TMI Blog2023 (2) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... o the merits of the matter and thereby grossly prejudicing the interest of the assessee. While examining the correctness of the administrative action, we cannot be called upon to do and hair-splitting exercise or else we would be converted to doing the role of an assessing officer which is not permissible in a writ proceeding. Several other factual details have been elaborately set out by the learned single bench. These factual details which were set out by the learned single bench are to justify the order of dismissal of the writ petition can at best be construed to be reasons for refusing to exercise jurisdiction to interfere with the order of transfer and nothing more, the findings rendered by the learned writ court are only prima facie findings and they can never cause any dent upon the ultimate decision which the assessing officer in the transferred place would take after taking note of the relevant facts and documents placed before it. The natural corollary which has to follow is that the income tax department was required to assign reasons for proposing the transfer. These reasons were set out in the show-cause notice dated 11.01.2022. The assessee is thus precluded fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted and availed of, reasons have been recorded by the department. There is no challenge to the decision making process. The plea of mala fide has not been pleaded or proved. The plea of inconvenience has been found to be not tenable. In the net result, we have to necessarily uphold the order of transfer. The appellant has not been able to make out any case for interference with the order of transfer on anyone of the settled principles for interference of an administrative order. The learned single bench had made an elaborate exercise and upheld the order of transfer and we find no good grounds to interfere with the same. - M.A.T. NO. 40 OF 2023 (CAN NO. 01 OF 2023) - - - Dated:- 10-2-2023 - HON BLE MR. JUSTICE T.S. SIVAGNANAM AND HON BLE MR. JUSTICE HIRANMAY BHATTACHARYYA Appearance:- For the Appellant : Dr. Abhishek Manu Singhvi, Learned Senior Advocate Mr. J.P. Khaitan, Ld. Senior Advocate Mr. A. Agarwala, Advocate Mr. Saurabh Bagaria, Advocate Mr. Varun Chopra, Advocate. For the Respondents : Mr. Tushar Mehta, Learned Solicitor General Mr. Balbir Singh, Learned Additional Solicitor General Mr. Dhiraj Trivedi, Learned Deputy Additional Solicitor General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative in writing within 14 days from the receipt of the show-cause notice failing which, it was stated that it would be presumed that the appellant has nothing to say in the matter. The appellant through his authorized representative responded to the show-cause notice by way of a preliminary response dated September 18, 2019 stating that the show-cause notice erroneously mentioned that the appellant was covered in the search and seizure operation as the appellant has never been part of the search, seizure and/or survey. The appellant denied all the allegations in the show-cause notice in relation to inter-linked transaction and those close associates with Praveen Kakkar, Rajendra Miglani and others as being without any basis. It is further stated that the appellant was at the relevant time not in Kolkata and was extremely busy managing and monitoring places situated in Bhopal where several thousands of people have been affected through flood and therefore, requested to grant 3 to 4 weeks time to submit his response to the show-cause notice. The appellant after reiterating the stand in the letter dated September 18, 2019 by letter dated October 3, 2019, stated that the allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been transferred from Kolkata to New Delhi. Thus, challenging the order of transfer the writ petition was filed. It appears that the Department was not directed to file any affidavit-in-opposition and the submissions of the Standing Counsel for the Department and the Court proceeds to record stating that the learned Counsel could not provide any information as to the fate of the representatives given by the appellant on September 18, 2019 and October 3, 2019. After noting the same, the learned Single Bench took note of the submission made on behalf of the appellant that without considering and disposing of the letters/ representation and without giving any opportunity of hearing and without communicating a formal order of disposal and/or rejection of the appellant s prayer made in the said letters such decision of transfer of the case of the appellant under Section 127(2) of the Act was not sustainable. That apart, the appellant was not communicated about the transfer and came to know only through the official portal of the Income Tax Department about the transfer. The learned Single Bench had directed the Department to produce the records, with regard to the receipt of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The PCIT issued fresh show-cause notice dated January 11, 2022 under Section 127 of the Act. After referring to the order and direction issued in WPA 11901 of 2021 dated September 27, 2021, the show-cause notice proceeds to set out certain facts, which we shall advert in the later part of the judgment, proposing that in view of the cogent materials pertaining to the appellant and also statement of associated parties recorded during search and seizure operations, linked to the appellant, it is necessary to transfer the jurisdiction to a specific charge where other related parties have been centralized for a concerted, deep investigation and proper assessment. The appellant was a given an opportunity of being heard to represent his case as to why the jurisdiction should not be transferred. 