Transfer of assessment case for coordinated investigation fails when the foundational basis for centralisation no longer exists.

A transfer of an assessee's assessment file under Section 127(2) of the Income-tax Act cannot be justified on the basis of coordinated investigation once the foundational reason for centralisation has ceased to exist. Here, the transfer was supported only by the claim that the assessee, as CFO of the company, required centralised assessment along with the company's case; once the Revenue stated that the company's assessment had already been completed, that basis no longer survived. The Bombay HC held that the transfer order could not be sustained and was rightly quashed.

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Issues: Whether the transfer of the petitioner's assessment case under Section 127(2) of the Income-tax Act, 1961 could be sustained when the stated basis for centralisation and transfer was coordinated investigation in the case of the company, and the company's assessment had already been completed.

Analysis: The transfer order was founded only on the premise that, as the petitioner had been the CFO of the company and the company's case had been centralised, the petitioner's case also required centralisation for coordinated investigation and meaningful assessment. Once it was stated on behalf of the Revenue that the company's assessment had been completed, the very reason supporting the transfer no longer survived.

Conclusion: The transfer order under Section 127(2) could not be sustained and was rightly quashed; the issue was decided in favour of the petitioner.

Ratio Decidendi: A transfer of an assessment case for centralised, coordinated investigation cannot stand when the foundational reason for such transfer has ceased to exist.

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