TMI Blog2020 (3) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be dismissed on these grounds. Writ petition is dismissed as devoid of merits. - W.P(MD)No.16869 of 2019 WMP(MD)Nos.13453, 13454 & 23079 of 2019 - - - Dated:- 28-2-2020 - THE HONOURABLE MRS.JUSTICE PUSHPA SATHYANARAYANA For the Petitioners : Mr.Lakshmi Narayananfor M/s.Kingsly Solomon J For R1 : Mrs.S.Srimathy Standing Counsel For R2 R3 : Mr.T.R.Senthilkumar Senior Standing Counsel Assisted by K.G.Usha Rani ORDER The petitioner, which is a partnership firm, has laid challenge to the order dated 19.02.2019 passed by the first respondent in transferring the cases to the Deputy Commissioner of Income Tax (DCIT), Central Circle-2, Madurai, as violative of the principles of natural justice. 2.The petitioner states that it has been dealing in mineral industry and has been complying with all the statutory requirements in the Income Tax Act, 1961 [hereinafter referred to as 'the Act'.] The petitioner has been filing returns regularly as per the Act. The income of the petitioner is subject to scrutiny / assessment every year and orders were passed under Section 143(3) of the Act. While so, the officials of the Income Tax Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id petition, the first respondent filed a counteraffidavit, wherein, among other things, it is stated that a search proceedings under Section 132 of the Act was conducted in the premises of the petitioner and there is no provision contained in the Act mandating them to furnish copies of documents to the assessee, which were seized at the time of search, during 127 proceedings. 7. It is also stated that it is a standard procedure of the Department that after the search, the assessees, to be centralized are identified and a proposal for centralization is put up to the Director General of Income Tax (DGIT). From the DGIT, the proposal goes to the Chief Commissioner of Income Tax (CCIT) for concurrence, who in turn, forwards the proposals to the Principal Commissioner of Income Tax (PCIT). The PCIT, thereafter, will transfer the exercising the powers under section 127 of the Act and after following the due procedures contemplated therein from the original Assessing Officer to the Assessing Officer in the Central Circle and thus, there is no pre-determination on the part of the first respondent, as alleged by the petitioner. It is, thus, stated that since the procedure contemplated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer cannot be justified. Though the said view taken by the learned Single Judge was reversed by a Division Bench, on a further appeal to the Supreme Court of India in the case reported in (2017) 12 SCC 805, the decision of the Division Bench was set aside. 12.The next objection raised by the petitioner is that the notice calling upon the petitioner to give any objection does not have any reference to the CBDT instruction No.286/88/2008, Income Tax Department on 17.09.2008. Yet another contention of the petitioner is that the impugned order is liable to be set aside as the first respondent predetermined the whole issue and obtained approval of the Chief Commissioner of the Income Tax, which is long before the impugned order was passed. 13.The further contention of the petitioner is that the show cause notice was issued in a mechanical manner and without considering the objections raised by the petitioner seeking documents, on the basis of the said show cause notice, the transfer has been ordered. In support of this contention, the petitioner relied on a decision of this court in MRL Postnet Private Ltd. V. Principal Commissioner of Income Tax, 2018 SCC OnLine Mad 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferring of cases under Section 127 of the Act, there is no mandatory provisions in the Act or any judicial pronouncements necessitating the same. In support of the said contention, the respondents relied on the case in Virendra Kumar and others V. CIT reported in (2006) 283 ITR 541, wherein it is observed as under: The contention of the petitioner that the department should have furnished information (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 embrace or prejudice the assessment. The legal position is crystal clear and settled by a catena of the decisions of this Court and the Apex Court on this issue. .... 18.The learned counsels for the respondents reiterating the standard procedure as stated in the counter-affidavit would submit that there is no pre-determination on the part of the first respondent, as alleged by the petitioner and issuance of notice is not just a formality but an opportunity to raise objections, which was duly complied with by the respondents. 19. Heard the learned counsel appearing for the petitioner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation and co-ordination, however, stated that the transfer is irrelevant for the said purpose and also sought time to file their objections. They also sought for the relevant documents and the specific reasons for the proposed transfer. Subsequently, a notice dated 11.02.2019 fixing the date of hearing on 18.02.2019 was sent to the petitioner. The petitioner reiterating its previous stand and requirements sent a letter dated 16.02.2019. Thereafter, the impugned order came to be passed. 22. The judgment of the Hon'ble Apex Court in MRL Postnet Private Ltd. V. Principal Commissioner of Income Tax, 2018 SCC OnLine Mad 11651, is relied upon by the learned counsel for the petitioner that in the absence of reasons for transfer, the said order would have to be construed as the one passed without application of mind. The relevant portion of the said order reads as under: 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 tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommunicated to the assessee. ...... 15.When law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. 24. The Hon'ble Supreme Court in (1990) 2 SCC 48, Management of M/s.M.S.Nally Bharat Engineering Co.Ltd., V. State of Bihar and others, has held as follows: 21.A case with a not dissimilar problem was in Pannalal Binjraj and Anr. v. Union of India, [1957] 31 ITR 565. There the Commissioner of Income Tax by the power vested under section 5(7A) of Income Tax Act, 1922, transferred an assessee's case from one Income Tax Officer to another without hearing the assessee. Section 5(7A) of the Income Tax Act, 1922 provided: The Commissioner of Income-Tax may transfer any case from one Income-Tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income- Tax Officer to another. Such transfer may be made at any stage of the proceedings, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 127(1) and (2) of 1961 Act, indicates the legislative intent of providing an assessee a reasonable opportunity of being heard in cases falling under sub sections (1) (2) thereof. 17. In conclusion therefore we hold that the word 'may' in section 127 should read as 'shall'. The requirement of giving an assessee a reasonable opportunity of being heard wherever it is possible to do so, is mandatory. The discretion of the authorities is only as to what is a reasonable opportunity in a given case and on the question whether it is possible in the given case to provide the opportunity. 26. Another Division Bench of the High Court of Bombay in the case of Global Energy Pvt. Ltd. Vs. Income Tax, 2013 SCC OnLine Bom 296, has held as follows : 11. Again there cannot be any dispute regarding some observation which has to be noticed that co-ordinating investigation can always be a good ground for transfer from one place to another. What the Apex Court has observed in Ajantha Industries (supra) is that while transferring the csae on the ground of co-ordinated investigation, some reason has to be given by the commissioner which reveals that why it is nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, as it cannot be stated that the impugned order lacks reason. It cannot be also stated that the first respondent did not provide opportunity to the petitioner to give objections and on the other hand, he failed to give proper objections for the transfer within the time stipulated, instead, he sought for the documents to make his objections. 31. The learned counsels for the respondents also relied upon the case in Advantage Strategic Consulting (P) Ltd. V. PCIT, Chennai reported in (2017) 88 Taxman.com 104 (Mad), wherein this court held as follows: Where assessee's case was transferred from one place to another in same city, in view of provisions of Sub-section (3) of Section 127, assessee could not plead for an opportunity of hearing before order of transfer . 32. In the present case, the transfer was made from Tirunelveli to Madurai Central Circle and though not within the same locality or same city. The petitioner challenged the impugned order passed under section 127(2) and not under Section 127(3). Therefore, the said case is not applicable to the facts of the present case. 33. Learned counsels for the Respondents placed reliance on the judgment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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