AI Drafter 
TaxTMI 
TaxTMI 
2013 (10) TMI 982
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....5, 2012, under section 127(2) of the Income-tax Act, 1961 ("the Act" for short), transferring such pending assessments from Bhavnagar to Ahmedabad. Such orders were challenged by the petitioners before this court in Special Civil Application No. 11843 of 2012 and connected petitions. Such petitions were disposed of on October 10, 2012, on the assurance of the Revenue that the Commissioner shall withdraw such order and pass such further fresh orders as may be found necessary after following the due process of law. 3. Thereupon, the Commissioner issued a show-cause notice dated October 11, 2012, in which it was stated as under : "At the outset, it is to intimate that the centralization order passed under section 127(2) of the Income-tax Act on June 15, 2012, in your case is withdrawn. A fresh opportunity is being given to you to explain as to why your case should not be centralized at Ahmedabad for effective and co-ordinated investigation in your group cases. Accordingly, you are granted an opportunity to convey your objections in writing, if any, within 10 days from the date of receipt of this letter. If you want to present your....
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.... general. It does not specify the grounds on which the Department desired to transfer the cases. In the absence of any opportunity to meet with such grounds, requirement of hearing cannot be stated to have been fulfilled. (2) In any case, such reason is not sufficient permitting the Department to transfer the cases. He submitted that this is the only ground on which the cases have been transferred by the Commissioner. Counsel further submitted that the cases could have been centralised either at Bhavnagar or Mumbai where the petitioners file their returns having their establishments and businesses. (3) Counsel lastly submitted that none of the assessees were assessed at Ahmedabad. All the assessees were filing their regular returns and were being assessed either at Bhavnagar or Mumbai. Transfer of cases at places where none of the assessees have their establishments, would be wholly impermissible. (4) In support of his contention that the reason indicated in the showcause notice and adopted in the final order for transferring the cases, namely, "for effective and co-ordinated investigation" is not sufficient to exercise the powers under section 127(2) of the Act, counsel r....
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....then the DGIT (Inv.) should identify the CIT charge in which the group searched will be centralized in consultation with the CCIT in whose jurisdiction the main case of the group are assessed to tax within seven days of initiation of search." 7.2 Counsel submitted that the reasons stated in the show-cause notice for transferring the cases cannot be stated to be vague or general. The final order clarified that the cases were being transferred at Ahmedabad since it was necessary that group cases are centralised at one place in Gujarat. Since the Department did not have a Central Circle office in Bhavnagar, the cases were transferred at Ahmedabad after giving option to the assessees if they so preferred that the cases be transferred either at Surat, Baroda, Rajkot or Ahmedabad. 7.3 In support of her contention that the reason "for effective and co-ordinated investigation" cannot be stated to be insufficient or vague or general, counsel relied on the following decisions : (1) General Exporters v. CIT reported in [2000] 241 ITR 845 (Mad) ; (2) Arti Ship Breaking v. Director of Income-tax (Investigation) reported in [2000] 244 ITR 333 (Guj) ; (3) Redwood Hotel P. Ltd. v. C....
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....ees. It is necessary that the group cases are centralised at one place in Gujarat where the Department has offices under Central Range for carrying out co-ordinated investigations as no centralisation proposal from Mumbai office has been received in respect of this group of assessees. In view of the above, the objections of the authorised representative overruled and it is ordered that their cases be centralized with the ACIT, Central Circle-1(3), Ahmedabad. Accordingly, the following jurisdictional order is being passed. " 9. From the above, it can be seen that the reason for transfer of cases from Bhavnagar to Ahmedabad was that for group cases arising out of common search operations, they were required to be consolidated. Further, in view of the fact that the assessments arose out of search operations, they were required to be centralised and placed at the disposal of central wing of the Income-tax Department. Since Bhavnagar did not have such wing, they were under proposal for transfer at Ahmedabad. During the course of hearing, the authorised representatives of the petitioners was offered that the cases could be transferred either at Surat Baroda or Rajkot. The authorised r....
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....3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation.-In section 120 and this section, the word 'case', in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year." Section 127(2) of the Act emp....
