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2017 (9) TMI 1040
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....'s assessment from DCIT, Circle2, Ahmedabad to ACIT, Central Circle, at Moradabad. 3. The petitioner challenged such order before this Court by filing Special Civil Application No.9010/2016 mainly on the ground that the same was passed in breach of the principles of natural justice. It was argued that the notice issued by the Principal Commissioner did not contain any reasons why the assessment was proposed to be transferred. It was also contended on behalf of the petitioner that without supplying necessary information and documents though asked for and without even conveying the date of further hearing, the Principal Commissioner passed an exparte order transferring the assessment. It was also contended that transferring the assessment at a place nearly 700 kms away from Ahmedabad would cause great prejudice and inconvenience to the petitioner. On behalf of the Revenue, the petition was opposed contending that the authority passing the order of transfer had granted hearing to the petitioner and thereafter, passed the order recording proper reasons. 4. The Court allowed the petition by a judgment dated 18.7.2016 on the ground that the requirement of hearing before passing....
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....h and seizure action u/s. 132 of the I.T.Act was Conducted on 30/07/2015 and 31/07/2015 by the DDIT (Inv.), Moradabad in the case of M/s. Genus Paper & Board Group. The residential premises of the Director, your factory premises at Gandhidham and your Corporate Office at Ahmedabad were also covered in this proceeding. 3. It is noticed from the Disclosure of Related Party Transactions made in your Audited Financial Report for F.Y.201112, that following transactions have been made by you with other members of the Genus group of companies: (Rs. in Lakhs) Particulars Relation with your company Nature of transaction Amount of transaction in F.Y. 2011­12 Balance o/s. As on 31.03.2012 Amount of transaction in F.Y. 2010­11 Balance o/s as on 31.03.20 11 Genus Power Infrastructure Pvt. Ltd. Associated Party Sale 1237.69 399.54 Dr. 1554.64 453.20 Dr. Advance Given/ Received Adjusted 160.00 Genus Paper Products Ltd Associated Party Sale ­ __________ 7.23 5.95 Dr. Purchase of Raw Material ­ ­ Advance Given/ Received Adjusted 295 Kailash Coal & Coke Co Ltd. Associated Par....
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....se prejudice to the petitioner. Ignoring such pleas of the petitioner, the Principal Commissioner, Ahmedabad, passed the impugned order dated 23.11.2016 in which it was observed as under : "4. The assessee company vide its various submissions has neither denied nor disowned the fact that there are common shareholders between itself and Genus Group. It has also emerged that the assessee company has intergroup transaction with Genus Group. Both the share holding, the intergroup transactions and other aspects of the case need to be investigated in coordination with other members of the Genus Group. 5. In view of the above facts, in exercise of the powers conferred under sub section 2(a) of Section 127 of the Income Tax Act, 1961 and all other powers enabling me in this behalf. I, the Pr. Commissioner of Incometax2, Ahmedabad hereby transfer the case mentioned in column No.2 of the Schedule hereunder from the Assessing Officer mentioned in column No.4 to the Assessing Officer mentioned in column No.5 thereof." 7. Appearing for the petitioner, learned counsel Shri Naresh Jain raised the following contentions : 1) The High Court having previously quashed the order of transfer....
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....to New Delhi. Thus, there is an agreement between the Commissioners of Incometax, New Delhi and Mumbai as required in terms of section 127(2)(a) of the Act was available. Therefore, this objection is not sustainable. In view of all the above reasons, we do not find any reason to entertain this petition." 9. From the record it can be seen that earlier when the department had passed the order transferring the assessment of the petitioner, the same was struck down by the High Court on the ground that the requirement of hearing was not fulfilled. The Court noted that before passing the order, all that the Principal Commissioner had done was to issue the notice to the petitioner to attend his office and to state why the case should not be transferred. The Court was of the opinion that without indicating reasons why such proposal was being considered, it would not be possible for the petitioner to imagine the grounds and meet with them in anticipation. This was the basis on which the order of transfer was quashed. It is well settled that when an administrative action is struck down on the ground of breach of principles of natural justice, action does not stand terminated and ....
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....m. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from whose jurisdiction the case is to be transferred 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, pass the order; (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, t....
