TaxTMI 
TaxTMI 
2009 (12) TMI 73
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....as got income from the house properties and business and the jurisdiction over the A.P.Majeed Khan, founder and Chairman of the assessee trust was vesting with the Deputy Commissioner of Income Tax, Circle-I, Division-I, Tiruvananthapuram. A search under Section 132 of the Income Tax Act 1961 was conducted on 11.09.2001 in the case of A.P.Majeed Khan and the assessee-trust itself and after the conclusion of the said search, the jurisdiction of A.P.Majeed Khan was notified to vest with the Assistant Commissioner of Income Tax, Central Circle, Thiruvananthapuram. In order to co-ordinate the enquiry and nvestigation in the case of assessee-trust, the jurisdiction with the assessee-trust was also notified by the Commissioner of Income Tax, Ward No.1, Madurai, vide D.No.1/2002-2003, dated 1.4.2002, issued by C.No.440/TTN/2002-03, transferring the case from Income Tax Office, Ward 1(2), Nagercoil, to the Assistant Commissioner of Income Tax, Central Circle, Thiruvananthapuram, following the directions of the Chief Commissioner of Income Tax, Madurai, who in-turn acted on the request of the Director of Income Tax, (Investigation), Cochin, who conducted the search operation und....
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....r submit that the transfer order was consequent to the search conducted under section 132 of the Income Tax Act and also on the basis of the 'Block assessment' in respect of A.P.Majeed Khan and the assessment of A.P.Majeed Khan was already over and has become final and therefore, the case of the assessee-trust need not be transferred to Thiruvananthapuram and it is also against the provisions of Section 158 BC & 158 BD. 8. The learned Senior Counsel appearing for the petitioner also referred the judgment reported in [2007] 290 ITR 316 (Cal), in the case of P.S. Housing Finance P. Ltd., and others vs, Union of India and others, [2007]293 ITR 399 (Gauhati), in the case of Smt.Avijeeth Mohanty Casshyap vs. Commissioner of Income-Tax and others and [2006]286 ITR (All) in the case of Sahara Airlines Ltd, and others vs. Director General of Income-Tax, (Investigation) and others, in support of his contention. 9. Mr.R.Sathiyamoorthy, the learned standing counsel appearing for the respondents Department submitted that the petitioner cannot have any objection for transferring the case from Madurai Circle to Thiruvananthapuram Circle, without pleading or proving the prejudice caused t....
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....the Official Gazette, specify. Therefore, when the assessment relates to different areas, then it can be decided by the authorities concerned, if there are in agreement and if they are not in agreement, by superior Officer named therein. 13. Section 127(2) (a) & (b), also deals with the same and Section 127(2)(a) & (b) reads as follows: "Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner:- "(a)where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner 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 Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, simila....
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.... the Commissioner of Income Tax, Madurai, after recording his reasons for doing so. Therefore, the preliminary requirement is the two Commissioners must be in agreement for such transfer and in that case, either of the Commissioner can pass, an order of transfer after giving opportunity to the assessee. 17. In this case, it is admitted and has also been made clear in the impugned order that the jurisdiction over the assessee-trust was notified by Commissioner of Income Tax Ward No.1, Madurai, by order, dated 01.04.2002, transferring the case from Income Tax Office, Ward No.1(2) Nagercoil, to the Assistant Commissioner, Central Circle,Thiruvananthapuram, following the direction of the Chief Commissioner of Income Tax, Madurai, who in-turn acted on the request of the Director of Income Tax (Investigation) Cochin, who conducted search operation under section 132 in the group of cases. Though, these details were not stated in the order, dated 01.04.2002, this has been stated clearly in para 4 of the impugned order. Therefore, originally the Commissioner of Income Tax, Madurai, passed the order of transfer, following the direction of the Chief Director of Income Ta....
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....tement that a search and seizure operation under section 132 of the Income Tax Act 1961 was conducted on 11.09.2001, in the case of A.P.M.Abdul Majid Khan, the Author & Managing Trustee, and other related assesses. The notification, did not even state what are the related assessees with A.P.M.Abdul Majid Khan. In the impugned order, also the agreement between the two officials was not stated and 10 reasons have been stated for transferring the case of the assessee-trust from Nagercoil to Thiruvananthapuram.. 21. Before going into the reasons or appreciating the reason for transferring stated in the impugned order, we will have to see the provision of chapter and XIVB Special procedure for assessment of search cases. It is admitted that under Section 132, a search was conducted in respect of A.P.Majeed Khan and Section 158(1) BC, deals with the procedures for Block assessment. 22. In this case, it is admitted that 'Block assessment' was ordered in the case of A.P.M.Abdul Majid Khan, and it was found that 'Block assessment' in the case of A.P.M.Abdul Majid Khan, was made on 30.09.2003 and a total undisclosed income of Rs.70,17,400/- was made and it has become fina....
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....r or appropriate to exercise power under the provision in the interests of the Revenue and for proper adjudication of the tax liability or collection thereof. thus, as a sequel to the principle, it follows that the transfer of cases can be ordered for facilitating the task of effective investigation and for best and co-ordinated assessment. The discretion to pass such an order has to be exercised keeping in mind the inbuilt restraint that such an action should not be taken arbitrarily or for any extraneous reason or with an ulterior motive but only with a view to get the correct assessment of tax done, wherein by and large, the factors which may be taken in account, are that the business of the assessee group is scattered and its activities are not confined at one particular place and it is necessary to have the assessment under one single authority, who may require access to all the records, which if seen together and cross-checked,may become clear and give the correct picture of the Income,on which, the assessment of tax is to be made or the accounts are maintained by different assesses of a group where there are inter-transactions of money, inter lacing of funds and ....
