioners, there is no occasion for the transferring Commissioner to issue show cause notice at all. Therefore, the word "then" assumes significance, only to indicate that the issuance of the show cause notice itself is enough to draw inference of such s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent petition. The agreement of the Principal Commissioner, Ahmedabad, to transfer the case, therefore, can be culled out from the record. Clause(a) of sub-section(2) of section 127 of the Act refers to the agreement of the two heads of the jurisdiction from where as assessment is transferred to where it is being transferred. There is no format in which such agreement must be recorded or conveyed. As noted, the additional duty of the authority from whose jurisdiction the assessment is being transferred is to give a reasonable opportunity of being heard to the assessee and then to pass an order citing reasons. This would necessarily be after he agrees to allowing the assessment to be transferred. When therefore, Principal Commissioner of Ahmedabad had issued notices to the petitioner on more occasions than one proposing to transfer the assessment, his agreement for such transfer was writ large on the face of the record. Had this been a case where the authority to whom the assessment was being transferred and whose agreement is not found on record, the issue would have to be seen in a different light. We cannot put the requirement of clause(a) to sub-section(2) to section 127 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances of Noorul Islam Educational Trust's case. 29. The other decision relied on by the petitioner's counsel is reported in (2011) 332 ITR 97 (Madras), Noorul Islam Educational Trust vs. CIT and others. It is true that the learned Judge found that no material has been placed before him that there was agreement between two Commissioners and therefore, in the absence of such agreement, the transfer cannot be made. In this case, I have already pointed out that the very issuance of the show cause notice itself is reflection of the agreement arrived by the respective Commissioners and therefore, the show cause notice is the relevant material to arrive at a conclusion that there was an agreement between the Commissioners. In other words, the agreement referred to under Section 127(2)(a) is to be inferred based on the conduct of the concerned officials, since such inference is statutorily permitted as discussed supra. Therefore, I am of the view that the above decision of this Court would not help the petitioner in any manner. 30. No doubt, there may be some inconvenience for the assessee to attend the enquiry before the Assessing Officer, to whom the case is tra ..... 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