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TMI Blog2022 (5) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings u/s. 153C for A.Y.2013-14 to A.Y. 2018-19 initiated by respondent No.4. c. Pending further hearing and final disposal of this petition, to stay consequent proceedings u/s. 153A for A.Y. 2014-15 to A.Y. 2019-20 initiated by respondent no.4. d. Pass any other order(s) as this Hon'ble Court may deem fit and more appropriate in order to grant interim relief to the Petitioner; e. Any other and further relief deemed just and proper be granted in the interest of justice; f. To provide for the cost of this petition." 2. The facts giving rise to this writ application may be summarized as under: 2.1 The writ applicant claims to be in the business of trading in vegetables, flowers, fruits, agriculture products etc. It appears that the Deputy Commissioner of Income Tax, Ahmedabad, vide notice dated 04.11.2019 informed the writ applicant that consequent to the search and seizure action undertaken in the case of one Shri Gaurav Krishna Kant Laddha and others on 17.04.2018 under Section 132(1) of the Income Tax Act, 1961 (for short "the Act, 1961") by the DCIT (Inv.) Mumbai, it was proposed to centralize the case of the writ applicant with the Deputy Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s matter. Yours faithfully, (Prem Meena) For Principal Commissioner of Income-tax-3,A'bad." 2.4 On the very next day i.e. 23.09.2020, one another notice came to be issued by the office of the Principal Commissioner of Income Tax, Ahmedabad, which reads thus: "No.AHD/PCIT3/HQ/Cetr'n/KS/GKL Group./2020-21 Date23.09.2020 To, Kamlesh Shah C-11, Sarvodaynagar, Nr Sola Railway Crossing, Sola Road, Ghatlodia, Ahmedabad Sir, Sub: Transfer of your case from erstwhile ITO,Ward-4(2)(2), Ahmedabad To DCIT, Central Circle-8(1), Mumbai- in the case of Shri Gaurav Krishnakant Laddha & Others to centralize the case of Kamlesh Shah, PAN: AQHPS7700A regarding- ---------------------------------------------------------------- Kindly refer to the above captioned subject. 2. A search and seizure action u/s. 132(1) of the Income Tax Act,1951 was conducted in the Shri Gaurav Krishnakant Laddha & Others on 17.04.2018 by DGIT(Inv.), Karnataka & Goa & further other search & seizure in your case along with others was carried out on 07.08.2019 by DGIT(Inv), WB, Sikkim & NER, Kolkata respectively. In concurrence between the above two DGITS, it is proposed to centralize your case with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enabling me in this behalf, I the Principal Commissioner of Income Tax-3, Ahmedabad hereby transfer the following case, the particulars of which are mentioned in column nos. 2 & 3 of the schedule here under, from the Assessing Officer mentioned in column no. 4 to the Assessing Officer mentioned in column no. 5 working under the charge of Pr. Commissioner of Income Tax mentioned in column no. 6 thereof, due to centralization of case of Shri Gaurav Krishnakant Laddha & Shri Kamleshkumar J Prajapati Proprietor Of M/s Kamleshkumar Mahendrakumar & Co., keeping in the view the letters of DGIT (Inv), Karnataka & Goa bearing no. DGIT (Inv.) /Ble/Tech/14/Cent/2018-19/14 dated 08.10.2018 & letter No.F. No.14/Centralization/DG/T(Inv.)/2019-20 dtd 23.07.2020 and Pr. CIT(C)-4 Mumbai's letter No. PCIT (C)-A/Centralis/G K Laddha/201920 19.03.2020 & letter No. PCIT(C)-4/Centralis/G K Laddha/2019-20 dated 27.08.2019. This transfer is made for the purpose of effective and coordinated investigation and assessments. :SCHEDULE: Sr.No. Name of the assessee PAN From To Pr. CIT Charge (1) (2) (3) (4) (5) (6) 1. Shri Kamlesh Rajnikant Shah AQHPS7700A ITO, Wd-4(2) (1), Ahmedabad (erst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entralization of the case of assessee on account of search conducted on 17.4.2018 in cases of Shri G.K. Laddha and Brothers. A. Thereafter, as required under the provisions of law, the assessee was given an opportunity under show-cause dated 4.11.2019. B. In response to the show cause notice the assessee file letter dated 14.11.2019 which reads as under: "In this connection I have objection for centralization of my case from ITO ward 4(2)(2) Ahmedabad to DCIT Central Circle (8)(1) Mumbai. Therefore, I am request to your honour that my case is not centralized from Ahmedabad to Mumbai." As can be seen that no other ground /objection was raised by the assessee in his letter dated 14.11.2019. C. A copy of the objection raised by the assessee was forwarded to the Principal CIT, Central Circle 4 Mumbai under letter dated 5.11.2019. D. Meanwhile another proposal was received from PCIT Central 1, Kolkata for centralization of the case of the assessee with the DCIT Central Circle 2(3) Kolkata under letter dated 23.12.2019. This proposal was in consequence to the search and seizer action. E. As proposal was already received for centralization of the case of the assessee at Mumb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore the contention of the assesse that the order u/s 127 is without any reason is not correct." 