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....to be transferred and the Assessing Officer or the officers to whom the case is to be transferred are not subordinate to the same Principal Directors General, Director General, Principal Chief Commissioners, Chief Commissioners or Principal Commissioners or Commissioners, the transfer of case would be only when such authorities to whom the Assessing Officers concerned are subordinate are in agreement. In such a case, the Principal Director General, Director General, Principal Chief Commissioner or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred would pass an order after giving the assessee a reasonable opportunity of being heard and after recording the reasons wherever it is possible. 15. Section 127 of the Act is founded on three principles. One is the requirement of transferring the assessment in appropriate cases which would have element of public interest. Second is that the assessee cannot choose his Assessing Officer. Section 124 of the Act which lays down the jurisdiction of the Assessing Officers ensures proper administration of assessments giving consistency, transparency and predictability on the question of which Assessing Offi....
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....see and pass a reasoned order. The second element is that his agreement for transfer of the case cannot be equated with the decision to transfer. The decision can be reached only after hearing the assessee. He can form a final opinion that the case is to be transferred only after hearing the assessee, failing which, his decision would be exparte. Without the representation or involvement of the assessee, the requirement of hearing would then be rendered into an empty formality. 16. It is in this background that we would have to examine the question of agreement between the two Principal Commissioners. From the original files made available for our perusal by the counsel for the Revenue, we notice that on 21.9.2015, the Principal Director of Incometax( Investigation) Kanpur, had written to the Principal Commissioner of Incometax, Central, Lucknow, pointing out that search and seizure operations were carried out in Genus Paper and Board group of companies by the Dehradhun unit of Directorate on 30.7.2015. Subsequently, vide letter dated 14.9.2015, the Additional Director of Incometax, Dehradhun, had sent a proposal for centralisation of 42 cases of the group proposing to centralis....
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....e two heads of the jurisdiction from where as assessment is transferred to where it is being transferred. There is no format in which such agreement must be recorded or conveyed. As noted, the additional duty of the authority from whose jurisdiction the assessment is being transferred is to give a reasonable opportunity of being heard to the assessee and then to pass an order citing reasons. This would necessarily be after he agrees to allowing the assessment to be transferred. When therefore, Principal Commissioner of Ahmedabad had issued notices to the petitioner on more occasions than one proposing to transfer the assessment, his agreement for such transfer was writ large on the face of the record. Had this been a case where the authority to whom the assessment was being transferred and whose agreement is not found on record, the issue would have to be seen in a different light. We cannot put the requirement of clause(a) to subsection( 2) to section 127 of the Act in such a straightjacket formula that even when the competent authority grants a hearing to the assessee and, thereafter, passes a reasoned order transferring the assessment, his action would fail merely because in wri....
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....mmissioner of Incometax reported in (2013) 355 ITR 255 (Guj) had upheld the Revenue's stand that for effective and coordinative investigation, if otherwise established on the record, was a good enough ground for transfer of a case. It was observed as under : "20. Section 127 of the Act, as already noticed, pertains to power to transfer cases. Subsection( 1) empowers the Director General, Chief Commissioner or the Commissioner after giving the assessee a reasonable opportunity of being heard wherever it is possible to do so and after recording his reasons, transfer any case from one more or more Assessing Officers subordinate to him to any other Assessing Officer or Assessing Officers also subordinate to him. Likewise, under subsection( 2) of section 127 after following similar procedural requirements, it is open for the Director General, Chief Commissioner or Commissioner to transfer a case from one Assessing Officer to another who is not subordinate to him in agreement with the authority to whom he may be subordinate. Subsection( 3) of Section 127 provides that nothing contained in subsection( 1) or subsection( 2) shall be deemed to require giving of any such opportun....
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....rse an order of such nature can and need to be quashed if it is demonstrated that same is passed either without jurisdiction or is actuated by mala fide either in fact or in law." 22. As pointed out by Ms. Bhatt in case of Aamby Valley Ltd.(supra), Division Bench of Bombay High Court held as under : "8. We have considered the submissions. The power to transfer cases under Section 127 of the Act is to be undoubtedly exercised after following the principles of natural justice. However, the discretion of the authority to transfer a case has to be examined on the touchstone of the same not being arbitrary and/or perverse and/or mala fide. If there are reasons in the impugned order which indicates due application of mind to reach a view to transfer a case from one jurisdiction to another, then this Court will not interfere with the discretion of the administrative authority who transfers the case. This discretion is vested by the Act in high ranking officers viz. Commissioner of Income Tax and the necessity to transfer a case from the jurisdiction of one officer to another officer for better administration of the Act could be diverse and impossible to enumerate. It is for th....