AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 1756
X X X X Extracts X X X X
X X X X Extracts X X X X
....eafter another notice was issued on 20th May, 2013 under s. 127 of the IT Act for transferring the assessment cases of the petitioners from Ratlam to Indore and the reason mentioned in the notices was that for administrative convenience and for facilitating coordinated investigation in the group cases with reference to interlinked documents/transactions, the cases are required to be consolidated and transferred from Ratlam to Indore. Petitioner No. 1 again filed his objection on 27th May, 2013 and stated that his earlier reply filed on 6th May, 2013 should be treated as reply to the new show-cause notice. The petitioner also informed that the group cases were already centralised at Ratlam vide order dt. 16th May, 2012 and notices have been issued under s. 153A by the Dy. CIT, Ratlam. Other petitioners have also submitted their objections and they have adopted the reply filed by the petitioner No. 1. The petitioners further stated that finally an order was passed on 31st May, 2013 transferring the cases of the petitioners from Ratlam to Indore. The petitioners have raised various grounds while challenging the validity and legality of the order dt. 31st May, 2013. The contention of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation and assessment, is not at all sufficient as the assessee should have been intimated about the reasons in a comprehensive manner in order to enable him to make an effective representation. Learned counsel for the petitioners has further relied upon a judgment delivered by the Delhi High Court in the case of Power Controls v. CIT [2000] 241 ITR 807 and again his contention is that non-disclosure of specific reasons for transfer will vitiate the order of transfer passed by the Competent Authority. Learned counsel for the petitioners has also placed reliance upon a judgment delivered in the case of General Exporters v. CIT [1998] 234 ITR 860 (Mad.) and his contention is that in the aforesaid case as the show-cause notice was silent and no reasons were disclosed, no opportunity of hearing was afforded to the assessee who had filed objections, the order passed under s. 127 was quashed and, therefore, in the present case also the order passed in similar circumstances deserves to be quashed. Learned counsel for the petitioners has also placed reliance upon a judgment delivered by the Calcutta High Court in the case of Lords Distillery Ltd. v. CIT [2007] 294 ITR 147 and his contention....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at Ambika Solves Ltd., Indore, Narayan Niryat India (P) Ltd., Indore, Avalanche Realty (P) Ltd., Indore and Narayan Ambika Infrastructure (P) Ltd., Indore are having their registered Office at Satyageeta Apartment, 90/47, Sneh Nagar, Main Road, Indore and except for Ambika Solves Ltd., all other cases were assessed at Indore. Respondents have further stated that the case of Suresh Chandra Garg had the address of Akola but was being assessed at Ratlam; cases of Ms. Rashmi Garg, Shri Kailash Chandra Garg and Shri Pawan Garg had the same address at Indore and the case of Ms. Rashmi Garg was assessed at Indore. The residence of Shri Kailash Chandra Garg, Shri Pawan Kumar Garg and Ms. Rashmi Garg is at 87, Samrat Ashok Nagar, Behind Sapna Sangeeta, Indore and, therefore, contention of the petitioners that their offices and residences were located within the territorial jurisdiction of Ratlam, is false. The respondents have further stated that the order has been passed by the Competent Authority i.e., the CIT, Ujjain and the CIT, Ujjain has acted well within his jurisdiction and passed an order for centralisation dt. 31st May, 2013 as per the provisions of the IT Act, 1961. It has also b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r of cases. Respondents have also stated that the order passed by them is in consonance with the statutory provisions and they have placed heavy reliance upon a judgment delivered by the High Court of Chattisgarh in the case of CIT v. Union of India (Writ Appeal No. 27 of 2013, decided on 14th March, 2013). The respondents have prayed for dismissal of the writ petition. 4. Heard learned counsel for the parties at length and perused the record. 5. The petitioners before this Court are aggrieved by an order passed under s. 127(2) of the IT Act, 1961 transferring cases of the petitioners from Ratlam to Indore. A show-cause notice was issued on 30th April, 2013 for centralisation of the cases with Dy. CIT (Central), Indore Region, which reads as under : "Government of India Ministry of Finance (Department of Income-tax) Office of the Commissioner of Income-tax Aayakar Bhawan, Bharatpuri, Ujjain Telephone (0734) 2527843, Fax- 2515611 F.No. CIT/UJN/CS./13-14/431 Dated : 30th April, 2013 To, Ambika Solves Ltd., Satyageeta Apartment, 90/47, Sneh Nagar, Main Road, Indore. Sir, Sub : Centralization of your case with Dy. CIT (Central), Indore-Reg. Pursuant to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed your objection on the proposed centralization. In the light of typing error as mentioned above, you are once again given another opportunity to place your further comments, if any, on the subject-matter. You are requested to furnish your reply or appear personally/through Authorized Representatives by 10th May, 2013. (Vijyendra Kumar) Dy. CIT (H Qrs.) For CIT, Ujjain." 