TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 760
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....g under Section 127 of the Act, transferred the case of the petitioner from the jurisdiction of The Income Tax Officer, Ward 4(1), Hyderabad (respondent No. 2 herein) to the jurisdiction of The Deputy Commissioner of Income Tax, Central Circle 4(4), Mumbai (respondent No. 4 herein). Upon the matter being transferred, as a consequence, respondent No. 4 issued the notice dated 30.11.2023 under Sub-section (1) of Section 142 of the Act to the petitioner, which led to filing of the instant Writ Petition. 4. The brief facts in nutshell are that the petitioner-assessee is a private limited company engaged in the business of Information Technology and Information Technology Enabled Services. That search and seizure proceedings under the provisions of the Act were drawn against a company named M/s. Sumaya Group, based at Mumbai. In the course of search and seizure, certain incriminating materials were found relating to the transactions carried out by M/s. Sumaya Group with another firm viz., M/s. IRIS Global Services Private Limited and M/s. IRIS Computers Limited, both based at New Delhi. 5. Similar search and seizure proceedings were drawn against said M/s. IRIS Group at New Delhi. In ....
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....fer the case from the jurisdiction of respondent No. 2 to the jurisdiction of respondent No. 4, particularly for the reason that no search and seizure proceedings were conducted at the premises of the petitioner's establishment. That at the same time, the impugned order seems to have been passed with an impression that search and seizure proceedings were conducted at the premises of the petitioner's establishment. Therefore, the impugned order and the consequential notice both need to be interfered with. 9. Learned Senior Counsel further contended that the only reason for the transfer of the petitioner's case from the jurisdiction of respondent No. 2 to the jurisdiction of respondent No. 4 was the so called commercial transactions that the petitioner had with M/s. IRIS Group. However, there is no allegation or a complaint to the effect that the so called commercial transactions between the petitioner and M/s. IRIS Group are in any manner illegal or contrary to the provisions of the Act. In the absence of the same, the order of transfer so far as the petitioner's case is concerned was uncalled for and ought to have been rejected. 10. On the contrary, learned counsel for the Depart....
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....ase has been transferred from any Income-tax Officer or Income-tax Officers to two or more Income-tax Officers, the Income-tax Officers to whom the case is so transferred shall have concurrent jurisdiction over the case and shall perform such functions in relation to the said case as the Board or the Commissioner (or any Inspecting Assistant Commissioner authorised by the Commissioner in this behalf) may, by general or special order in writing, specify, for the distribution and allocation of the work to be performed. (2) The transfer of a case under sub-section (1) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Income-tax Officer or Income-tax Officers from whom the case is transferred. Explanation.-In this section and in sections 121, 123, 124 and 125 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 co....
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....der Sub-section (1) of Section 142 of the Act, there is a clear elaboration of cash transactions between the petitioner's establishment with M/s. IRIS Group. To make the things bad, there is a statement of Accountant namely Sri Chennu Venkata Raghavendra, who in the course of survey, has not been able to give proper and satisfactory explanation and also did not provide cogent material in respect of so called commercial transactions done between the petitioner's establishment with M/s. IRIS Group. There was also no sufficient supporting documentary evidence with the petitioner's establishment or with their officials at the time of survey to establish that the said transactions were genuine and they were done strictly in accordance with the provisions of law. 18. Learned Senior counsel for the petitioner relied upon Noorul Islam Educational Trust Vs. Commissioner of Income-Tax and Others [2016] 388 ITR 489 (SC), Vijayasanthi Investments Pvt. Ltd. Vs. Chief Commissioner of Income-Tax and Others [1991] 187 ITR 405 (AP), Hindusthan M-I Swaco Ltd. Vs. Principal Commissioner of Income-tax, Vadodara [2016] 72 taxmann.com 14 (Gujarat) and Virbhadra Singh Vs. Commissioner of Income-tax [201....
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.... his principal place of business and may be put at the disposal of an assessing authority who may be situated at another place far away from the assessee's place of business. The power of transfer of cases therefore, would have to be exercised in proper cases when sufficient material on record justify such action. This is, however, not to suggest that transfer of cases for effective investigation and coordination can be resorted to only in cases assesses who are subjected to search operations. This requirement may arise in other circumstances also. However, the sufficiency of reasons would have to be judged from case to case basis." 23. Similarly, in the case of Shree Ram Vessel Scrap P. Ltd. Vs. Commissioner of Income-Tax [2013] 355 ITR 255 (Guj), a Division Bench of the Gujarat High Court, while dealing with the provision of Section 127 of the Act, held as under: "20. Section 127 of the Act, as already noticed, pertains to power to transfer cases. Sub-section(1) empowers the Director General, Chief Commissioner 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 an....
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....ther. 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. 24. Coming to the facts of the present case, if we look at the impugned order, dated 20.11.2023, it is reflected that the reasons have been spelt out in the said order. Though the impugned order may not have elaborately dealt with the reasons, nonetheless, the reasons specifically stand spelt out i.e., in the course of search and seizure proceedings against M/s. Sumaya Group, certain documents perta....
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....ner of Income Tax, Kolkata and Others W.P.A.No. 3868 of 2022, dated 06.01.2023, dealing with the similar issue, the High Court at Calcutta held as under. "22. The purpose of a transfer order under Section 127 is not to subject an assessee to tax liability. Its effect is only to subject an assessee to assessment under another jurisdictional officer. Therefore, such an order involves balancing of the inconvenience to the petitioner and revenue interests (public interest), which should tilt towards the latter if there is some nexus derivable from facts and not mere pleas based on conjecture. 23. The principles that emerge from a reading of the judgments above are as follows: A. There is no absolute right to be assessed in a particular territory. B. In a transfer order, the inconvenience of assessees is balanced against the right of the revenue to carry out effective tax collection (which is public interest). C. The assessee does not possess the right to choose his/her assessing authority. D. The scope of judicial review is limited to determining: i) whether the decision making process was proper, which is to ascertain: (a) if the principles of natural justice we....