10 days time was granted to file the objections. The appellant by reply dated February 7, 2022 stated that on going through the annexures appended to the communication dated January 11, 2022, there was no material whatsoever justifying the transfer of his personal income tax assessment to Delhi more particularly, when no search or survey had been conducted on the appellant or at any premises ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was fixed on February 9, 2022 however, it appears that the appellant did not personally appear but his representative had appeared on the said date and sought for adjournment and the request was accepted and the hearing was fixed on February 17, 2022. On the said date the appellant had submitted a letter sent through a messenger reiterating the stand taken earlier in the written statement dated February 7, 2022 and in addition stating that the appellant is an Indian politician who served as the 18th Chief Minister in Madhya Pradesh for approximately 15 months and resigned after political crisis. He is the leader of the Madhya Pradesh Legislative Assembly since 2020 and as a leader of the Indian National Congress, the assessee has served as the Minister of Regional Development and thus, he is the longest serving and senior most Member of the Lok Sabha. Further, the assessee stated that he was appointed the pro tem Speaker of the 16th Lok Sabha and he was elected 9 times to Chhindwara Lok Sabha Constituency of Madhya Pradesh and was elected as President of the Madhya Pradesh Congress Committee in May 2018, leading the party in the November- December 2018 Assembly Election. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the entire issue. Further, it was contended that the department should not be permitted to set up a new case in the course of arguments of the writ petitioner stating that the group of persons whose cases are to be centralized though mentioned as five persons initially has been subsequently mentioned as thirty four persons. After elaborately referring to the orders passed in the earlier writ petition and as to how the Court came to the conclusion that the first order of transfer, uploaded in the official web portal was set aside as being illegal as the response given by the appellant to the show-cause notice was not considered as to how the opportunity of hearing was not offered and no order of transfer was communicated to the appellant. While referring to the show-cause notice dated January 11, 2022 it is submitted that there were certain details of cash transactions which were mentioned in the show-cause notice since those allegations pertain to the merits of the assessment which is yet to be made, we refrain from referring to those details in this judgment but suffice to state that in the submissions made before the learned Writ Court the appellant has sought to explain thos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further it is submitted that Section 127 does not provides for clubbing the case of a mere witness, like the appellant with the case of persons on whom investigation and assessment were made. This is because, such investigation and assessment proceedings will have nothing to do with the personal income and taxation of the witness like the appellant. Further it is submitted that the foundation of the proceedings under Section 127 is the show cause notice dated January 11, 2022 and the case in the show cause notice cannot be improved upon. It is not the case of the revenue in the show cause notice or the order of transfer that the appellant should not be assessed at Kolkata because he has no earning or bank account at Kolkata and allegations in that behalf has been made for the first time in the affidavit-in-opposition which amounts to introducing new material/allegations. Further it is reiterated that the appellant was not subjected to any search or survey operations. The averments which were raised in the writ petition were reiterated as also the explanation with regard to the financial transactions which were referred to in the show cause notice were sought to be explained to stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferred to the Central charge under Section 127 of the Act and this aspect was noted by the High Court at Madras while dismissing the writ petitions filed by the three assessees vide an order dated March 25, 2021. 12. The learned senior counsel appearing on behalf of the appellants placed reliance on the decisions of the Hon ble Supreme Court in Ajantha Industries and Others Versus Central Board of Direct Taxes, New Delhi and Others 1976 1 SCC Page 1001 and the decision in P.S. Housing Finance Private Limited and Others Versus Union of India and Others 2007 290 ITR 316 (Cal) Dilip Kumar Agarwal and Others Versus Commissioner of Income Tax 2009 314 ITR 291 (Cal) Rajesh Mahajan and Others Versus Commissioner of Income Tax 2002 257 ITR 577 Anil Kumar Kothari Versus Union of India and Others 2010 SCC Online Gauhati 775, Global Energy Private Limited Commissioner of Income Tax 2013 356 ITR 502 (Bom). 13. The learned Additional Solicitor General also referred to the decision in Ajantha Industries and the decision of the Constitution Bench in Pannallal Binjraj and Another Versus Union of India AIR 1957 SC 397 and the decision of the Constitution Bench in Kashiram Aggarw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of an administrative order passed for considerations of convenience of the department and no possible prejudice can be involved in such transfer. Thus, the decisions of the Constitution Bench clearly holds that the assessee has no right to be assessed in a particular area or locality, if it is not a fundamental right, the statute can take away such a right to be assessed in a particular area in a manner provided for under the Act. Though the decision in Pannalal was rendered in 1957 under the old act still it continues to be of significance for the legal principle laid down therein that there is no fundamental right in an assessee to be assessed in a particular area or locality. Furthermore, as held in Kashiram Aggarwalla, an order of transfer is purely in the nature of an administrative order passed for consideration of convenience of the department and no possible prejudice can be involved when the cases have been transferred. 16. As mentioned earlier, the decision in Ajantha Industries were relied on by the learned Senior Counsel appearing for the appellant as well as by the learned Additional Solicitor General. The following paragraphs of the decision would be of sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortunity to be held and there was consequently no need to record reasons for the transfer. This decision is not of any assistance to the Revenue in the present case since that was a transfer from one Income-tax officer to another income tax officer in the same city, or, as stated in the judgment itself, in the same locality and the proviso to Section 127(1), therefore, applied. 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 cease 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. 