7. The petitioners did submit a reply to the show-cause notice and raised various grounds and the Competent Authority after considering the reply filed by the petitioners, the CIT, Ujjain again issued a letter on 20th May, 2013 granting one more opportunity to the petitioners either by appearing in person or through Authorised Representative or through written statement on 28th May, 2013 and the same reads as under : "Government of India Ministry of Finance (Department of Revenue) Office of the Commissioner of Income-tax Aayakar Bhawan, Bharatpuri, Ujjain Telephone (0734) 2527843, Fax-2515611 F. No. CIT/UJN/CS./2013-14 /868 Dated : 20th May, 2013 To, Ambika Solvex Ltd., Satyageeta Apartment, 90/47, Sneh Nagar, Main Road, Indore, Sir, Sub : Centralization of your case with Dy....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... search and seizure cases involving number of interlinked group cases. Thus, your case is proposed to be centralized with Dy. CIT (Central), Indore. (Vijyendra Kumar) Dy. CIT (Hrs.) For CIT, Ujjain." 8. The petitioners did submit their reply to the aforesaid notices which was an exhaustive notice and finally an order has been passed on 31st May, 2013. The order passed by the CIT is, in fact, a very exhaustive order and it contains all minute details of the proceedings which have taken place and also the CIT has dealt with all the objections raised by the petitioners. The order passed under s. 127 of the IT Act, 1961 reads as under : "Office of The Commissioner of Income-tax, Aayakar Bhawan, Bharatpuri, Ujjain Office (0734) 2527204/Fax : (251561) Order under s. 127 IT Act, 1961 Dated 31st May, 2013 Search & seizure operating was carried out on 19th Jan., 2012 in the Ambika Solvex Group of Mandsaur and Indore. The 28 cases of the group were centralized with the Dy. CIT, Ratlam, vide order under s. 127 dt. 10th/16th April, 2012. Thereafter notice dt. 30th April, 2013, 6th May, 2013 and 20th May, 2013 were issued in all the 28 cases proposing to centralize these....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of sufficient staff at Indore while staff of Jaora and Mandsaur would conveniently manage affairs at Ratlam so centralization at Indore will cause grave hardship. Out of the 12 cases, the cases at serial No. 1, 4, 5 and 6 had the same address at Indore and out of them only one case was previously assessed at Ratlam that of Ambika Solvex. The case at sl. No. 2 had address of Akola but was being assessed at Ratlam. Cases at serial No. 8, 9 and 10 have the same address at Indore but out of them only 1 case was at Indore and 2 were Mandsaur. This shows that assessee has adequate setup at Indore including the residence at 87, Samrat Ashok Nagar at which Shri Kailash Garg, Shri Pawan Garg and Smt. Rashmi Garg are based and only Smt. Rashmi Garg was filing return at Indore. The other two were filing at Mandsaur. The fact of closing of Indore office had not been communicated to the Department earlier. The distance between Indore and Ratlam is not so as to cause any hardship and other concerns of the group who are based at Mandsaur which is further then Ratlam, from Indore have expressed no such hardship in the matter. It is further to be noted that in the region there was no separate ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icated the reason for transfer as 'centralization' for 'coordinated' investigation'. It was for this reason that order for transfer were made. There was no denial of reasonable opportunity to the assessee. Another objection which the assessee has raised is that the charge of CIT (Central), Bhopal is presently with an officer who was actively involved in planning and execution of search operation hence if cases are centralized justice may be denied. Such an argument cannot be a ground at this stage as the post of CIT (Central) is merely being held as an additional charge only. Further the cases involved in planning & execution of the search. In view of the above after duly considering the objections the above cases are directed to be centralized with the Dy. CIT (Central), Indore for coordinated investigation and better administrative control of the work. The list of cases centralized hereby is as per enclosed annexures force w.e.f. 3rd June, 2013. (M.S. Pawar) CIT, Ujjain copy to : 1. The Chief CIT, Indore 2. The Director on IT (Inv.), Bhopal 3. The CIT (Central), Bhopal 4. The CIT-I & II, Indore 5. The Addl. Director of IT (Inv.), Indore 6. