TaxTMI 
TaxTMI 
2021 (4) TMI 1026
X X X X Extracts X X X X
X X X X Extracts X X X X
....ugned order at Annexure "A" to this petition. (b) quash and set­aside all the proceedings initiated consequent to passing of the impugned order under section 127 of the Act; (c) pending admission, hearing and final disposal of this petition, to stay implementation and operation of the order at Annexure "A" to this petition and to also stay all further proceedings in relation to and arising from the transfer of the case records consequent to passing of the impugned order under section 127 of the Act; (d) any other and further relief deemed just and proper be granted in the interest of justice; (e) to provide for the cost of this petition." 4. The facts giving rise to this writ application may be summarised as under: 4.1 The writ applicant is a partnership firm. A survey action under Section 133A of the Income Tax Act, 1961 (for short, "the Act, 1961") was carried out by the ADIT (Investigation), Gandhidham on 26th September 2017 at the business premises of one Dahyabhai Bhurabhai Rabari and others including the writ applicant herein. 4.2 Eleven months thereafter, the respondent issued a show cause notice dated 23rd August 2018, whereby it was proposed to centralize th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut proper application of mind and not in consonance with the requirements of sub­section (2) of section 127 of the Act; ➢ The proposed action of transferring the cases from Gandhidham to Rajkot would result into huge inconvenience and hardships to the Petitioner who is based in "Gandhidham" and his case was proposed to be transferred to "Rajkot";" 4.4 The respondent, vide order dated 2nd April 2019 passed under Section 120(4)(b) r/w Section 2(7A) r/w Section 127(1) of the Act, transferred the case of the writ applicant from the "ITO, Ward - 1, Gandhidham" to the "Joint Commissioner of Income Tax, Gandhidham Range, Gandhidham" along with the five other assessees with a view to carry out coordinated investigation. 4.5 Later, the respondent issued another notice dated 17th September 2019, calling upon the writ applicant to show cause as to why the case should not be transferred to the "DCIT, Central Circle - 2, Rajkot". Such notice referred to above was issued stating that ordinarily, the JCIT / Addl. CIT would not undertake the assessment functions as they are in charge of the assessment units. However, to facilitate effective investigation and coordinated action, it w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion is necessary is carried out;" 4.7 The aforesaid objections came to be overruled by the respondent and the impugned order dated 21st October 2019 came to be passed under Section 127(2) of the Act. The respondent transferred the case of the writ applicant from "the ITO, Ward - 1, Gandhidham" to "the DCIT, Central Circle - 2, Rajkot", along with the five other assessees. 5. Being dissatisfied with the impugned order of transfer passed under Section 127(2) of the Act, the writ applicant is here before this Court with the present writ application. ● SUBMISSIONS ON BEHALF OF THE WRIT APPLICANT: 6. Mr. Tushar Hemani, the learned Senior Counsel assisted by Ms. Vaibhavi Parikh, the learned counsel appearing for the writ applicant vehemently submitted that the impugned order transferring the case of the writ applicant from Gandhidham to Rajkot is patently bad, illegal, contrary to law and in gross violation of the fundamental rights guaranteed to the writ applicant under Articles 14 and 19(1)(g) of the Constitution of India. 7. Mr. Hemani would submit that the respondent had already passed the order dated 2nd April 2019 under Section 120(4)(b) r/w Section 2(7A) r/w Section 127....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er the survey action under Section 133A of the Act does not warrant centralization. Mr. Hemani submitted that as a matter of practice, the centralization of connected cases of those assessees, at whose premises "search" action under Section 132 of the Act has been carried out, is essential for effective and coordinated investigation and consequently, the assessment is framed under Section 153A / 153C of the Act, as the case may be. He would submit that however, in a case where survey action under Section 133A of the Act is carried out, the normal assessment proceedings would follow and consequently, the assessment shall be framed under Section 143(3) or 143(3) read with Section 147 of the Act, as the case may be. He also submitted that such cases, wherein "survey action" under Section 133A of the Act has been carried out, are not to be centralized. 10. Mr. Hemani would submit that indisputably, a "survey action" under Section 133A of the Act has been carried out and hence, the question of "centralization" of the case of the writ applicant along with the other assessees with the "central circle" (i.e. the wing dedicated for search assessments) is absolutely unwarranted. 11. Mr. He....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s the contention of the respondent that the "JCIT, Gandhidham", vide letter dated 26th August 2019 informed that he is not authorized by the system to undertake the assessment functions, thereby suggesting that the cases may be centralized to the central circle, it is submitted that such a letter cannot be taken as a base for justifying the transfer of the case of the writ applicant. It is submitted that in view of the above referred circular, the letter from the JCIT, Gandhidham loses its significance. He submitted that even on that score, the impugned order deserves to be quashed. 14. In such circumstances referred to above, Mr. Hemani prays that there being merit in his writ application, the same be allowed and the impugned order of transfer be quashed and set aside. ● SUBMISSIONS ON BEHALF OF THE REVENUE: 15. Mr. M. R. Bhatt, the learned Senior Counsel assisted by Ms. Mauna Bhatt, the learned Senior Standing Counsel appearing for the Revenue, on the other hand, has vehemently opposed this writ application submitting that no error, not to speak of any error of law could be said to have been committed by the respondent in passing the impugned order of transfer. 