TaxTMI 
TaxTMI 
2021 (3) TMI 1069
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....d to restrain from enforcing compliance of the impugned notices dated 16.07.2020 and 29.07.2020 annexed hereto at Annexure-A and Annexure-C respectively along with consequential order under Section 127(2)(a) of the Income Tax Act, 1961, dated 17.08.2020 at Annexure-F; (C) Award the costs of this petition. (D) Grant such other and further reliefs as this Hon'ble Court deems fit." 2. The subject matter of challenge in the present litigation is to the order dated 17th August 2020 of transfer of the proceedings under Section 127(2)(a) of the Income Tax Act, 1961 (for short, 'the Act 1961') from the ACIT (E), Circle-2, Ahmedabad, to the DCIT, Central Circle-1, Vadodara. 3. The show-cause notice dated 16th July 2020, calling upon the writ-applicant to show-cause as to why the proceedings should not be transferred under Section 127(2) of the Act reads thus : "To, M/s.Sumandeep Vidyapeeth Piparia, Waghodia, Vadodara 391760. Sir, Sub: Show Cause notice along with Opportunity letter in respect of proceedings U/s 127(2) of the I.T. Act, 1961 and Centralization of case in connection with Search conducted in M/s Su....
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....n writing words "....completing assessment proceedings u/s 153A/153C of the I.T. Act 1961 in connection with the search operation conducted in the case of M/s Sumandeep Group of Baroda." It is accordingly requested to kindly ignore the contents of this para. 3. Your case is proposed to be centralized with other group cases for co-ordinated investigation and as per provisions of section 127(2)(a) of the I.T. Act, opportunity of being heard in this matter and is hereby provided to you. It is requested to either submit your reply through email or speed post or attend before the undersigned in person or through an Authorised Representative on 06/08/2020 at 03:30 P.M. in this office to present your case. In case of noncompliance, it will be presumed that you have no objection to transfer your PAN to the DCIT, Central Circle-1, Vadodara and to pass Order U/s 127(2) of the I.T. Act in your case and the matter will be decided on merits and on the basis of documents available on record. (RITESH PARMAR) Commissioner of Income Tax (Exemptions), Ahmedabad" 5. The writ-applicant lodged his objections to the above referred show-cause notice vide communication dated 6th Augus....
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....oner of Income Tax (Exemptions), Ahmedabad" 8. In view of the aforesaid, the writ-applicant is here before this Court with the present writ-application. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT : 9. Mr.Darshan Patel, the learned counsel appearing for the writ-applicant, has vehemently submitted that the impugned order is erroneous in law as the same is based on non-existent facts and incorrect reasons. He would submit that the grounds assigned by the department for transfer of the case are vague. It is submitted that although the reason of coordinated investigation has been assigned by the department to justify transfer, yet the same does not specifically find place or there is no specific reference of the same in the show-cause notice. 10. Mr.Patel, in support of his aforesaid submission, has placed reliance on the following decisions : 1. Ajantha Industries vs. Central Board of Direct Taxes, (1976) 102 ITR 281 (SC); 2. Ramswaroop vs. Commissioner of Income-tax-II, Nagpur, (2016) 70 taxmann.com 5 (Bombay); 3. Anuben Lalabhai Bharwad vs. Principal Commissioner of Income-tax-3, (2016) 72 taxmann.com 178 (Gujarat); 4. Principal Co....
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....le of undertaking such assessment. It is also incorrect to say that the officers of the central charge where the case was being proposed for transfer are not well versed with the provisions relating to the charitable trusts. It is also recorded that in view of the Faceless Assessment Scheme, 2019, the scrutiny assessments are now to be done either by the Regional E-Assessment Centre or by the central charge and now no assessment could be made by the ACIT (Exemption). 13. In such circumstances referred to above, Mr.Bhatt prays that there being no merit in this writ-application, the same may be rejected. ANALYSIS : 14. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether the authority concerned committed an error in passing the order of transfer under Section 127 of the Act. 15. Section 124 of the Act pertains to the jurisdiction of the Assessing Officer. Sub-section (1) of Section 124 reads as under : "124(1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been ve....
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....ay, 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 subsection (2) may be made at any stage of the proceedings, and shall not render necessary the reissue 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 direction issued thereunder, means all proceedings under this Act in respect of....
