AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2004 (3) TMI 56
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....by learned standing counsel, Income-tax Department. Adverting to the facts of the case, the petitioners are individual partnership firms carrying on the business of supply of and trading in food grains. Their respective registered offices are situated in Guwahati. They are income-tax assessees. There are four partners each relating to their respective firms. According to the averments made in the writ petition, the partners of the petitioners partnership firms have their separate business interest/ventures in the form of sole proprietorship/partnership which are totally unconnected with the affairs and the business of the petitioners. On March 12, 2003, the Income-tax Department conducted a survey under section 133A of the Income-tax Act, 1961, in the business premises, and godowns of the petitioners. Various books of account and documents were impounded during the said survey along with stock of food grains which were duly inventoried and copies of such inventories were duly furnished to the petitioners. The Income-tax Department also conducted search and seizure operations in the residential premises of the partners at Silliguri, Mirik and Ningalia in the State of West Beng....
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....being heard in connection with centralising and transfer of the assessment records from Guwahati to Kolkata for co-ordinating investigations since a search and seizure, was conducted against the Rathi group of cases on March 12, 2003, and survey under section 133A against the following assessees. In response to notices, Shri Ramesh Kumar Rathi, partner of Ramesh and Company, and Shri Brij Mohan Rathi, partner of Rathi and Company, appeared and submitted written submission for non-willingness for the proposed transfer. I have considered their submissions and find them of routine nature. I am unable to appreciate the assessee's view point and therefore reject the submission as for co-ordinated and effective investigation, the centralisation of the cases are necessary. In view of the above and in exercise of powers conferred by clause (a) of sub-section (2) of section 127 of the Income-tax Act, 1961 and all other powers enabling me in this behalf, I, the Commissioner of Income-tax, Guwhati-II, hereby, transfer the income-tax and wealth-tax cases of the persons, the particulars of which are mentioned in the Schedule below from the Assessing Officers mentioned in column 4 to the Asse....
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....transfer of the cases. Dr. Saraf, learned counsel appearing for the petitioner, submitted that the impugned order dated November 6, 2003, is on the face of it cryptic and does not disclose any reason not to speak of any cogent reason. According to him, the reasons as mentioned in the impugned order cannot be said to be specific and tangible requiring and/or warranting transfer of the cases from the jurisdiction of the Income-tax Officer, Guwahati, to the jurisdiction of the Assistant Commissioner of Income-tax, Kolkata, under the provisions of section 127 of the Income-tax Act. There being no search and seizure against the petitioner unlike in the case of the other partners whose business is also totally unconnected with the business of the petitioners and the petitioners having their own entity, the impugned order dated November 6, 2003, could not have been passed and that too on vague and indefinite reason as indicated in the order itself, Dr. Saraf submitted. According to him, the ground specified for transfer of the cases is grossly arbitrary and unauthorised and if allowed to stand, would cause serious prejudice to the petitioners, more particularly in view of the fact that....
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....is now to be seen in the given fact situation as to whether the impugned order dated November 6, 2003, can stand judicial scrutiny. Section 127 of the Income-tax Act, 1961, deals with the power to transfer cases and the impugned order has been passed as per the said provisions which reads as follows: Section 127 of the Income-tax Act, 1961: "127. (1) The Director General or Chief 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 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 Director General or Chief Commissioner or Commissioner,-- (a) where the Directors General or Chief Commissioners or Commissioners to whom such A....
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....ber 6, 2003, transferring the cases from Guwahati to Kolkata assigning the aforementioned reason. According to learned counsel for the petitioners, the reason assigned is no reason at all and the requirements of issuing notice giving an opportunity to the party concerned to have their say in the matter relating to transfer of the case cannot be an empty formality. The reason assigned at the bottom of the order dated November 6, 2003, "Administrative convenience and for co-ordinated and effective investigation", according to learned counsel for the petitioner is vague and indefinite. It is in this context the aforesaid decisions have been pressed into service. It will be expedient and imperative to examine those cases. In the case of Saptagiri Enterprises [1991] 189 ITR 705, the Division Bench of the Andhra Pradesh High Court held the reason "to facilitate detailed and coordinated investigation" to be vague and too general in nature and not specific and based on material facts. It relied upon an earlier decision of the same court in interfering with the transfer of the case on the basis of the above mentioned reason. In the case of Vijayasanthi Investments Pvt. Ltd. [1991] 187 IT....