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) or sub-s. (2) may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the AO or AOs from whom the case is transferred. Explanation.-In s. 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending 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." 11. Keeping in view the aforesaid statutory provisions, in the present case, it can never be said that the principles of natural justice have been violated by the respondents. Exhaustive show-cause notices were issued to the petitioners and they have filed reply to the show-cause notice. It has been argued that the reason "for effective and co-ordinate investigation" cannot be said to be sufficient ground for transfer. 12. Learned counsel for the petitioner has placed heavy reliance upon a judgment delivered in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssigned is certainly "coordinated investigation and assessment", the objection of the assessees have been dealt with by the Competent Authority and, therefore, taking into account the judgment delivered by the High Court of Gujarat in the case of Shree Ram Vessel Scrap (P) Ltd. v. CIT [2013] 215 Taxman 203/32 taxmann.com 120 as opportunity of hearing has also been granted to the petitioners, their objections have been considered, the judgment relied upon by the learned counsel for the petitioners is again of no help. 15. Learned counsel for the petitioners has also placed reliance in the case of Power Controls (supra) and his contention is that merely by mentioning that the cases are to be transferred for coordinated investigation, does not mean that proper reasons has been assigned by the Competent Authority. His contention is in the aforesaid case the impugned order passed under s. 127 was set aside. This Court has again gone through the aforesaid judgment and in the aforesaid case out of four petitioners only in one case it was mentioned that the proposed transfer is for coordinated investigation. In the present case, specific and cogent reasons have been assigned to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t, on the other hand, has placed reliance upon a judgment delivered by the Gauhati High Court in the case of Continental Milkose (India) Ltd. v. CIT [2013] 351 ITR 292. It was a case of assessment pursuant to search and seizure operation and the case of the petitioner therein was transferred from Dibrugarh to New Delhi for effective coordinated investigation and administrative convenience. The Division Bench of the Gauhati High Court has held the reason to be a valid reason while upholding the order passed under s. 127 of the IT Act. In the present case also a similar reason has been assigned for transferring the cases to Indore and, therefore, this Court is of the considered view that no interference is called for in the peculiar facts and circumstances of the case. 19. The issue relating to transfer on the ground of effective and co-ordinated investigating has been dealt with in depth by the Division Bench of the High Court of Gujarat in the case of Shree Ram Vessel Scrap (P.) Ltd. (supra). The Division Bench of the Gujarat High Court, in haras 17 to 25 has held as under : "17. We would therefore, like to express our opinion on the issue. 18. Sec. 127 of the Act, as alr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erest on one hand and personal inconvenience on the other. However, as long as such powers are exercised bona fide, for public purpose and in the interest of Revenue, the role of the Court to dissect such reasons and to come to a different conclusion would be extremely limited. It is by now well settled that judicial review against the administrative order in exercise of writ jurisdiction, the Court is concerned with the decision making process and not the final decision itself. Unless the reasons which prompted the competent authority to transfer the case can be stated to be wholly irrelevant or arbitrary, the Court would not interfere with such reasons. Of course 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. 20. In case of State of UP v. John Mal AIR 2004 SC 3800, Supreme Court observed as under : '28. The scope and extent of power of the judicial review of the High Court contained in Art. 