TaxTMI 
TaxTMI 
2006 (2) TMI 97
X X X X Extracts X X X X
X X X X Extracts X X X X
....y has its factory/office and residence at Delhi. The said Pradeep Kumar is also a director in M/s. Trimurti Fragrances P. Limited, the petitioner in the present case. A search and seizure operation under section 132(1), Income-tax Act (for short "the Act"), was conducted both at Kanpur and Delhi on July 2, 2003, at the sites belonging to the petitioners of the group of writ petitions, (viz., (1) W.P. No. 755/2005: Virendra Kumar Jain v. CIT; W.P. No. 756 of 2005 Vijay Kumar Pradeep Kumar v. CIT [2006] 283 ITR 541 (All); (2) W.P. No. 55 of 2006 R.K. Agarwal v. CIT; W.P. No. 56 of 2005; N.K. Agarwal v. CIT and W. P. No. 57 of 2006; Y.K. Agarwal v. CIT [2006] 283 ITR 532 (All)). The admitted facts on record have been noted by us in our judgment dated February 16, 2006 in Civil Miscellaneous Writ Petition No. 428 of 2004; Vijaykumar Gauri Shankar v. CIT [2006] 283 ITR 524 (All) and Civil Miscellaneous Writ Petition No. 1808 of 2004: Sanjay Kapoor v. CIT. The aforesaid Pradeep Kumar Agrawal and others owning and managing the business of the petitioners are closely related to each other, there are inter se transactions and even handsome cash in crores was recovered from the premises o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....missioner of Income-tax, Central Circle-9, New Delhi, vide his order dated January 23, 2004) from the Assessing Officer mentioned in column (5) to the Assessing Officer mentioned in column (6) thereof." Being aggrieved, M/s. Trimurti Fragrances P. Ltd. has filed the above petition contending, inter alia, amongst others, that the petitioner company has no concern with the firm known as "Vijai Kumar Gauri Shankar" except that its director, Pradeep Kumar Agrawal also happens to be a partner of the firm "M/s. Vijay Kumar Gauri Shankar"; that the petitioner company had opened a section of it in Delhi with a view to promote sales in North India even though the entire sales and other activities of the company were finalised at Kanpur; that notice dated February 16, 2004/ annexure 1 to the petition was a blank notice as it spells out no reasons necessitating transfer of the cases in question, the petitioner has however submitted his reply dated February 20, 2004/annexure 2 to the petition and that the Commissioner of Income-tax has passed the impugned order of transfer dated February 22, 2005, which is a "laconic non-speaking order" wherein no reasons have been indicated which impellled....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that Ganesh Chaudhary, FCA, was not in the full knowledge of facts of the case hence reasonable opportunity was not afforded. The salient features of the aforementioned cases are that the partners, directors and individuals whose cases are the subject matter of assessment are closely related or otherwise having close business relation indulging in commercial transaction having cross entries. It is also not disputed that one of them, Pradeep Kumar Agrawal admittedly has his factory and residence at Delhi. Shri Ravi Kant, senior advocate, referred to the impugned order dated February 22, 2005, and submitted that it contains no reasons as required under section 127(2) of the Act. In support of it emphasis is being laid on the fact that the object and reasons are altogether different things. According to the petitioner the expression co-ordinated investigation amounts to disclosing the "object" and not the "reasons". The other submission is that the convenience of the assessee is not only a relevant consideration but also deserves to be given due weight. In support of the aforesaid contention he referred to the case of Pannalal Binjraj v. Union of India [1957] 31 ITR 565, 584;....
X X X X Extracts X X X X
X X X X Extracts X X X X
....use the case of a particular assessee is transferred from the Income-tax Officer of an area within which he resides or carries on business to another Income-tax Officer whether within or without the State will not by itself be sufficient to characterize the exercise of the discretion as discriminatory. Even if there is a possibility of discriminatory treatment of persons falling within the same group or category, such possibility cannot necessarily invalidate the piece of legislation. 29. It may also be remembered that this power is vested not in minor officials but in top-ranking authorities like the Commissioner of Income-tax and the Central Board of Revenue who act on the information supplied to them by the Income-tax Officers concerned. This power is discretionary and not necessarily discriminatory and abuse of power cannot be easily assumed where the discretion is vested in such high officials, (vide Matajog Dobey v. H.C. Bhari [1955] 2 SCR 925 at page 932; AIR 1956 SC 44 at page 48. There is moreover a presumption that public officials will discharge their duties honestly and in accordance with the rules of law. (vide People of the State of New York v. John E. Van De. Carr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e as it should be, the assessee will not be put to any inconvenience or harassment and the proper balance between the rights of the subject and public interest will be preserved. 33. It is, therefore, clear that the power which is vested in the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, under section 5(7A) of the Act is not a naked and arbitrary power unfettered, unguided or uncontrolled so as to enable the authority to pick and choose one assessee out of those similarly circumstanced thus subjecting him to discriminatory treatment as compared with others who fall within the same category. The power is guided and controlled by the purpose which is to be achieved by the Act itself, viz., the charge of income-tax, the assessment and collection thereof, and is to be exercised for the more convenient and efficient collection of the tax. A wide discretion is given to the authorities concerned, for the achievement of that purpose, in the matter of the transfer of the cases of the assessees from one Income-tax Officer to another and it cannot be urged that such power which is vested in the authorities is discriminatory in its nature." In para. 36....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Delhi High Court (sic) had also taken a view in consonance with the view taken by the Allahabad High Court in the case of Peacock Chemicals P. Ltd. [1990] 182 ITR 98. Reference may also be made to the Division Bench of this court in the case of Mahesh Chand Vishan Swarup v. CIT [1991] 187 ITR 177, wherein this court observed "We must emphasise that the ground of transfer is ensuring of proper and co-ordinated investigation. That ground was clearly stated in the show-cause notice" and on that basis dismissed the writ petition filed by the assessee. Learned counsel on behalf of the petitioners, attempted to support their case by referring to the apex court judgment in the case of Canara Bank v. Debasis Das [2003] 4 SCC 557, wherein the hon'ble Supreme Court has reiterated the accepted basic principle of adherence to the principles of natural justice, which says that" ... no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t is to be noted that legal formulations cannot be divorced from the fact situation of the case. Personal hearing was granted by the appellate authority, though not statutorily prescribed. In a given case post-decisional hearing can obliterate the procedural deficiency of a pre-decisional hearing (see Charan Lal Sahu v. Union of India [1990] 1 SCC 613; AIR 1990 SC 1480". In the instant case admittedly notice was given. The petitioner had submitted his reply taking the plea of inconvenience in particular and thereafter, the impugned order dated February 22, 2005/annexure 3 to the writ petition has been passed wherein the concerned authority has specifically noted "for co-ordinated investigation". We find nothing wrong with the said order inasmuch as the petitioner had reasonable opportunity to place his case. Moreover, the petitioner has not been able to show any particular prejudice caused by transfer of the case in view of the attending facts and circumstances of the instant matter, wherein assessment is to take place with respect to a group of persons, common family members, business concerns having close interaction, and above all one of them resides at Delhi; one of the dire....