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TMI Blog2020 (3) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... Olive Builders engaged in the business of development and construction of buildings. It is stated that he is an assessee assessed to income tax under the jurisdiction of respondent No.1. 7. It appears that a search and seizure operation was carried out in the premises of Olive Builders on 16.05.2019 at Kochi where the partnership firm is engaged in the business of development and construction of buildings. 8. Thereafter an order dated 09.08.2019 was passed by respondent No.1 - Principal Commissioner of Income Tax-28, Mumbai under subsection (2) of Section 127 of the Income Tax Act, 1961 (briefly 'the Act' hereinafter) transferring the case of the petitioner from Assistant Commissioner of Income Tax-28(2), Mumbai to Deputy Commissioner of Income Tax / Assistant Commissioner of Income Tax, Central Circle- 1, Kochi for administrative convenience and co-ordinated investigation as the territorial jurisdiction of the case was with the assessing officer. It was also mentioned that relevant case records under the Gift Tax Act as well as Wealth Tax Act, if any, would also stand transferred accordingly and that the said order was to come into effect on and from the date of issue of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etent / designated authorities leading to transfer of jurisdiction as per requirement of clause (a) of subsection (2) of Section 127 of the Act. That apart, reasons were not disclosed. It was only after petitioner lodged objection that reasons came to be disclosed in the form of the second order dated 09.12.2019, which is stated to be in modification of the earlier order dated 09.08.2019. Therefore, it is a case of post-decisional hearing which is not contemplated under the statute. Final contention is that prior to issuance of order dated 09.12.2019, reasons were never provided to the petitioner. Mr. Jain would therefore contend that above procedural infirmities have vitiated the decision making process warranting interference by the writ court. 16. Per contra, Ms Bharucha, learned standing counsel Revenue has referred to the averments made by respondent Nos.1, 2 and 3 in their common affidavit in reply filed on 03.02.2020. Referring to the averments made in paragraphs 5 and 6 of the said affidavit, she submits that proposal was received from the Directorate General of Investigation (Investigation), Kochi dated 25.06.2019 for centralization of assessment jurisdiction at Kochi in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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. (2) 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 Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (a) Where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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; (b) where the Principal Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the event they are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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. This is the requirement of clause (a) of sub-section (2). In other words, clause (a) deals with a situation where the designated higher authorities of both the areas to whom the respective assessing officers are subordinate are in agreement. Once they are in agreement that the assessment jurisdiction has to be transferred then the designated higher authority from whose jurisdiction the case is to be transferred may provide the assessee a reasonable opportunity of being heard wherever it is possible to do so and after recording the reasons for doing so, pass the order of transfer. 21. Before adverting to the situation contemplated under clause (b), we are of the view that notwithstanding use of the expression 'may' in clause (a) to sub-section (2), the requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'similarly' would mean that the Board or the authorized designated higher authority follow the same procedure as provided in clause (a) before passing the order of transfer. 24. Having discussed the legal provisions as above, we may now advert back to the first order dated 09.08.2019 passed by respondent No.1 under Section 127(2) of the Act. Perusal of this order does not disclose that the two designated higher authorities were in agreement for transfer of assessment jurisdiction. Further, this order also does not indicate or disclose that reasonable opportunity of hearing was granted to the petitioner. That apart, the only reason mentioned for transfer of jurisdiction is administrative convenience and co-ordinated investigation which on the face of it is quite vague and indeterminate. It was only after petitioner submitted objection that respondent No.1 passed the second order dated 09.12.2019 under Section 127(2) of the Act stating to be in modification of the earlier order dated 09.08.2019. In paragraph 2 of the second order, it is stated that a proposal was received from the Principal Director of Income Tax (Investigation), Kochi on 25.06.2019 for centralization of cases at Ko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is discernible that there was no agreement between the two jurisdictional Principal Commissioners to transfer assessment jurisdiction from Mumbai to Kochi. Evidently, the procedure prescribed under Section 127(2)(a) of the Act has not been complied with. It is trite that when a statute requires a thing to be done in a particular manner, then it has to be done in that particular manner. 27. In the light of the above discussions, we are of the view that the decision making process leading to passing of the two impugned orders has been vitiated for non-compliance to the statutory procedural requirements. Consequently, both the orders dated 09.08.2019 and 09.12.2019 passed by respondent No.1 cannot be sustained; those are hereby set aside and quashed. 28. Since we have set aside the above two orders, all consequential actions shall also stand interfered with. 29. It is open to the Central Board of Direct Taxes, New Delhi to step in and take action as per clause (b) to sub-section (2) of Section 127 of the Act in accordance with law keeping in mind the discussions made above. 30. We make it clear that we have not expressed any opinion on merit and in the event Central Board of Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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