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....which assessments. Nevertheless, an assessee cannot choose his Assessing Officer. At the same time, it is also recognised that transferring the assessment of an assessee at a far away place would lead to hardship and cause prejudice. It is in this context that the section requires giving of a reasonable opportunity of being heard to the assessee and to record reasons for transferring the assessment. The Courts have also recognised that transferring an assessment of an assessee at a far away distance would certainly cause inconvenience and prejudice. It is in this respect that under sub-section (3) of Section 127, the requirement of hearing and recording of reasons for transferring an assessment is not made applicable when the assessment is being transferred from one Assessing Officer to another Assessing Officer, both being situated in the same city, locality or place. The third important element of Section 127 is when an assessment is being transferred from one Assessing Officer to another Assessing Officer, both of whom are not subordinate to the same head, the same could be done only with the agreement of the respective heads and if there is no such agreement, only by the Board ....
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....issioner 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 sub-section (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. Sub-section (3) of Section 127 provides that nothing contained in sub-section (1) or subsection (2) shall be deemed to require giving of any such opportunity where the transfer is from any Assessing Officer to another and offices of all such officers are situated in the same city, locality or place. Sub-section (4) of Section 127 provides that 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-issuance of any notice already issued by the Assessing Officer from whom ....
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....missions. 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 the above reason that Section 127 of the Act has not limited the exercise of jurisdiction by specifying any circumstances before the authority can exercise his powers to transfer the case. One more fact which cannot be lost sight of is that an assessee cannot choose his Assessing Officer and, therefore, if the transfer order does indicate some....
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....with various related entities during the relevant period. At this stage, we may refer to the reasons assigned by the Commissioner of Income Tax (Exemption) for centralization while disposing of the objections raised by the writ-applicant. "Vide your above referred letters, you have brought to attention the provisions of section 127(1) which contain a clear mandate to record valid and justifiable reasons for transfer of cases. In this regard, you have relied upon various judicial pronouncements including the judgment of Apex Court in the case of PCIT (Central) vs. Rohtas Project Limited (100 Taxman 384). The Judgments cited by you are not discussed in this letter as none of these judgments have been contravened. There are valid and justifiable reasons as per I.T. Act for transfer of your case which is mentioned in subsequent Para Nos. 4.1 to 4.7. Further, following the principles of natural justice, you were provided opportunity of being heard before finalization of proceedings U/s 127(2) (a) of the Act. 4.1 According to you, the reason of co-ordinated investigation in your case is vague. It is claimed that you were not carrying out any business activities and the ....
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....arious individual cases from F.Y. 2012-13 to 2016-17) was suggested to be treated as unexplained cash credits u/s. 68 of the I.T. Act, 1961. 4.4 It is pertinent to note that the assessee had challenged the action of ACB, Gujarat before the appellate authorities and the issue was finally settled against the assessee by the Hon'ble Supreme Court. While deciding the criminal case registered by ACB, Gujarat, vide Prevention of Corruption Act against the Trustees of Sumandeep Vidhyapeeth, Hon'ble Supreme Court vide Criminal Appeal No.989 of 2018, 27/04/2020 has allowed the appeal of the Gujarat State. Relevant paras of said judgment are extracted as under : "51. In the present case, on a prima-facie evaluation of the statements of the Gaurav D. Mehta (the Vice- Chancellor); Mr.Pragneshkumar Rameshbhai Trivedi (account officer of Sumandeep Vidhyapith University) and other witnesses it appears that the present respondent was the final authority with regard to the grant of admission, collection of fees and donation amount. 52. The charge sheet specifically discloses that the respondent allegedly was collecting certain extra amount over the prescribed fees....
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....e words 'co-ordinated investigation' of the case are therefore, not vague and centralization of the cases with one assessing officer is essential for better co-ordinated investigation. 4.6. Further, it is not out of place to mention here that the purpose of centralization of cases is to investigate the transactions among the various related entities during the relevant period and to assess income of all the persons concerned for the assessment years in question. The purpose of a Section 127 transfer is not to subject the concerned assessees to any tax liability, or even undergo any other obligation (onerous or otherwise), but rather, only to direct that the regular assessment (as is carried out in the usual course of events) will be conducted by an AO other than the jurisdictional AO in order to ensure coordinated investigation only. Indeed, the very purpose of the Section 127 order in this case is to ensure that an orderly and coordinated investigation takes place while conducting the assessment of the various (and possibly related) entities involved. Provisions of Section 127 are only for necessitating the transfer of the assessee trust for jurisdictional purpose....