17. The legal principle that could be culled out from the above decision is that while making an order of transfer reasons have to be recorded and if such an order is passed recording reasons it would provide an opportunity to the assessee to approach the High Court under Article 226 of the Constitution or the Hon ble Supreme Court under Article 136 of the Constitution in an appropriate case for challenging the order. The Hon ble Supreme Court while holding so, also holds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose any nexus of the petitioners therein with the other group of companies who had come under the scanner of the department. In Anil Kumar Kothari it was held that merely by stating administrative convenience and for coordinating effective investigation cannot be a reason as envisaged under Section 127 of the Act for transfer of a case. In Global Energy Private Limited, it was held that coordinating investigation can always be a good ground for transfer from one place to another and after taking note of the decision in Ajantha Industries, it was held that while transferring case on the ground of coordinated investigation, some reasons has to be given by the Commissioner which reveals why it is necessary to transfer the case for the purpose of coordinated investigation and in the said case there was no reason given and therefore the order of transfer was quashed. The decisions which we have noted above all revolve upon the factual matrix in each of the cases. Therefore, no universal test can be made applicable while considering the correctness/validity of an order under Section 127 of the Act. 20. At this juncture, it would be relevant to refer to the decision of the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter and thereby grossly prejudicing the interest of the assessee. In our view partly the blame lies on the assessee himself as it was the case of the assessee when he first approached this court by filing the writ petition, contending that there has been flagrant violation of principles of natural justice in as much as no reasons have been mentioned to justify the invocation of the power under Section 127 of the Act. This submission was accepted by the learned writ court which led to setting aside the earlier order of transfer and giving liberty to the department to initiate fresh action. The observations made by the learned writ court in this regard had been referred to earlier. Thus, when the show cause notice dated January 11, 2022 was issued the Income Tax department was bound to disclose the reasons for the proposed transfer which had been provided in the show cause notice. The assessee has submitted his response as to how those reasons may not be germane for exercise of jurisdiction under Section 127 of the Act. The appellant assessee had been afforded effective opportunity to place all materials including an opportunity of personal hearing which has been availed. After co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ultimate decision which the assessing officer in the transferred place would take after taking note of the relevant facts and documents placed before it. 23. It is submitted by the Learned Senior Counsel for the appellant that better coordination investigation , as mentioned in the order of transfer are vague, suitable to have the case transferred to Delhi cannot be a reason for transfer under Section 127 of the Act. Further, merits cannot be reasons for transfer, neither administrative conveyance could be a reason. It is further submitted that the appellant does not claim any vested right to be assessed at Kolkata, however, the transfer having been initiated by the income tax department, onus is on them to justify the order, as, the income tax department also cannot have a right to choose the place where the assessment would be made. It is submitted that in Paragraph 28 of the impugned order, it has been held that the income tax officer at Delhi is best suited to investigate and carry out the assessment of the appellant. This concept of suitable boy theory is unacceptable, it cannot be a valid ground for transfer. 24. The learned Senior Counsel for the appellant conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no considered, the assessee was not heard, no order was passed nor communicated to the assessee therefore, the order was in violation of the statutory mandate apart from being in violation of the principles of natural justice. This argument of the assessee was accepted by the learned Single Bench, the order of transfer was quashed with liberty to the income tax department to initiate fresh action. The natural corollary which has to follow is that the income tax department was required to assign reasons for proposing the transfer. These reasons were set out in the show-cause notice dated 11.01.2022. The assessee is thus precluded from stating that the show-cause notice is coloured on facts. This being a result of the order obtained by the assessee in the earlier writ petition, the assessee is barred from raising such a contention. 28. In Global Energy the Hon ble Division Bench of the Bombay High Court pointed out that coordinating investigation can always be a good ground for transfer from one place to another. Relying on the judgment of the Hon ble Supreme Court in Ajantha Industries, it was pointed out that while transferring the case on the ground of coordinated investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coloured on facts is unacceptable. Further, it appears that the assessee, before the learned Writ Court has embarked on facts, as was done before us, this has resulted in the learned Writ Court to consider the same and render a finding. In any event in this litigation adjudication of the merits is out of bounds, hence any argument as advanced on behalf of the appellant in that regard has to necessarily fail. If the assessee states that he claims no right to be assessed at a particular place while exercising the power under Section 127 of the Act, our task becomes easier. This is so because the assessee had been provided with adequate opportunity to put further his submissions on the proposal for transfer, opportunity of personal hearing was granted and availed of, reasons have been recorded by the department. There is no challenge to the decision making process. The plea of mala fide has not been pleaded or proved. The plea of inconvenience has been found to be not tenable. In the net result, we have to necessarily uphold the order of transfer. 34. Therefore, we are of the clear view that the appellant has not been able to make out any case for interference with the order of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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