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.... having closed interaction and above all one of them resides at Delhi one of the directors/partners himself admits that heavy "cash amount" recovered from his premises at Delhi, belongs to his father at Kanpur and that out of 26 cases of the same group in question. 16 cases were assessed at Delhi. Otherwise also the distance between Kanpur and Delhi can be covered within a few hours and that the persons involved are already having their business transactions and activities between Kanpur and Delhi." 29. In the 3rd case, it has been held "there was sufficient material with the respondents to prima facie show in admissible expenditure by various distilleries in U.P. to various public servants. The petitioner's distillery prima facie was also shown as a unit, which had made payments between the yeas 2002-03 to 2005-06. The mere fact that the petitioner subsequently resigned from membership of the UPDA by itself was no answer. The respondents proposed to transfer the case after complying with the procedural requirements.' Therefore, in the above said three cases, there were materials available and spelt out in the order justifying the transfer. But ....
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....ndisclosed income of the relatives of the petitioner had fund its way to the petitioner. While dealing with that contention the High Court has held as stated above. In this case, admittedly, the 'Block assessment' order in respect of A.P.Majeed Khan, in respect of the undisclosed income has become final and therefore, there is no use in transferring the assessment of the assesee-trust to Thiruvanandapuram. The other reason stated in impugned order is that the assessee trust has also submitted 'Block return' in response to the notice, before the Assistant Commissioner Income Tax, Central Circle, Thiruvanandapuram and therefore, it was contended by the learned counsel appearing for the respondents that by submitting the Block assessment to the Assistant Commissioner of Income Tax Office, Central Circle, Thiruvanandapuram, the petitioner's trust acquiesced itself to the jurisdiction of the Assistant Commissioner, Central Circle, Thiruvanandapuram. In support of his said contention, the learned counsel appearing for the respondents, also relied upon the judgment reported in [1956]31 ITR 565 (SC) Pannalal Binjraj & Another vs The Union of India and others. In that judgment, ....
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....sistent with that right, and makes no objection while the act is in progress, he cannot afterwards complain. That is the proper sense of the work acquiescence. Duke of Leeds v. Amherst, 2 p.124. Delay and acquiescence do not bar a party's right to equitable relief on the ground of undue influence, unless he knew that he had a right or, being a free agent at the time, deliberately determined not to inquire what his rights were or to act upon them Jugal Kishore v. Charoo Chandra,AIR 1939 pc 159." "As per concise Oxford English Dicticnary toe word "Acquiesce" means accept or consent to some thing without protest. In P.Ramanatha Aiyar Concise Law Dictionary, Acquiescence, is defined as "The action or condition of acquiescing, the assent to an infringement of rights, either express or implied from conduct,by which the rights to equitable or discretionary relief may be lost [S.39, Indian Contract Act (9 of 1872]: a consent inferred from silence; a tacit encouragement. Acquiescence imports full knowledge. Acquiescence is the common element is a somewhat indefinite group of equitable estoppels, constituted by the fact that the person entitled has, as it is said, " spelt ....
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....der section 127 of the Act. In the absence of such liberty, the assessee cannot be stated to have been afforded a "reasonable opportunity" as is contemplated by the aforesaid provision. Thirdly, the reasons recorded in the final order passed under section 127 of the Act (by which the concerned/competent authority decides to execute the proposed action contemplated in the show-cause notice), must not only take into consideration the objections raised by the assessee, but the reasons recorded in the order must also have a direct nexus/bearing to the object sought to be achieved. Fourthly, belief/suspension even though bona-fide cannot be sufficient justification for recourse to any of the actions contemplated under section 127 of the Act. For a valid order under section 127 of the Act, the reasons expressed must disclose an actual financial nexus justifying the action.' Therefore, as per the above judgment, even in the show cause notice the respondent should disclose the reasons/basis for the contemplated action and in this case, it has been stated. Further, the reasons recorded in the final order must not only take into consideration the objection....
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....e found showing the inter-lacing and interconnecting transactions. b. The 2nd reason that the authorities competent to make Block assessment should be, an Assessing Officer not below the rank of an Assistant Commissioner and therefore, it has to be transferred to Thiruvananthapuram. Admittedly, in this case the Block assessment in respect of A.P.Majeed Khan was already over and the Assessee trust also filed Block assessment before the Thiruvananthapuram office by submitting a 'Nil' income and there is no finding that in the Block assessment filed by both the assessees, there are materials to show that interlacing of funds or inter-connected transactions. Hence, this reason also cannot be accepted. c. The 3rd reason that the Assistant Commissioner of Income Tax, Central Circle, Thiruvananthapuram, has issued notice to the Assessee trust is not also a valid ground. d. The 4th reason that the assessee has filed a Block return in response to the notice u/s.158BC before the Assistant Commissioner of Income Tax, Central Circle, Thiruvananthapuram, cannot also be accepted. As stated supra, it will not amount to acquiescence, as at the earliest point of time, the assessee trust h....