TaxTMI 
TaxTMI 
2006 (2) TMI 161
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.... Commissioner to pass a fresh order in accordance with law. The relevant portion of the order is quoted below (page 336, 337): "On a perusal of the aforementioned order we find that no reasons whatever has been mentioned in the order transferring the cases. This court in the case of Vinay Kumar Jaiswal v. CIT [1996] 221 ITR 568 while dealing with the matter relating to the transfer of the case under section 127 of the Act has held as follows: 'It is obvious that when certain factual allegations are made in the objections of the assessee, they have to be dealt with, otherwise the very purpose of hearing would be frustrated. In their objections, the petitioner had specifically mentioned that all the concerns of the family barring a few which were recently established are being assessed at Kanpur and they were paying a good amount of tax in Kanpur. They had also mentioned that the accounts of all the concerns of the family are maintained at Kanpur and only manufacturing and trading activities are conducted at Bhilai. Hence it was incumbent upon the Commissioner of Income-tax to deal with the said averments which he has not done in the impugned order and for this reason also th....
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....r of grounds including the grounds that the statement contained in the notice regarding most of the cases of the group being assessed at Mumbai was factually incorrect and the main cases of Pradeep Kumar Bansal (petitioner No. 3) and M/s. Bansal Sharevest Services Ltd. (petitioner No. 1) were being assessed at Kanpur since more than last ten years and that the tax consultant of the chartered accountant of the assessees were at Kanpur. It was further objected that if at all the group cases were to be assessed at one place for co-ordinated investigation, then they should be centralized at Kanpur. These objections have not been considered in the impugned order and a vague statement has been made that since other cases of this group had been centralized at Mumbai, it is necessary to centralize the said three cases at Mumbai so that co-ordinated and meaningful investigation could be done. Even the details of the cases, which had been earlier centralized, have not given in the impugned order. The observations made by this court in the judgment and order dated April 7, 2005, in Writ Petition No. 1120 of 2004 (Bansal Sharevests Services Ltd. v. CIT [2006 283 ITR 332 (All)) have, therefore,....
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.... accommodation entries and not bona fide gifts as claimed by the assessees. There are huge transactions in the names of various parties who have no business in Mumbai. At Mumbai, the SEBI team perused the sauda sheets at the Masjid Bunder Office of Mr. Rajeev Bansal, another case of this group, and found certain transactions which are not matching with NSE trade details. This indicates that transactions have been carried out outside the systems of exchange and also outside the regular books of account. The statements of accounts obtained from the banks during the course of investigation reveal deposits of huge cash in bank accounts of various assessees of this group. Looking to these facts I find that these are fit cases to be centralised at Mumbai. 6. In view of the above and in exercise of the powers conferred by sub-section (2) of section 127 of the Income-tax Act (43 of 1961), section 11 of the Wealth-tax Act, 1957, and all other powers enabling me in this behalf, I, the Commissioner of Income-tax-II, Kanpur hereby transfer the case particulars of which are mentioned hereunder in column 3, from the Assessing Officer mentioned in column 5 therein to the Assessing Officer mentio....
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....nce-cum-business premises at 1502/1503 and 1506, Safalya Tara Baug, Love Lane, Byculla, Mumbai but has business places also at Kolkata, Bhuj, Raj Kot, Bangalore, Mathura, New Delhi and Haridwar. It has also been observed that in the search conducted on July 26, 2003, material was found indicating large scale transactions in shares out side the stock exchanges and seized papers also indicated that the assessees had been indulging in accommodation entries for financing share applications/gifts. In fact, cash had been deposited in a number of bank branches and cheques were issued immediately afterwards of share applications/gifts and prima facie it was found that these were accommodation entries and not bona fide gifts. At Mumbai, the SEBI perused the sauda sheets at the office of Mr. Rajeev Bansal and found certain transactions which were not matching with the NSE trade details. The statement of accounts obtained from banks during the course of investigation also revealed deposits of huge cash in bank accounts of various assessees of this group. He, therefore, concluded that it was a fit case where the cases should be centralised at Mumbai. 13. Learned counsel for the petitioners, h....
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.... India [1981] 1 SCR 962; AIR 1981 SC 431, has observed thus : 'It is an unwritten rule of the law, constitutional and administrative, that whenever a decision-making function is entrusted to the subjective satisfaction of a statutory functionary, there is an implicit obligation to apply his mind to pertinent and proximate matters only, eschewing the irrelevant and the remote'. Suffice it to say that the following passage appearing at pages 285-86 in Prof. de Smith's treatise 'Judicial Review of Administrative Action' (4th Edn.) succinctly summarises the several principles formulated by the courts in that behalf thus: 'The authority in which a discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, a discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it ; it must not act under the dictation of another body or disable itself from exercising a discretion in each individual case. In the purported exercise of its discretion it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do.....
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.... that it lay within the powers of the authority . . . In another sense, it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another." 19. The grounds for judicial review of administrative action were further summarized in 1985 by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service [1984] 3 All ER 935; [1985] 1 AC 374, 410 (HL), (commonly known as CCSU case) as illegality procedural impropriety and irrationality. He said more grounds could in future become available, including the doctrine of proportionality which was a principle followed by certain other members of the European Economic Community. Lord Diplock observed in this case as follows "Judicial review has I think, developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds upon which administrative action is subject to control by judicial review. The first ground I would call 'illegality', the second 'irrationality' and the third 'procedural impropri....
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....me court observed as under (page 1456 of AIR 2004): "The jurisdiction of this court in such matter is very limited. The court will not normally exercise its power of judicial review in such matters unless it is found that formation of belief by the statutory authority suffers from mala fide, dishonesty or corrupt practice. The order can be set aside if it is held to be beyond the limits for which the power has been conferred upon the authorities by the Legislature or is based on the grounds extraneous to the legislation and if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction required thereunder." 24. In State of N. C. T. of Delhi v. Sanjeev alias Bittoo, AIR 2005 SC 2080, the Supreme Court in paragraphs 16 and 18 held as follows: "16. . . . 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'.......... 18. The court will be slow to interfere in such matters relating to administrative functions unless decision is taint....