TaxTMI 
TaxTMI 
2013 (3) TMI 153
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....ost of these institutions are in and around Pune. However, 6 out of the 63 institutions are situated in Mumbai. The Petitioner consists of 18 Trustees and 17 of whom are based at Pune. c) On 8/2/2012, the Commissioner of Income Tax, Central, Pune issued a show cause notice to the petitioner. By the above notice the Petitioner was informed that consequent to the search proceedings conducted in respect of one Uday Namdeo Salunke on 20/11/2010 all cases belonging to the Salunke group were centralized with the Dy. Commissioner of Income Tax, Central Circle-12, Mumbai. It was thereafter suggested by the Assessing Officer (Dy. Commissioner of Income Tax, Central Circle-12, Mumbai) that the cases pertaining to the Petitioner be centralized with him for the purposes of co ordinated investigation. In view of the above, the Petitioner was called upon to show cause to the proposed transfer on or before 15/2/2012. d) On 8/2/2012 itself, the Petitioner responded to the show cause notice dated 8/2/2012 objecting to the transfer of its case from Pune to Mumbai. The Petitioner pointed out that since its inception its head office is at Pune and the meetings of the Petitioner also takes place at P....
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.... in Writ Petition No.5866 of 2011 it had stated that cash seized during the search had nothing to do with the petitioner and a contrary stand was being taken in the present proceedings. Further, the Petitioner also brought on record their letter dated 29/10/2012 objecting to the notice under Section 153C of the Act. 5. Mr. J. D. Mistri, Senior Advocate in support of the Petition submits as under:- a) The impugned order dated 2/8/2012 is bad in law as no personal hearing was granted to the Petitioner before passing the impugned order under Section 127(2) of the Act. An order under Section 127(2) of the Act has to be preceded by a personal hearing as held by this Court in its order dated 12/9/2012 passed in Writ Petition No.596 of 2012 (Sahara Hospitality Ltd. v. Commissioner of Income Tax-8 and others). b) The impugned order dated 2/8/2012 is in breach of principles of natural justice inasmuch as the notice dated 8/2/2012 given to the Petitioner proposing the transfer was an inadequate notice in as much as the various circumstances and reasons which would warrant transfer of the Petitioner' case from Pune to Mumbai were not spelt out in the notice though the same are found extens....
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....ing it almost impossible for the Commissioner at Pune to complete the assessment for Assessment Year 2010 -2011 before the time barring date i.e. 31/3/2013. (e) Further in this case, the proceedings under Section 153C of the Act could be commenced by the Assessing Officer at Mumbai even before the assessment of the searched person Salunke was completed. This was possible as the assessing officer is presently the same at Mumbai for Salunke group and the Petitioner. In case the jurisdiction of the Petitioner is restored to Pune jurisdiction then the notice under Section 153 C of the Act can only be issued after Assessment of the searched person i. e. Salunke is completed. This would delay the proceeding and cause prejudice to the revenue. 7. We have considered the submissions. It is a settled position in law as held by this Court in the matter of Sahara Hospitality Ltd.(supra) that before an order of transfer of case is passed under Section 127(2) of the Act, an opportunity of personal hearing is mandatory, wherever it is possible to do so. In the present matter the show cause notice proposing the transfer of the Petitioner's case from Pune to Mumbai was issued by the office of the....
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....re this court only on 2/1/2013.The Court took into account the above delay and held that as a consequence of the Petitioner's delay, the assessment for assessment year 2010-2011 would become time barred on 31/3/2013.Thus in the above facts it held that the assessment for assessment year 2010-2011 would alone stand transferred to Delhi. However, so far as the other years are concerned, the order was set aside and the Commissioner of Income Tax was directed to give personal hearing to the petitioner before passing an order of transfer under Section 127(2) of the Act. However, the facts in this petition, particularly the conduct of the Petitioner, is completely distinguishable. The impugned order of transfer was passed on 2/8/2012 and the same was received by the Petitioner on 30/8/2012. The Petitioner filed the present petition on 11/10/2012 and moved this court for the first time on 23/10/2012. The Respondent thereafter sought time to file their affidavit in reply and the same though dated 14/12/2012 was filed on 13/2/2013. Thereafter this petition was adjourned from time to time and the matter was heard only on 25/2/2013 and 27/2/2013. In these circumstances, no complaint on accoun....
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....ued before us by the revenue and the assessee on the basis that no personal hearing was granted to the petitioner before passing the impugned order dated 2/8/2012. Moreover the Affidavit in reply filed by the revenue does not give any particulars of the date when the hearing was offered to the Petitioner's. In view of the above circumstances it appears to us that no personal hearing was granted to the Petitioner before passing the impugned Order dated 2/8/2012. 11. We do not find substance in the submission of the Respondent-Revenue that there is no requirement to offer a personal hearing as the same was not asked for by the Petitioner. This court in the matter of Sahara Hospitality (supra) has held that it is mandatory wherever it is possible to do so on the part of the Revenue to grant a personal hearing before passing an order under Section 127(2) of the Act. Thus merely because the Petitioner had not specifically asked for a personal hearing it will not absolve the revenue of its obligation to ordinarily grant such a hearing. Similarly, the participation, if any, by the Petitioner before the Officer at Mumbai was without prejudice to its challenge to his jurisdiction, as the s....
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....e's case be centralized with the Assistant Commissioner of Income tax,Central Circle-12 Mumbai. (i) During the course of search in the case of Shri. Uday Namdeo Salunkhe, Director of Willingkar Institute of Mumbai, it was noticed that the entire process of admission under the Institutional quota is in following two stages. a) Profile of the students are collected and analyzed by the institutes and b) The list is submitted to the Managing Council of the Shikshan Prasaraka Mandali Trust for decision regarding admission. The admission committee comprises of Chairman, Local Managing committee of the Institute and Members of the Managing Council of M/s. SPM Trust, Pune. (ii) During the curse of search in the case of Shri. Uday Namdeo Salunke Director of Welingkar Institute of Mumbai, evidences indicating receipt of donations for admissions under management quota in the institutions being managed by the assessee Trust have been found. Prof. Samir Karkhanis was confronted with the evidences. He stated that the figures on the paper are donation fees received from the students whose names are also recorded therein. (iii) Institutions charging donations against the admissions are locate....
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....ance by the revenue upon the decision of the Supreme Court in the matter of Ajantha Industries(supra) is entirely misplaced. 15. The giving of notice containing the reasons for the proposed action is a basic postulate for compliance of the Audi Alteram Partem Rule. It is axiomatic that unless a party is informed of the reasons for the proposed action, it would be impossible for the noticee to put forth its point of view with regard to the reasons for the proposed action. The views of the noticee are to be considered by the authority before taking any decision to confirm or drop the notice. A show cause notice to be effective must be adequate so to enable a party to effectively object/respond to the same. The authority concerned is obliged to consider the objections, if any, and thereafter reach a finding one way or the other. This alone ensures absence of arbitrary exercise of powers by the authorities. Thus, there has been failure of Audi Alteram Partem Rule and the case of the Petitioner has been transferred in breach of natural justice de hors the non giving of personal hearing to the Petitioner. In that view of the matter also the order dated 2/8/2012 passed by the respondent ....