16. Mr. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y of assessment by the Joint CIT / Additional CIT and he cannot acquire any PAN. Further, notice cannot be issued to the writ applicant in the ITBA by the Joint CIT / Additional CIT. Reference has also been made to the letter addressed by the Joint CIT, Gandhidham stating that he is not authorized by the system to undertake the assessment function and accordingly, suggested that the cases may be centralized to the central circle. In the impugned order, all contentions raised by the writ applicants have been dealt with. 19. Mr. Bhatt would submit that the order passed under Section 127 of the Act is an administrative order. The only requirement is to adhere to the principles of natural justice. He would submit that the objections raised by the writ applicant have been duly dealt with by passing a wellreasoned and speaking order. Mr. Bhatt would submit that there is no vested right with the writ applicant to choose the Assessing Officer. He would submit that the impugned order would indicate that the transfer of cases have been made for the purpose of facilitating the effective and coordinated investigation. 20. Mr. Bhatt invited the attention of this Court to the Civil Application....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sing 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 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er and such officers are situated in the same city, locality or place. Under clause (a) of sub­section (2) of Section 127, where the Assessing Officer or the officers from whom the case is 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. 26. Section 127 of the Act is founded on three principles. First, is the requirement of transferring the assessment in appropriate cases which would have the element of public interest. Secondly, the assessee cannot choose his Assessing Officer. Section 124 of the Act wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment or disagreement, as the case may be. It is the authority from whose jurisdiction the case is being transferred, in addition to agreeing to transfer would have to grant an opportunity of hearing to the assessee 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. [See Genus Electrotech Ltd. vs. Union of India and Others, (2018) 402 ITR 221 (Guj.)] 27. We have already noted the reasons for the transfer of assessment. We may refer to a decision rendered by a Coordinate Bench of this Court in the case of Shree Ram Vessel Scrap P. Ltd. vs. Commissioner of Income­tax, reported in (2013) 355 ITR 255 (Guj), wherein this Court had upheld the stance of the Revenue that for effective and coordinative investigation, if otherwise established on the record, the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce to an assessee. Therefore, even though an assessee may not have a vested right to insist that his assessment be completed only at one place or by a particular Assessing Officer, nevertheless, the reasons for transfer must be weighty enough to offset against such personal inconvenience of an assessee. In exercise of power under Section 127 thus we are concerned with larger public interest 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....referred, which were considered and disposed off by the impugned notice in this case. The argument, thus, that no chance to effectively represent the case was provided has no merit." 30. In Pannalal Binraj vs. Union of India, reported in (1957) 31 ITR 565, the Supreme Court observed while upholding the power of transfer that, inconvenience to the assessee or likelihood of misuse of the provision could not be a ground to declare the said provision to be void, but if there was abuse of the power, appropriate remedy could be taken. The relevant observations reads thus : "It follows, therefore, that Section 5(7A) of the Act is not violative of Article 14 of the Constitution and also does not impose any unreasonable restriction on the fundamental right to carry on trade or business enshrined in Article 19(1) (g) of the Constitution. If there is any abuse of power it can be remedied by appropriate action either under Article 226 or under Article 32 of the Constitution and what can be struck down is not the provision contained in Section 5(7A) of the Act but the order passed thereunder which may be mala fide or violative of these fundamental rights. This challenge of the vires of Secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rial found demonstrate that the cases have to be centralized with one AO for effective and coordinated investigation to bringing the correct undisclosed/concealed income to tax. 6.5 The various hardships quoted by the assessee company for the proposed centralization of the case do not hold any water, for the following reasons:­ Since one year, all IT assessments are conducted through e­mail (known as e­assessments). The returns are filed online for the last so many years. The notices, the questionnaires. The information etc., are all sought through e­mail for which the assessee has to respond only through e­mail and the assessee/the other representative shall not appear before the AO in person. Even the relevant portions of books of accounts/bills/vouchers are to be uploaded on line, if the AO asked for the same. Therefore, the contention of carrying huge records, being located at a different place from that of the AO, location inconvenience etc. raised by the assessee do not hold any water. 6.6 The contention that the order u/s.127 cannot be reviewed/recalled without there being no new facts or circumstances is erroneous and misplaced. Having regard to th....