TaxTMI 
TaxTMI 
2011 (10) TMI 472
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....ssioner of Income Tax, Bikaner under Section 127 of the Act transferring the assessment proceedings of the petitioner's case from ITO Ward-2, Sriganganagar to D.C.I.T. (Central), Bikaner and as many as 15 cases of family members were transferred to Bikaner by the same order. 3. The petitioner has challenged both these, Annex-4 order under Section 127 of the Act dated 07.07.2009 and notice under Section 153A of the Act of 1961 (Annex-5) dated 24.08.2009, by way of present writ petition. 4. Learned counsel for the petitioner, Mr. Suresh Ojha, urged that Section 127 (1) of the Income Tax Act, 1961 enjoins upon the assessing officer, a duty to record his reasons for transfer of any case from one assessing authority to another. He submitted that no such reasons were recorded in the present case and, therefore, the order Annex-4 dated 07.07.2009 of respondent No. 2, Commissioner is vitiated. He further submitted that impugned notice issued under Section 153A of the Act (Annex-5), is also liable to be quashed because said provision of Section 153A of the Act can be invoked only if a search was initiated against the assessee- trust itself under Section 132 of the Act; and since no su....
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....Tax, under Section 127 of the Act for transferring its case from ITO, Ward-2, Sriganganagar to D.C.I.T. (Central) Bikaner vide notice Annex-1 dated 13.05.2009. A reply thereto was filed by the assessee vide Annex-2 dated 02.06.2009 asking the said authority to supply the reasons for transfer of the jurisdiction for the assessee so that the petitioner-Trust may file proper objection, if any. The respondent No. 3, Commissioner again issued a notice Annex-3 dated 10.06.2009, in which it was clearly stipulated that "transfer of jurisdiction is required for the purpose of coordinated investigations, being a case closely connected with the search case. Your reply should reach the undersigned within seven days from the receipt of this notice, failing which it will be presumed that you have no objection in transfer of your case to the Central Circle, Bikaner." Surprisingly, the assessee did not file any response to this notice Annex-3 dated 10.06.2009 and no objections thereafter appear to have been filed by it before the learned Commissioner of Income Tax, Bikaner. Accordingly, drawing the presumption that the assessee had no objection to the transfer of its assessment proceedings from....
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....of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) 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 orders transfer....
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....ssment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation: For the removal of doubts, it is ....
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....red, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. " Validity of order under Section 127 of the Act 10. In the opinion of this Court, while it is true that Section 127 of the Act requires the competent authority to record his reasons for transferring any case from one Assessing Authority to another, such reasons apparently appear to have been recorded and communicated to the petitioner vide Annex-3 dated 10.06.2009, namely, that such transfer of case from Sriganganagar to Bikaner was required for coordinated investigation as the petitioner trust was a case closely connected with the search, since the search was conducted under the warrant of authorization under Section 132 of the Act purportedly issued in the name of three individuals (S/Sh. Shyam Sunder Tantia, Jagdish Rai Tantia and Anil Tantia). There is no dispute from the side of....
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....administrative reasons after considering the objections of the assessee. The reason, which were just and reasonable, were recorded in the file. It has been held that the transfer was valid even though the order of transfer and reasons therefor were communicated to the assessee in the block assessment proceedings. Section 127 only provides for an administrative arrangement authorizing, inter alia, Chief Commissioners to transfer the files from one Officer to another for better and more efficient handling of the files. When group cases are handled, it is always desirable to have one Officer handling all the assessments together so that related transactions can be better appreciated by the Officer. [Redwood Hotel (P.) Ltd. v. Chief CIT, [2003] 259 ITR 191 (Ker). In the facts of that case, the order of transfer of the cases of assessees belonging to a group in order to facilitate search operations has been held to be valid. Also see, One-up shares & Stock Brokers (P.) Ltd. v. R.R. Singh, CIT [2003] 262 ITR 275 (Bom.). Necessity of centralisation of cases for co-ordinated and effective investigation cannot to be said to be an invalid ground for transferring the cases belonging to ....
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....e the regular Assessing Authority at Sriganganagar. The assessee obviously did not comply with the notice, but challenged the same before this Court, straightway by way of present writ petition even though objections vide Annex-8 dated 07.09.2010 and Annex-9 dated 14.09.2010 were pending and were not yet decided, therefore, in the opinion of this Court, the present writ petition is premature one, as no final order has been passed against the assessee so far. 16. Prior to the concept of block assessment introduced by Finance Act, 1995, there was no special provision under the Act for making assessment or reassessment of any other person with respect to whom, books of account, documents or assets were found during search of any person. Under such situation, normal provisions of the Act for reopening of the case relating to other persons were applicable. As per Finance Act, 1995, with the introduction of concept of block assessment, special provision to assess undisclosed income of any other person was legislated under Section 158BD. As per Finance Act, 2003, concept of block assessment was abolished and new procedure for assessment and reassessment in search cases was introd....
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....of assessee, Annex-8 dated 07.09.2010 and Annex-9 dated 14.09.2010, are yet to be decided. Moreover, there is no case of there being a different Assessing Officers for the petitioner Trust and the individual family members since all the assessment proceedings for all connected assessees of said family and the present petitioner-Trust, stand transferred under a valid and legal order under Section 127 of the Act vide Annex-4 dated 07.07.2009 to the respondent No. 1 Assistant Commissioner (Central), Bikaner. The legal position in this regard settled by the Hon'ble Supreme in the case of G.K.N. Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 in relation to reassessment proceedings and powers under Sections 147 and 148 of the Act which apply mutatis-mutandis to search and consequential assessment proceedings also in the following terms: "When a notice under section 148 of the Income-tax Act, 1961, is issued, the proper course of action for the noticee is to file the return and, if he so desires, to seek reasons for issuing the notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to ....
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....e all the issues arising in the appeal on merits but would also be free to decide the issue relating to legality and validity of the raid challenged by the appellant after giving due opportunity to the Department to justify the raid proceedings conducted under Section 132 ibid." 19. Chapter XIV of the Income Tax Act, 1961 dealing with the procedure for assessee comprising Section 139 to 158 of the Act deal with various provisions relating to filing of returns, enquiry, assessment, best judgment assessment, time limits etc. Sections 153A to 153D of the Act deal with assessment procedure in case of matter relating to search and seizure under the provisions of Section 132, 132B of the Act contained in Part C of Chapter XIII providing for income tax authority and powers of such authorities. The said Chapter relating to procedure for assessment and other provisions relating to appeals and revisions contained in Chapter XX comprises sections 246 to 269 of the Act. Thus the Act provides a complete mechanism for dealing with various assessments and remedial measures under the Income Tax Act. 20. It is true that extraordinary jurisdiction of this Court under Articles 226 and 227 of th....