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....r Kothari (supra), the learned single judge of the Gauhati High Court referring to the Supreme Court judgment in the case of Ajantha Industries [1976] 102 ITR 281 (SC) and Naresh Kumar Agarwal [2010] 320 ITR 361 (Cal) held and observed as under : "13. Section 127 mandates that the assessee must be given a reasonable opportunity of being heard while exercising the power to transfer cases. Although a rider 'wherever it is possible to do so' is also there, it is not the case of the respondents that it is not possible to do so. Further, the order is to be passed after recording the reasons for doing so. Apart from the fact that the petitioner was not provided with any opportunity of being heard in the matter, the reasons assigned in the order dated July 24, 2007, which is 'administrative convenience and for co-ordinating effective investigation' also cannot be said to be the reasons as envisaged in section 127(1) of the Act. It is in this context, Mr. Kapoor, learned counsel for the petitioner, has referred to the aforesaid two decisions rendered by the Andhra Pradesh High Court and the Calcutta High Court. In both the decisions, the ....
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....or a moment that 'administrative convenience' and/or 'co-ordinated investigation' cannot be a valid ground for transferring the cases belonging to a particular group to a single Assessing Officer. It would be a good ground for transfer but the requirement of law, which has to be observed before transferring the assessee's case from one officer to another, is that the assessee must be appraised of the basic and broad facts, which, in the opinion of the authorities concerned, necessitate co-ordinated investigation by a single Assessing Officer, to enable the assessee to put forth his viewpoint on the issue so that a considered decision is taken to prevent unnecessary harassment to the assessee and at the same time the object of the transfer is achieved, which of course is the prime consideration in such like matters." From the above, it can be seen that in the above decisions courts have taken a view that the reason for co-ordinated and effective investigation or similar such expression would not be a sufficient ground for transferring the assessment proceedings. We may record that the Calcutta High Court in the case of Naresh Kumar Agarwal (Supra) had opined that such ground indi....
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....y refer to our judgment rendered today, i.e., February 23, 2006 in Writ Petition No. 355 of 2005 : Trimurti Fragrances P. Ltd. v. CIT [2006] 283 ITR 547 (All), wherein we had an occasion to deal with this aspect in detail." (2) In the case of Trimurti Fragrances P. Ltd. [2006] 283 ITR 547 (All) a Division Bench once again upheld the transfer of assessment proceedings on the ground that for co-ordinated investigation, it was necessary to do so. It was observed as under: "23. In the instant case, this court takes notice of the fact that 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. The inconvenience projected by the assessee in question cannot be said to be of that magnitude which could prevail over other relevant considerations. 24. In view of the above, we find that there has been sufficient compliance with principles of natural justice and the impugned order of transfer cannot be said to be arbitrary or devoid of any rationale or in any way based on irrelevant conside....
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....ow that there was any extraneous consideration or that reasons given were non existent or irrelevant." (4) In the case of General Exporters [2000] 241 ITR 845 (Mad), the learned single judge of the Madras High Court held that the transfer of assessment cases for co-ordination of investigation is a good ground. It was a case where the assessment proceeding was transferred from the Madras to New Delhi. The learned judge observed as under (page 855) : "As noticed above, the very object of transfer is to achieve the object of the Act. If co-ordinated investigation is necessary for the purpose of proper assessment, prevention of evasion of tax, collection of tax and other relevant matters, then the proper and co-ordinated investigation is a good ground for transfer of the case. It cannot be laid down as a proposition of law that the said ground cannot be a valid ground for transfer. In a given case, the same may not be a good ground for transfer, on being noticed that the co-ordinated investigation in no way will help to achieve the object of the Act. No doubt, transfer of a case from the place where the assessee has its place of re....
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.... 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 the petitioner-trust that these persons against whom warrant under section 132 of the Act was issued and executed, a search was carried out at their place, are family members and are related with the petitioner-trust being its trustees. On the other hand, the Revenue has contended that even the name of petitioner-trust was mentioned in the search warrants. Therefore, it cannot be said that there was no reasons for transfer of the proceedings from Sriganganagar to Bikaner. Adequate opportunity was given to the petitioner to raise its objections against such transfer, but except filing a preliminary reply, annexure 2, dated June 2, 2009, in which the assessee really asked for further reasons in order to enable him to file appropriate objections, no such objections were really filed by it even though the assessee was specifically called upon to do so, vide annexure 3 dated June 10, 2009, in which reasons for such transfer were even communicated to the assessee-trust. ....