7. In such circumstances referred to above, Mr. Bhatt prays that there being no merits in this application, the same may be rejected. ANALYSIS: 8. Having heard the learned counsels appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the writ applicant is entitled to claim any relief in the present writ application. 9. Section 124 of the Act relates to the jurisdiction of the Assessing Officer. Sub-section (1) of Section 124 reads as under : "124(1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he shall have jurisdiction-- (a) in respect of any person carrying on a business or profession, if the place at which he carries on his business or profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing his reasons for doing so, transfer any case from any Income-tax Officer or officers also subordinate to him and the Board may similarly transfer any case from any Income-tax Officer or Income-tax Officers to any other Income-tax Officer or Income-tax Officers. Provided that nothing in this subsection shall be deemed to require any such opportunity to be given where the transfer is from any Income-tax Officer or Income-tax Officers to any other Income-tax Officer or Income-tax Officers and the offices of all such Income- tax Officers are situated in the same city, locality or place: Provided further that where any case has been transferred from any Income-tax officer or Income-tax Officers to two or more Income-tax Officers, the Income-taxers to whom the case is so transferred shall have concurrent jurisdiction over the case and shall perform such functions in relation to the said case as the Board or the Commissioner (or any Inspecting Assistant Commissioner authorised by the Commissioner in this behalf) may, by general or special order in writing, specify for the distribution and allocation of the work to be performed". (2) The transfer of a case under subsection (1) may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, whereas section 127 can be attracted only in circumstances where the Commissioner or the Central Board of Direct Taxes or the authority competent finds that it is proper to or appropriate to exercise power under the said provision in the interest of revenue and for proper adjudication of the tax liability or collection thereof. Thus, as a sequel of the aforesaid principle, it follows that the transfer of cases can be ordered for facilitating the task of effective investigation and for best and coordinated assessment. 16. Now, this power of the authority is hedged under Section 127(1) by two requirements which are that such order can be passed only after giving the assessee a reasonable opportunity of being heard and recording his reasons for doing so, wherever possible. Under clause (a) of sub-section (2) of Section 127, where the Assessing Officer or the officers from whom the case is to be transferred and the Assessing Officer or the officers to whom the case is to be transferred are not subordinate to the same Principal Directors General, Director General, Principal Chief Commissioners, Chief Commissioners or Principal Commissioners or Commissioners, the transfer of case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Board or the authority that the Board may authorise in this behalf, by issuing notification in the official Gazette. This last requirement would ensure that there is no discordance between the heads of the two Assessing Officers from where the assessment is transferred to where it is being transferred and in case there is a disagreement, such powers can be exercised only by the Board or an officer so authorised by the Board. While we are on the requirement of agreement between the two authorities, as referred to in clause(a) of sub-section (2) of Section 127, we may also notice that upon such agreement being achieved, it is the authority from whose jurisdiction the case is to be transferred, has to grant a reasonable opportunity of being heard to the assessee and then pass an order recording his reasons. This requirement would have two significant elements. One is that the authority under whose jurisdiction the assessment is being transferred has merely to show his agreement or disagreement, as the case may be. It is the authority from whose jurisdiction the case is being transferred, in addition to agreeing to transfer would have to grant an opportunity of hearing to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case is transferred. 