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....pex court in Ajantha Industries [1976] 102 ITR 281, held the reasons assigned in the order of transfer of the case to be valid. In that case the reason assigned was "to facilitate co-ordinate investigations along with other connected cases". Such disclosure was held to be sufficient reason. It was held that in the matter of a transfer of a case under section 127 of the Act, the convenience of the assessee cannot override the need of the Revenue for a better investigation of the case. In the case of Maheshwari Lime Works [1984] 147 ITR 804 of the Division Bench of the Madhya Pradesh High Court, the transfer of the cases for the purpose of detailed and co-ordinated assessment was held to be justified. The said High Court found support from the decision of this court as reported in Assam Surgical Co. v. CBOT [1984] 145 ITR 400 (Gauhati). In the case of Madhav Sharan Agrawal [1996] 221 ITR 809, the Division Bench of the Allahabad High Court, held the reasons for transfer of the cases "to centralise the cases of all the stock brokers" to be valid. In the case of Redwood Hotel (P.) Ltd. [2003] 259 ITR 191, a single judge of the Kerala High Court held that the assessee has no vested right....
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....er section 133A against the petitioners. It was in that context the transfer of the cases sought to be made and the impugned order dated November 6, 2003, was passed. The records produced on behalf of the Department revealed that the "Rathi" group of cases pertaining to which the aforesaid operations were carried out on March 12, 2003, and thereafter at different places consist of 36 assessees and the names of the petitioners find place at serial Nos. 27 and 28 of the said list of the assessees. The records also revealed that the search operations carried out in the "Rathi" group of cases led to the seizure of cash and other assets. The impugned decisions were arrived at for centralisation of the "Rathi" group of cases and this is precisely the reason as to why the impugned order was passed assigning the reason of necessity for centralisation of the cases for co-ordinated and effective investigation which cannot be said to be akin or similar to the reason assigned like "for detailed and co-ordinated investigation" or "for facility of investigation". The reason is discernible from the impugned order itself and it is not a case of not assigning any reason. If the centralisation of....
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....n the grounds set forth in the show cause notice. It was in that context, the apex court held that section 127(1) of the Act requires recording of reasons and communication thereof to the assessee. However, in the instant case as in the case of Assam Surgical Co. v. CBDT [1984] 145 ITR 400 (Gauhati), the impugned order dated November 6, 2003, does contain reasons and were duly communicated to the petitioners. Therefore, the infirmities found by the apex court in the case of Ajantha Industries [1976] 102 ITR 281 (SC) are totally absent in the instant cases. The competent authority on perusal of the entire records and after obtaining necessary information arrived at the conclusion that the entire group of cases numbering 36 including that of the petitioners are required to be centralised for effective and co-ordinated investigation. Such a finding arrived at cannot be faulted and the judgment, in the case of Assam Surgical Co. [1984] 145 ITR 400 rendered by the Division Bench of this court as noticed above fully supports the case of the respondents. Necessity of centralisation of cases for co-ordinated and effective investigation cannot be said to be an invalid ground for transferrin....
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....e petitioners, it will lead to an absurdity and will be contrary to common sense of the situation. The petitioners were given due opportunity to submit their objections and it was on consideration of the materials on record and having regard to the necessity for centralisation of all the cases of the particular group for effective and co-ordinated investigation, the impugned order was passed which reason cannot be said to be omnibus or too general, rather such a reason is sound, appealing to commonsense and in conformity with the object and purpose for which the provisions of section 127 of the Income-tax Act, 1961, were incorporated. In the instant cases the petitioners were informed in writing about the proposal to transfer their cases under section 127 of the aforesaid Act from Guwahati to Kolkata asking them to submit their objections if any which they complied with without any reservation and asking for any further materials. It was on that basis the impugned order of transfer dated November 6, 2003, was passed. Cogent and sufficient reasons have been assigned in the order itself which find full support from the records as noticed above. Although the reasons for transfer ha....