AI Drafter 
TaxTMI 
TaxTMI 
2016 (8) TMI 167
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....ile passing the order is for the purpose of coordinated investigation and assessment. The case has been ordered to be transferred from Ward No.3(3) (9), Ahmedabad to DCIT, Central Circle-3, Surat. 2.1 So far as SCA No.4474 of 2016 is concerned, therein also challenge is made by the petitioner to an order dated 6.1.2016 and consequential notice dated 4.3.2016 in which also the case of the petitioner is transferred from Ward No.3(2)(2), Ahmedabad to DCIT, Central Circle-3, Surat. 2.2 Similarly, in SCA No.4475 of 2016 is concerned, here also the legality, validity and propriety of an order dated 6.1.2016 as also notice dated 4.3.2016 came to be challenged whereby, the case of the petitioner came to be transferred from Ward No.3(3)(4), Ahmedabad to DCIT, Central Circle-3, Surat. 3. The case of the petitioner in almost all the three matters is similar and since SCA No.4473 of 2016 is treated as a lead matter, facts of the said case are taken into consideration while passing this common judgment and order. 4. It is the case of the petitioner that she is an individual having been regularly assessed with I.T.O., Ward-3(3)(9), Ahmedabad, was issued with a notice on 1.12.2015 by ....
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.... gathered which would permit the authority to link the petitioner with M/s.HVK International Group, Surat. It was submitted that the search which was carried out was under mistaken identity of Shri Sanjay Dhanak, a builder who constructed Shyam Residency in Science City Road, Ahmedabad and the petitioner's husband happened to be the purchaser of this flat, so much so that even said Mr.Dhanak has sworn an affidavit on 7.12.2015 which was also enclosed and then, submitted that the petitioner, who is an uneducated house wife, has no transaction of any nature with any person based in Surat. This reply was very much available on record of respondent No.1. However, the hearing which was scheduled on 23.12.2015 was again adjourned to 5.1.2016 and on 5.1.2.2016, in a brief hearing in the office of respondent No.1, it was mentioned that DGIT (Inv.) had already approved the centralization of all search cases and as such, respondent No.1 is bound to pass an order under Section 127(2) of the Income-Tax Act. This was informed during the course of brief hearing which took place on 5.1.2016. But, thereafter since nothing was heard from respondent No.1, another combined letter dated 25.1.2016 ....
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....o material found of any nature either in relation to any transaction, financial or business with M/s.HVK International Group, Surat and based upon that, it has been contended by learned counsel that before exercising power under Section 127 of the Act, subjective satisfaction of the transferring authority is a bare minimum requirement before passing an order. There is no material of any nature which would warrant the authority to transfer the case of the petitioner from Ahmedabad to Surat. It was also contended by learned counsel for the petitioner that even the petitioner has not been afforded any reasonable opportunity of hearing in the sense in which it has to been afforded and therefore, the order passed by the authority is grossly in violation of principles of natural justice. Even considering the reasons which are assigned in the order dated 6.1.2016 which is under challenge, there is no cogent explanation or the reason which would justify the transfer. A bare sentence of coordinated investigation and assessment would not sufficient enough to exercise jurisdiction to transfer the case from Ahmedabad to Surat. It was brought to the notice of the authority that under the mistak....
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....half of transferring authority has submitted that a detailed search was carried out at the premises and on the basis of material available, the authority has prima facie established the linkage of the petitioner with M/s.HVK International Group, Surat and resultantly, requested that the transfer has been made solely with an idea to execute effective and coordinated investigation and assessment and therefore, the authority is justified in passing the order which is impugned in the petition. Learned counsel further submitted that the aim of transferring the investigation is to undertake a fair investigation and assessment and therefore, such object may not be allowed to be frustrated at the instance of the petitioner. Learned counsel further submitted that the condition to effect the transfer as contemplated under Section 127 of the Act has been considered by the authority and keeping in view the sole object underlying the statutory provision, the order came to be passed. By filing affidavit-inreply, learned counsel has submitted that sufficient opportunity was given to the petitioner to represent the case and it has been submitted that only after considering the material produced an....
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....espective parties and having gone through the material on record and giving our anxious consideration with the material on record as compared to the orders which are impugned to the petitions, prima facie it appears to this Court that the authority has not acted in a just and proper manner. Before adverting to the contentions raised by learned counsel for the respondents representing the authorities, we may refer to the statutory provisions in which the authority is entrusted with the power. Relevant Section 127 of the Act as such reproduced hereunder: "Section 127. (1) The [Principal Director General or] Director General or [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner 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, 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 Of....
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....ng 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.]" 9. On plain reading of the aforesaid provision of law, it is emerging that while exercising the jurisdiction under the said statutory provision, a reasonable and effective opportunity is required to be given to a person concerned. This reasonable opportunity would mean that an effective opportunity must be given coupled with an appropriate application of mind and after arriving at a subjective satisfaction on the issue, an appropriate order is required to be passed. Law requires that every administrative order must be in consonance with well recognized principles of natural justice and the natural justice compliance demands not only mere granting of reasonable opportunity but also to assign cogent reasons and assigning of reasons is nothing but a part and parcel of compliance of principles of natural justice and therefore, the authority under a legal obligation to exercise the power in a manner in which the statute demands and here, from the ma....
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....ardy. 11. Even from the material on record, it is emerging that the authority has no specific material on record or any independent material to link thep petitioner in any manner with M/s.HVK International Group, Surat. The authority appears to have drawn inferences and simply because Shri Sanjay Dhanak had some linkage with M/s.HVK International Group, Surat, the authority presumed that petitioner also must have remove connections and thereby, in casual exercise of power, the provision of Section 127 of the Act is resorted to and transferred the case from Ahmedabad to Surat. Even to examine whether any linkage remotely is found of the petitioner with said M/s.HVK International Group, Surat, this Court has gone through the statements recorded during the course of search which are attached to the memo of petition from Page-49 onwards and from those questions - answers also which are part of the record, it would emerge that by any stretch of imagination, it can be said that the petitioner has any linkage with said M/s.HVK International Group, Surat. This Court found from the statements, material on record as well as from the affidavits filed in a cognate petitions that no connecti....
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.... the same arising out of very same search proceedings. Relevant extract of the said affidavit dated 7.12.2015 is reproduced hereinunder : "4. That, I came to know Shri Lalabhai Kamabhai Bharwad and his family members viz. Smt.Anuben Lalabhai Bharwad, Shri Ashok Lalabhai Bharwad and Shri Pintoo Lalabhai Bharwad because of the above deal only. 5. That, I do not have any financial or other business transaction with Shri Lalabhai Kamabhai Bharwad, Smt.Anuben Lalabhai Bharwad, Shri Ashok Lalabhai Bharwad and Shri Pintoo Lalabhai Bharwad, Ahmedabad so far except the deal as per Para.3 above besides having received advances from Shri Lalabhai Kamabhai Bharwad against the promise of sale of office premises at 11/12/12A, Shyam Residency, Science City Road, Ahmedabad The above facts are true and correct as per my knowledge and belief. Signed and verified on 7th December,2015 at Ahmedabad." 14. From this overall set of circumstance, reverting back to the facts of the present case which are almost similar substantially in nature, we are of the opinion that the power exercised by the authority under Section 127 of the Act is thoroughly uncalled for in the absence of any linkage m....