TMI Blog2020 (3) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no disagreement between the two Commissioners. Rejecting this stand, Supreme Court held that absence of disagreement cannot tantamount to agreement as visualized under Section 127(2)(a) of the Act which contemplates a positive state of mind of the two jurisdictional Commissioners. Before passing the impugned order u/s 127(2) on 09.08.2019, no opportunity of hearing was granted to the petitioner. Hearing was granted after the said decision was taken culminating in the second order dated 09.12.2019. That apart, from the second order it 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. 9. It may be mentioned that order dated 09.08.2019 was a common order in respect of the present petitioner as well as petitioner in Writ Petition No.492 of 2020 (M/s. Olive Builders) and petitioner in Writ Petition No.690 of 2020 (Sarakutty Mathai). 10. It appears that an objection was raised by the petitioner before respondent No.1 on 22.08.2019 regarding the order dated 09.08.2019 by contending that the procedure prescribed under Section 127(2) of the Act was not complied with thereby rendering the order dated 09.08.2019 invalid. 11. In response to the said notice, petitioner was informed by the office of respondent No.1 vide letter dated 30.08.2019 that petitioner s case was also covered by the search and seizure operation carried out in the premises of M/s. Olive Group under Section 132 of the Act by the Investigation Wing of the Income Tax Department at Kochi. It was mentioned that a proposal was received from the Principal Director of Income Tax (Investigation), Kochi for centralization of the case of the petitioner at Kochi for co-ordinated investigation of the group to protect the interest of the revenue. To afford an opportunity of hearing, petitioner was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction at Kochi in the group cases relating to Olive Builders including that of the petitioner. Similar proposal was also received from the Principal Director of Income Tax (Investigation), Kochi dated 27.06.2019. Thereafter consent for transfer of jurisdiction was received from the Chief Commissioner of Income Tax-6, Mumbai on 05.07.2019. Accordingly, the order dated 09.08.2019 was passed under Section 127 of the Act. After the petitioner raised objection, the same was duly considered whereafter opportunity of hearing was given to the petitioner. Representative of the petitioner was heard and comments from the concerned assessing officers were called for and considered. At this stage, we may mention that the affidavit in reply of respondent Nos.1, 2 and 3 also deals with the merit of the case relating to the search and seizure operation carried out on 16.05.2019 and the reasons for transfer of jurisdiction. Therefore, submission of Ms Bharucha is that the procedural requirements contemplated under Section 127(2) of the Act have been complied with and thus, there is no error or infirmity in the decision taken by respondent No.1 for transfer of jurisdiction. After passing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder; (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as 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 subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion may in clause (a) to sub-section (2), the requirement to provide reasonable opportunity of hearing to the assessee is fundamental to the assumption of jurisdiction under Section 127(2)(a). If that be so then the expression may would contemplate an obligatory requirement on the designated higher authority to provide opportunity of hearing to the assessee. Careful reading of clause (a) would further reveal that such reasonable opportunity of hearing has to be provided before passing an order under Section 127(2). This is clear from the language of the section itself. Thus, this section does not provide or contemplate providing of post-decisional hearing. In any event, a post-decisional hearing is to be provided only in exceptional cases and not in a routine manner. 22. Insofar reasons are concerned, the section only provides for recording of reasons and not furnishing of reasons to the assessee. Therefore, the order passed under Section 127(2) must indicate that the assessee was provided a reasonable opportunity of hearing and must also record the reasons for transfer of assessment jurisdiction. 23. Having discussed the above, we may now advert to the situation contemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigation), Kochi on 25.06.2019 for centralization of cases at Kochi. This was construed by respondent No.1 as consent for transfer of the cases. At the same time, respondent No.1 also mentions that consent for transfer was received from the Chief Commissioner of Income Tax-6, Mumbai on 05.07.2019. Accordingly, it was decided to centralize the cases to facilitate detailed and effective co-ordinated investigation of the group cases. Similar is the stand taken in the affidavit of the respondents. 25. The view taken by respondent No.1 that receipt of proposal from the Principal Director of Income Tax (Investigation), Kochi was construed as consent for transfer of the case is highly debatable. Thus in the context of specific consent received by respondent No.1 from the Chief Commissioner of Income Tax - 6, Mumbai, forwarding of a proposal for centralization of assessment in a group of cases may not amount to a consent for transfer within the meaning of clause (a) to sub-section (2). In fact the expression used in clause (a) to sub-section (2) is agreement ; agreement per se would mean that the concerned parties have to agree to a specific course of action. There has to be a pos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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