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....ding assessments came up for consideration. The thrust of the argument of the petitioners in the said cases was that the reasons though may have been recorded by the Commissioner for passing the order of transfer, the same were not communicated to the petitioner. In view of the decision of the Supreme Court in the case of Ajantha Industries [1976] 102 ITR 281 (SC), the order would be bad in law. While not accepting such a contention, this court in the context of reasons recorded for effecting the transfer observed as under: "We have gone through the record and we have also perused the reasons which have been given by the concerned authority for transferring the case of the petitioner under section 127 of the Act. It is clear that the case of the petitioner has been transferred from Bhavnagar to Rajkot for administrative reasons. It has been submitted by learned advocate Shri Naik and it has been stated in the affidavit filed by the Deputy Commissioner of Income-tax (Central Circle-I), Rajkot, that after completion of the work with regard to the search, the work pertaining to assessment was handed over to the Office of ....
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....g Officer to another who is not subordinate to him in agreement with the authority to whom he may be subordinate. Sub-section (3) of section 127 provides that nothing contained in sub-section (1) or sub-section (2) shall be deemed to require giving of any such opportunity where the transfer is from any Assessing Officer to another and offices of all such officers are situated in the same city, locality or place. Sub-section (4) of section 127 provides that the transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings and shall not render necessary the re-issuance of any notice already issued by the Assessing Officer from whom the case is transferred. 19. Exercise of power under sub-section (1) and sub-section (2) of the Act comes with certain procedural requirements, namely, of granting a reasonable opportunity of being heard in the matter wherever it is possible to do so, of recording of reasons for passing such order and as provided by the Supreme Court in Ajantha Industries [1976] 102 ITR 281 (SC) communicating such reasons also to the assessee. Subject to fulfilment of such procedural requirements, the authority under section 127....
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....nder the rule of law nor do the courts step into the areas exclusively reserved by the suprema lex to the other organs of the State. Decisions and actions which do not have adjudicative disposition may not strictly fall for consideration before a judicial review court. The limited scope of judicial review succinctly put are : (i) Courts, while exercising the power of judicial review, do not sit in appeal over the decisions of administrative bodies. (ii) A petition for a judicial review would lie only on certain welldefined grounds. (iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or illegal. (iv) A mere wrong decision without anything more is not enough to attract the power of judicial review ; the supervisory jurisdiction conferred on a court is limited to seeing that Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice. (v) The courts cannot be called upon to undertake the Government duties and functions. The court shall not ordinarily interfere with a policy ....
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....r administrative, will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary (See State of U. P. v. Renusagar Power Co., AIR 1988 SC 1737. At one time, the traditional view in England was that the executive was not answerable where its action was attributable to the exercise of prerogative power. Professor De Smith in his classical work Judicial Review of Administrative Action, fourth edition at pages 285-287 states the legal position in his own terse language that the relevant principles formulated by the courts may be broadly summarized as follows. The authority in which discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it ; it must not act under the dictates of another body or disable itself from exercising discretion in each individual case. In the purported exercise of its discretion, it must not do what it has been forbidden to do, nor must it do what it has not been authorized to do. It mus....
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....n areas of governmental activity, national security being the paradig, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the government's claim is bona fide. In this kind of non-justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the Royal Prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service [1984] 3 All ER 935 (HL) this is doubtful. Lords Diplock, Scaman and Roskil appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject matter of a particular power, in that case national security. Many prerogative powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs, but some are reviewable in principle, including the prerogatives relating to the civil service where national security is not involved. Another nonjusticiable power is the Attorney General's prerogative to decide whether to institute lega....
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....ps also in the interests of the assessees that cases be consolidated and be placed before one single Assessing Officer. This would avoid duplication of collection of evidence and assessment of evidence. This would also avoid conflict of opinions. The reason that being search cases they had to be placed before a centralised circle office also cannot be stated to be irrelevant. The Department for internal convenience and efficient functioning, it has created a special branch for dealing with search cases and has decided to conduct assessments of such cases under such wing, surely the assessee cannot have any objection to the same. The assessee has no right in law to insist that his case be kept out of consideration of such branch. The assessees were offered alternative of placing their cases either at Rajkot, Baroda or Surat. It is not even suggested before us that such offer was not made. Under the circumstances, we do not find any infirmity in the orders under challenge. 23. We, therefore, side with the school of thought that the reason "for effective and co-ordinate investigation" for transfer of assessment cases is neither vague nor ground not insufficient. Particularly, in th....