Tax assessment cases validly transferred under Section 127 where incriminating evidence was seized by investigating authorities

The HC upheld the transfer of tax assessment cases from Coimbatore to Central Circle, Kolkata under Section 127 of the Income Tax Act. Despite petitioners' objections citing registered office location in Coimbatore, personal difficulties, and litigation costs, the court found the transfer justified since incriminating materials related to lottery business were seized by Kolkata authorities from petitioners' place of business there. The court ruled that assessment should proceed where evidence was collected, regardless of registered office location, as Coimbatore officers lacked necessary materials and jurisdiction over the business activities under investigation.

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Issues Involved:
1. Whether the respondents have sufficient material for the transfer of the case from Coimbatore to Central Circle, Kolkata.
2. Whether the respondents have provided an opportunity for filing a reply and for personal hearing.

Issue-Wise Detailed Analysis:

1. Sufficiency of Material for Transfer:
The petitioners argued that their registered office is in Coimbatore and they do not conduct any business in Kolkata. The respondents countered that incriminating documents were found during a search and seizure operation conducted on 12.10.2023 under Section 132 of the Income Tax Act by the Principal Director of Income Tax (Investigation), Kolkata. The documents seized were interconnected and affected the petitioners' assessment. The respondents proposed to centralize the petitioners' Income Tax files in Kolkata to facilitate a coordinated investigation. The court noted that the incriminating materials were found in Kolkata and were directly linked to the petitioners' business activities, justifying the transfer. Thus, the court found sufficient material for the transfer.

2. Opportunity for Filing a Reply and Personal Hearing:
The petitioners contended that their replies to the show cause notice were not considered and no opportunity for a personal hearing was provided. The respondents issued a show cause notice on 26.12.2023, requesting replies by 02.01.2024 and offering a personal hearing on the same date. The petitioners filed their replies on 27.12.2023 and 28.12.2023 but failed to appear for the personal hearing. The court found that the respondents had provided the opportunity for a reply and personal hearing, which the petitioners did not utilize. Thus, there was no violation of principles of natural justice.

Conclusion:
The court concluded that the transfer of the case from Coimbatore to Central Circle, Kolkata, was justified due to the incriminating materials found in Kolkata. The court also found that the respondents had provided adequate opportunities for the petitioners to file replies and attend a personal hearing. Consequently, the writ petitions were dismissed, and the court upheld the notification dated 25.04.2024 for the transfer of the case. The court also noted that no prejudice was caused to the petitioners due to the delay in receiving the notification. The case laws cited by the petitioners were deemed inapplicable to the present case.

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