TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 212
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....earched person'). Later, the petitioner was subjected to survey operations by the Income-tax authorities. According to the petitioner, during the survey operations, though discrepancies in valuation of inventory was noticed, no incriminating materials were found indicating any transaction between the petitioner company and the searched person. 4. On 10.08.2015, the respondent issued a notice to the petitioner proposing to transfer the petitioner's case records to Kolkata. The petitioner was called upon to state whether it has any objection to transfer the case to Kolkata. In such notice, it was conveyed that the transfer of the case was for centralization of the assessment under the charge of the Principal Commissioner of Income-tax, Kolkata. In response to such notice, petitioner made a detailed representation dated 26.08.2015, raising six specific points why the petitioner's assessment should not be transferred to Kolkata. The respondent issued yet another notice dated 15.09.2015, conveying that the reasons putforth by the petitioner for non centralization of the case to Kolkata were not found tenable since search under section 132 of the Act was carried out in case ....
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....ot perse justify transfer of the assessment of the petitioner. 8. In support of his contention, the counsel placed reliance on the judgment of Division Bench of this Court in case of Shree Ram Vessel Scrap P. Ltd. v. Commissioner of Income-tax, reported in 355 ITR 255, in which, referring to large number of judgments from different Courts in context of the powers of the income tax authorities to transfer assessment cases under section 127 of the Act, this Court had made certain observations. Counsel submitted that the said judgment was rendered in background of a group of connected assesses being subjected to search operation which is not the case in the present petition. 9. On the other hand, learned counsel Shri Parikh for the department opposed the petition contending that the principal Commissioner after giving sufficient opportunity of being heard to the petitioner, has passed the impugned order, which suffers from no illegality. Cogent reasons have been recorded for transferring the assessment proceedings. Whether the petitioner was subjected to search or not is not important at this stage. It was found that the petitioner had transactions with the searched persons. To avoi....
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....e or disprove the submission of the assessee the proposed transfer of case for so called coordinated investigation is unjustified and that for assessing the income based on recorded transactions there is no necessity of transferring the case to Kolkata as proposed. (iii) It is on record that company's registered office is situated at Bharuch as mentioned above and all the books of accounts, statutory records are maintained there. The company is regularly filing its return of income in the Income tax office at Bharuch and is assessed there. The company's accounts, finance and taxation matters are attended by the Finance Officer based at Bharuch. The shifting of the assessment jurisdiction to Kolkata as proposed would cause undue hardship and difficulty to the company in terms of compliance with the regular requirements of the Income tax Office at Kolkata. (iv) As already stated, the various affairs of finance, accounts and taxation are attended by the same Finance Officer and his absence from the office at Bharuch for attending tax matters at Kolkata would affect the day to day functioning of the company. The company operates with a very lean staff and his absence from t....
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....nent to mention here that there is no compulsion of personal attendance of the directors at any stage. The assessee can authorize any person as per law to attend the case on behalf of the assessee with the help of the directors who have already establishment at Kolkata." He further observed as under: "9. Further, for making any comment on any issue one need to have the process i.e. "coordinated investigation" and that can only happen while proceedings of assessment u/s.153A / 153C of the I.T.Act as the case may be and for that, the investigations & assessments of entities requires to be made centrally by one Officer i.e. DCIT, CC1( 4), Kolkata. 10. Nonetheless, it is a fact that the actions u/s. 132 / 133A of the I.T.Act has been carried out in the M/s. Hindusthan Engineering & Industries Ltd. group which requires coordinated investigation and assessments. There is nothing on merit which the assessee could contest on the issues of transfer, and hence it has taken various irrelevant pleas that have no nexus with reference to section 127 for the purpose of transfer of the case. ... 13. The kind of web which has been woven by the tax payers and the discrepancies in valuation ....
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....ntralized 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." Thus, clearly this circular of CBDT relates to the searched cases where number of group assessee's are subjected to search operations and whose assessments are within the jurisdiction of different Assessing Officers. 13. If we therefore, eliminate this angle of the petitioner being subjected to search, a wrong premise on which the Principal Commissioner proceeded in his impugned order, what is left is that in his opinion "the kind of web which has been woven by the tax payers and the discrepancies in valuation of inventory that will require detailed and coordinated investigation to be conducted centrally with the group cases and therefore, it will be contrary to the existing instruction and law on the subject, if the cases are allowed to remain with the regular Assessing Officer". For several reasons, his observations and conclusions are erroneous. Firstly, after referring to some alleged web woven by the tax payers and the discrepancies in valuation of inventory, he concluded that the group cases will have to be centralized,....
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....of Section 127 provides that nothing contained in subsection( 1) or subsection( 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. Subsection( 4) of Section 127 provides that the transfer of a case under subsection( 1) or subsection( 2) may be made at any stage of the proceedings and shall not render necessary the reissuance of any notice already issued by the Assessing Officer from whom the case is transferred. 21. Exercise of power under subsection( 1) and subsection( 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 Ajanta Industries(supra) communicating such reasons also to the assessee. Subject to fulfillment of such procedural requirements, the authority under section 127 enjoys considerable discretion while exercising the power contained in subsection( 1) or subsection( 2) thereof. Such discretion ofcourse has to be exercise....
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....erred from one place to another only as long as atleast one of the case of the group is pending at such place. Section 127 of the Act does not recognise or provide any such limitation on exercise of the powers. Discretion is wide and may be required to be exercised in varieties of situations. We neither can, nor propose to foresee all of them." 15. In the said decision thus, while recognizing wide discretionary powers of the competent Revenue Authorities to transfer assessment cases under section 127 of the Act in public interest, the Court also recognized a degree of prejudice or inconvenience that may be caused to the assessee whose assessment may be lifted from his principal place of business and may be put at the disposal of an assessing authority who may be situated at another place far away from the assessee's place of business. The power of transfer of cases therefore, would have to be exercised in proper cases when sufficient material on record justify such action. This is, however, not to suggest that transfer of cases for effective investigation and coordination can be resorted to only in cases of assesses who are subjected to search operations. This requirement may....