TaxTMI 
TaxTMI 
2019 (10) TMI 158
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.... 3. Both these writ petitions are filed by one and the same assessee. While the first writ petition is filed challenging the transfer of the assessee's case from Chennai to Bangalore, the second writ petition is filed against the consequential notice issued by the Assessing Officer at Bangalore. Therefore, the facts and circumstances warranting the filing of these two writ petitions are one and the same and they are as follows: The petitioner is a Private Limited Company incorporated under the Companies Act, 1956. It is engaged in the business of providing point of sale technology infrastructure to banks and consumer service providers. The petitioner Company was acquired by the Worldline Group, France through its Singapore subsidiary i.e. Worldline IT and Payment Services (Singapore) Pte. Ltd. (Worldline Singapore) in October 2017. Prior to the acquisition, one Kishore Kothapalli and Satish P.Chandra were Directors of the petitioner Company. They resigned from the Directorship of the petitioner with effect from 25.10.2017. On 01.02.2018, a survey under Section 133A of the Income Tax Act, 1961 was conducted at the office premises of the petitioner at Chennai. During ....
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....ion 142(1) read with Section 129 of the said Act. Hence, these present writ petitions are filed. 4. A counter affidavit is filed on behalf of the respondents. The case of the respondents is as follows: The petitioner Company became 100% owned Company by Worldline Group only after purchasing the shares from one Satish Chandra, Kishore Kothapalli and M/s.Global Tech Park Pvt. Ltd. The purpose of centralization of cases is to investigate the transactions among the various related entities during the last six previous years to the previous year in which the search and survey operations are conducted and to assess the income of all the persons concerned for the assessment years in question. Since the transfer of shares had happened in October 2017, which is well within six years prior to previous year, in which survey was conducted, the transactions needs to be investigated in order to have a clear picture before the final assessment of income is made. Therefore, it cannot be said that there was no nexus/linkage. Though the nexus/linkage, which may seem to be absent on the date of survey, the purpose of centralization is not limited to investigate the transactions, if there exists....
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....ay exist in respect of the six years prior to the year in which search or survey conducted. Therefore, the entire action is contrary to the provisions of Section 127 of the Act. The first respondent erroneously exercised powers under Section 127 of the Act without recording reasons to justify the necessity of coordinated investigation. In the absence of any agreement for the purpose of transfer under Section 127(2) of the Act between the authorities of equal rank, any transfer made under this Section is bad in law and illegal. In the present case, there is no agreement by the first respondent for transfer as requested by the Principal Commissioner of Income Tax (Central), Bangalore. The very admission of the respondent that the nature of transaction, which requires verification and investigation, is unknown means that the entire exercise is without any basis and without material on record. Therefore, transfer under Section 127 cannot be made merely for facilitating coordinated investigation. 6. Mr.Sandeep Bagmar, learned counsel appearing for the petitioner submitted as follows: The impugned order is contrary to the scope and ambit of 127 (2)(a) of the Income Tax Act. There m....
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....ing the ground with regard to the agreement between the two Commissioners, while making his oral submissions. When this ground was not raised in the first writ petition, the same cannot be raised in the second round. Even otherwise, agreement between the two Commissioners can be inferred from their conduct. Therefore, it is not necessary to specifically state in the order of transfer that an agreement was reached between the two Commissioners. On this aspect, (2017) 86 Taxmann.com 39 (Guj), Genus Electrotech Ltd. vs. Union of India, is relied on. b) On the very same day, survey was conducted at the petitioner's premises and GTPL, Bangalore. GTPL held 24.56 shares in the petitioner's Company. This 24.56% shares is sold to the petitioner's owner in the month of October 2017. The search was conducted in February 2018. Records were seized. Therefore, financial implication between the parties out of such transfer of shares can definitely be inferred. Merely transferring the file from one Office to the other Office does not cause prejudice to the assessee. Mere inconvenience cannot be a ground to refuse or reject the transfer. Since there was search and survey at GTP....
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....he other hand, this issue was very much available to the petitioner even at that time and however, they have not chosen to raise the same. It is well settled that when a challenge is made against an order, all the grounds available and legally sustainable should be raised at the first instance. Piece meal raising of grounds one after another in successive writ petitions, in respect of the very same challenge is not permissible, since such kind of practice, if allowed, would only result in entertaining successive writ petitions on the same issue by the same party. 10. Keeping the above position in mind, let me consider the case further. Consequent upon the said order made in W.P.No.19415 of 2018 dated 11.12.2018, a fresh order dated 13.02.2019 in Notification No.10/2018-2019 was issued by the first respondent, which is impugned in this writ petition. Perusal of the said detailed order would show that the first respondent has considered the objections raised by the petitioner, dealt with the same and thereafter, chosen to pass the order of transfer of the petitioner's case once again from ITO, Corporate Ward 4(1), Chennai to DCIT, Central Circle 1(1), Bangalore under Section 1....