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iate the facts of a given case as otherwise the decision cannot be tested under the grounds of illegality, irrationality or procedural impropriety. How far the Court of judicial review can reappreciate the findings of facts depends on the ground of judicial review. For example, if a decision is challenged as irrational, it would be wellnigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case and coming to a plausible conclusion and then testing the decision of the authority on the touch-stone of the tests laid down by the Court with special reference to a given case. This position is well settled in Indian administrative law. Therefore, to a limited extent of scrutinizing the decision making process, it is always open to the Court to review the evaluation of facts by the decision maker. In case of State of N.C.T. of Delhi v. Sanjeev alias Bittoo AIR 2005 SC 2080, the Court observed as under : 15. One of the points that falls for determination is the scope for judicial interference in matters of administrative decisions. Administrative action is stated to be referable to broad area of Governmental activities i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the Courts to assert their power to scrutinize the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is illegality' the second 'irrationality', and the third 'procedural impropriety'. These principles were highlighted by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service (1984) 3 All. ER. 935 (commonly known as CCSU case). If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. [See CIT v. Mahindra & Mahindra Ltd. AIR (1984) SC 1182]. The effect of several decisions on the question of jurisdiction has been summed up by Grahame Aldous and John Alder in their book "Applications for Judicial Review, Law and Practice" thus : 'There is a general presumption agains....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ground that cases were required to be centralised. Since Bhavnagar did not have Central Range Office, they could be transferred at Ahmedabad. Their request that cases be consolidated at Bhavnagar or Mumbai was considered but not accepted. They were instead offered alternative places for transfer of cases within the jurisdiction of Surat, Baroda or Rajkot Office. They did not accept the offer. It was thereupon that the CIT proceeded to finalise his proposed transfer of cases from Bhavnagar to Ahmedabad. 22. We do not find that the CIT committed any error either in law or in facts. Reason for transfer was clearly indicated in the show-cause notice namely, for centralisation of cases and for effective and coordinated investigation. Such reasons were further elaborated while dealing with and disposing of the objections of the petitioners in the final order of the transfer. Before doing so, the Authorised Representative of the petitioners was offered three other alternatives-Rajkot, Baroda and Surat where the Department had centralized wing. We do not find that the reasons either lacked clarity or sufficiency. When it is pointed out that several places of the company were subjected to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d out that the decision of the Division Bench of this Court in case of Arti Ship Breaking (supra) was in case of Millenium Houseware v. CIT referred to Larger Bench by another Bench under an order dt. 12th March, 2012. It was pointed out that such decision is pending. It was therefore, urged that present petitions could also be admitted since earlier petitions are admitted and pending consideration by Larger Bench. We have not accepted such a formula for the following reasons : (1) Firstly, the issue referred to the Larger Bench in the said order dt. 12th March, 2012 is wholly different. In case of Millenium Houseware v. CIT, this Court had taken a view that by virtue of subsequent judgments of Supreme Court in case of Managing Director, ECIL, Hyderabad Etc. v. B. Karunakar, Etc. AIR 1994 Supreme 1074 and State Bank of Patiala v. S.K. Sharma AIR 1996 SC 1669 despite the decision in case of Ajanta Industries (supra), in facts of the case of non-communication of the reasons for transferring the case would not vitiate the proceedings. It was this issue which a subsequent Division Bench found unable to persuade itself. It is this reason why the reference has been made to Larger Benc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....order, hence, the question of interference by this Court in the peculiar facts and circumstances of the case does not arise. 22. The High Court of Calcutta in the case of Bal Chand Purohit v. CIT [2006] 286 ITR 423 has again dealt with the issue of transfer of case and the Calcutta High Court has upheld the order of transfer of case as reasons for transfer was disclosed in the show-cause notice and the order was passed by the authorities after giving an opportunity of being heard to the assessee. In the aforesaid case, the transfer was made for the same purpose of "coordinated investigation and for centralisation of cases" and the Calcutta High Court has held the aforesaid reason to be a good reason. In the present case also the reason assigned is "coordinated investigation and the assessment" and centralisation has been ordered and, therefore, this Court is of the considered opinion that in the light of the judgment delivered by the Division Bench of the Calcutta High Court, no interference is warranted. 23. The respondents have brought to the notice of this Court another judgment delivered in the case of Trimurti Fragrances (P.) Ltd. v. CIT [2006] 283 ITR 54....