21. Exercise of power under sub-section (1) and subsection (2) of the Act comes with certain procedural requirements namely, of granting a reasonable opportunity of being heard in the matter wherever it is possible to do so, of recording of reasons for passing such order and as provided by the Supreme Court in Ajanta Industries (supra) communicating such reasons also to the assessee. Subject to fulfillment of such procedural requirements, the authority under Section 127 enjoys considerable discretion while exercising the power contained in sub-section (1) or sub- section (2) thereof. Such discretion of course has to be exercised for achieving the public purpose and not for any arbitrary or irrelevant consideration. On the other hand, it can also be seen that transfer of a pending case from one Assessing Officer to another outside of a city, locality or place is likely to cause considerable inconvenience to an assessee. Therefore, even though an assessee may not have a vested right to insist that his assessment be completed only at one place or by a particular Assessing Officer, nevertheless, the reasons for transfer must be weighty enough to offset agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantial ground for transfer from one officer to another officer.' 19. So far as exercise of discretionary powers of the authority to transfer cases is concerned, a Division bench of the Bombay High Court, in the case of Aamby Valley Ltd. vs. Commissioner of Income-tax, reported in (2014) 41 taxmann.com 15 (Bombay), held as under : "8. We have considered the submissions. The power to transfer cases under Section 127 of the Act is to be undoubtedly exercised after following the principles of natural justice. However, the discretion of the authority to transfer a case has to be examined on the touchstone of the same not being arbitrary and/or perverse and/or mala fide. If there are reasons in the impugned order which indicates due application of mind to reach a view to transfer a case from one jurisdiction to another, then this Court will not interfere with the discretion of the administrative authority who transfers the case. This discretion is vested by the Act in high ranking officers viz. Commissioner of Income Tax and the necessity to transfer a case from the jurisdiction of one officer to another officer for better administration of the Act could be diverse and impossible t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed thereunder which may be mala fide or violative of these fundamental rights. This challenge of the vires of Section 5(7A) of the Act, therefore, fails." 22. In light of the aforesaid judicial pronouncements, we are of the view that facility of investigation or coordinated investigation can be a substantial ground for transfer from one officer to another Officer, more particularly, when the department has some material to establish nexus of the writ applicant with the searched person. One cannot overlook the fact that the writ applicant is suspected to be involved in dubious transactions, whereby as an angadia is found to be habitually claiming ownership of cash seized at various places across the country. In fact, the request seeking transfer has been made from two offices of the department ie. PCIT, Mumbai and Kolkata. It appears from the materials on record that the main purpose of transfer on the ground of centralization of cases is to investigate the dubious transactions of the writ-applicant with various related entities during the relevant period. At this stage, we may refer to the order disposing of the objections raised by the assessee with regard to transfer pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... getting an opportunity of hearing before the concerned Assessing Authority and adduce his evidence and make his submissions before the concerned Assessing Authority. The Income Tax department has recently introduced a scheme of Faceless Assessments with a view to avoid personal hearing and physical interaction of the assessee and the Assessing Authority altogether. The assessee need not even know the name of the Assessing Authority who will deal with his case. 24. The learned counsel appearing for the writ applicant placed strong reliance on a decision of this High Court in the case of Anuben Lalabhai Bharwad Vs. Principal Commissioner of Income Tax reported in 2016 (289 CTR 49) (Guj.), wherein this Court took the view that not only a reasonable opportunity of hearing should be given, there should be sufficient materials on record to show some nexus of the assessee with any group at whose premises search is undertaken. There need not any debate as regards the principles of law explained by this Court. In the case on hand also there is material to show nexus of the writ applicant with the related entities. 25. Having regard to the position of law as discussed above and also the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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