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.... and investigated during assessment proceedings only. In any case this cannot be taken as basis to object centralization, because the centralization is done in the public interest to safeguard the revenue. And while invoking the provisions of section 127 i.e. at this stage of order of centralization, consideration of documents and giving 'detail' reasons are not needed as has been held by various courts. 3) So far as inconvenience in attending proceedings at Bangalore is concerned, the objection is not acceptable because the assessee company is supported/assisted by learned counsels. And in any case this cannot be taken as objection by the assessee because the centralization being an administrative process is being done in the public interest to safeguard revenue. On all the above issues the relevant observations of Gujarat High Court in case of Shree Ram Vessel Scrap Pvt. Ltd. Vs. Commissioner of Income Tax-VI (Special Civil Application No.16883, 16886, 16888 & 16896 of 2012) dated 23/01/2013 are worth mentioning which are reproduced as under: "The contention of the petitioner that the Department should have furnished information with th....
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....der of transfer passed by the Central Board on the ground of violation of principles of natural justice, since before passing such order, no reasons were given nor communicated to the assessee therein. The facts of the present case are totally different as discussed supra. Therefore, the above decision of the Apex Court is not applicable to the present case. 14. The next decision relied on is reported in 2004 (186) ITR 428 (Rajesh Mahajan vs. CIT) of the Punjab and Haryana High Court. Perusal of the facts and circumstances of the said case would also show that the impugned order of transfer therein only stated that the transfer of assessment proceedings of the assessee therein was made for a coordinated investigation. In this case, I have already pointed out that paragraph 9.2 of the order of transfer has clearly spelt out certain reasons. Therefore, it is to be noted that in the present case, the transfer is made not by simply stating for a coordinated investigation, but by furnishing the reasons as well in support of such investigation. Hence, the above decision is also factually distinguishable. 15. 2015(234) Taxman 468 (RSG Foods (P) Ltd. vs. Commissioner of Income Tax), ....
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....for transferring the file from Chennai to Bangalore. Therefore, he contended that in the absence of such agreement, the transfer is bad. 19. Before answering the above issue, it is relevant to note at this juncture that this point was not at all raised specifically by the writ petitioner in the present writ petition. It is also to be noted that even in the earlier writ petition filed in W.P.No.19415 of 2018, this issue was not raised. However the learned counsel for the petitioner sought to raise this issue first time before this Court orally by contending that it is a question of law based on mandatory statutory requirement under Section 127(2)(a) and therefore, this Court can go into such issue and decide. 20. On the other hand, it is the contention of the learned Senior Standing Counsel for the respondents that when the above issue has not been specifically raised either in the earlier writ petition or in the present writ petition, the learned counsel for the petitioner is not entitled to raise the same, since there was no opportunity for the Revenue to deny such contention in their counter pleadings. I have already observed supra that the grounds cannot be raised in pi....
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....oresaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such [Principal Director General or] Director General or [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation : In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or directi....
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....ing Officer to another Assessing Officer, if both are subordinate to him, is dealt with under Sub Section (1) of Section 127. In the case, where both the Assessing Officers are not subordinated to the same Commissioner, procedure to transfer is dealt with under sub Section (2) of Section 127, which contains two eventualities. While sub clause (a) of 127(2) deals with transfer of cases, when there is an agreement between the two Commissioners, sub clause (b) of Section 127(2) deals with transfer of cases by the Board or any such Officer as the Board may, by notification, authorise in this behalf, where the two Commissioners are not in agreement to transfer the case. While carefully perusing the provision under Section 127(2)(a), it is evident that the word "agreement" referred to therein is to be construed as an agreement by conduct and not necessarily an agreement in writing. The above emphasis is made based on the word "then" referred to under Section 127(2)(a) after the word "agreement". Therefore, it is apparent that only when there is an agreement between the two Commissioners, then the transferring Commissioner has to issue show cause notice and pass orders thereon. If no a....
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....rity issued fresh notices dated 3.11.2016 and 23.11.2016 calling upon the petitioner to participate in the hearing and indicating the grounds on which he proposed to transfer the assessment. After considering the opposition of the petitioner, the said authority passed the order which is impugned in the present petition. The agreement of the Principal Commissioner, Ahmedabad, to transfer the case, therefore, can be culled out from the record. Clause(a) of sub-section(2) of section 127 of the Act refers to the agreement of the 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 wa....
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.... Court was considered and discussed by the Gujarat High Court in the case cited supra and distinguished the same. I am in full agreement with the above decision of the Gujarat High Court, more particularly, when the facts and circumstances of the present case are totally different and distinguishable from the facts and circumstances of Noorul Islam Educational Trust's case. 29. The other decision relied on by the petitioner's counsel is reported in (2011) 332 ITR 97 (Madras), Noorul Islam Educational Trust vs. CIT and others. It is true that the learned Judge found that no material has been placed before him that there was agreement between two Commissioners and therefore, in the absence of such agreement, the transfer cannot be made. In this case, I have already pointed out that the very issuance of the show cause notice itself is reflection of the agreement arrived by the respective Commissioners and therefore, the show cause notice is the relevant material to arrive at a conclusion that there was an agreement between the Commissioners. In other words, the agreement referred to under Section 127(2)(a) is to be inferred based on the conduct of the concerned officials, s....