TaxTMI 
TaxTMI 
2025 (10) TMI 433
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....hkula. Survey action was initiated against petitioner by the Income Tax Department under Section 133-A of the Income Tax Act, 1961 (hereinafter referred to "the Act of 1961"). It was subsequently converted into search and seizure operations under Section 132 of the Act of 1961 at the residence/office and business premises of the petitioner from 06.09.2016 to 08.09.2016. Writ Petition i.e. CWP-8261-2017 titled as Pawan Kumar Goel Vs. Union of India and others came to be filed by petitioner challenging such conversion of survey into search and seizure. 3. The Court noticed that petitioner had cooperated with the Income Tax Department during survey action and had voluntarily disclosed existence of cash to the tune of Rs. 2,09,89,090/- in his safe and keys were handed over to the officials of the Income Tax Department with an explanation that such amount of cash was received by way of advance in a business transaction. The Court further noticed that the summons issued to petitioner was vague and therefore, the decision to convert survey into search and seizure was violative of the procedure contemplated in law, inasmuch as no satisfaction was recorded either with regard to non-coope....
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....nchkula to DCIT/ACIT Central Circle-II, Chandigarh in view of the CBDT instructions. This notice was responded by petitioner vide his reply dated 26.12.2016 objecting to the proposal for transferring petitioner's jurisdiction from Panchkula to Chandigarh. Ultimately, an order dated 04.01.2017 came to be passed by the Principal Commissioner Income Tax, Panchkula transferring the jurisdiction of petitioner from DCIT Circle, Panchkula to DCIT/ACIT(Cen)-II, Chandigarh. Para 4 and 5 of order dated 04.01.2017 are relevant and are reproduced hereunder:- "4. I have given a careful consideration to all the submission to the assessee and examined all facts of the case. The case has also been discussed in details with the counsel for the assessee. After discussion Authorized Representative of the assessee has given no objection for centralization of the case with the Central Circle-II, Chandigarh." 5. Keeping in view the facts of the case, I, the Principal Commissioner of Income Tax, Panchkula, in the interest of administrative convenience as well as for the sake of co-ordinated investigation of the concerned group case, in exercise of the powers conferred by clause (a) of s....
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....e the petitioner's earlier Writ Petition was allowed, and all consequential actions were quashed by the Division Bench of this Court, it was not open for the Income Tax Department to have either transferred the jurisdiction of the assessee nor the Central Circle-II, Chandigarh, could have issued notices under Sections 142 and 148 of the Act of 1961. 13. Petitioner's claim is opposed by learned counsel for the Income Tax Department contending that the action of the competent authority in transferring the jurisdiction of assessing authority under Section 127 of the Act of 1961 is an independent exercise undertaken for administrative convenience and cannot be construed as an action consequential to the search and seizure. It is urged that petitioner himself had acquiesced to the transfer of jurisdiction and since the specific order whereby such transfer was made i.e. order dated 04.01.2017, is not under challenge, as such, no relief can be granted to petitioner. 14. In reply, learned senior counsel for petitioner submits that the consent of petitioner recorded in the order dated 04.01.2017, for transfer of jurisdiction, was obtained on account of duress and cannot be said to be ....
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....ion upon the transferred Assessing authority. The Bombay High Court in such circumstances observed as under: "20. Transfer of proceedings u/s.127 of the Act cannot be retrospective so as to confer jurisdiction on a person who does not have it. Section 127 of the Act does not empower the Authorities under the Act to confer jurisdiction on a person who does not have jurisdiction with retrospective effect. In fact, the explanation under Section 127 of the Act clearly provides that all the proceedings under the Act which are pending on the date of such order of transfer and all the proceedings which may be commenced after date of such order of transfer would stand transferred to the Assessing Officer to whom the case is transferred by Section 127(1) of the Act. This provision makes it clear that though transfer would come into effect from the date the order of Commissioner passed under Section 127(1) of the Act, the proceedings already commenced would not abate and continue with new Assessing Officer, who assumes charge consequent to transfer subject of course to the pending notices 21 itl127.06.odt being within jurisdiction of the Officer issuing the notices. It is not a prov....
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....pon the following judgments:- 1. Pooran Mal Vs. Director of Inspection (Investigation) of Income-Tax, New Delhi and Others 1974 (93) ITR 505 (Large Bench) Supreme Court. 2. Commissioner of Income Tax Vs. Kamal and Company 2009 (308) ITR 129 Rajasthan High Court. 3. Income Tax Officer Vs. U.K. Mahapatra & Co. and others Civil Appeal No. 5067 of 2009, decided on 29.07.2009. 20. On the aspect of re-opening of the assessment, learned counsel for the respondents places reliance on the following judgements:- 1. New Delhi Television Vs. DCIT 2020 (424) ITR 607, Supreme Court; 2. Raymond Woolen Mills Ltd. Vs. Income Tax Officer 1999 (236) ITR 34, Supreme Court.; 3. Hemjay Constructions Vs. Income Tax Officer 2019 (419) ITR 39, Gujarat; 4. BDR Builders and Developers Vs. ACIT 2024 NCDHC 3459, Delhi High Court, and 5. PCIT Central Vs. Maharaji Education Trust 2024 (468) ITR 634, Delhi High Court. 21. Learned counsel for the respondents lastly places reliance upon judgment of the Division Bench of this Court in Main Land Finance Pvt. Ltd. VS. PCIT Faridabad 2023 NCPHHC 122886, wherein the Co-ordinate Bench of this C....
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....on quashing of search and seizure operation, would invalidate the transfer of jurisdiction effected vide order dated 04.01.2017 ? 24. Section 127 of the Act of 1961, as it stood then, reads as under:- Power to transfer cases. 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner 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, transfer any case from one or more Assessing 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) wh....
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....show cause notice. We are, however, not impressed by such stand of petitioner, in objecting to his own no objection for centralization of its case. In the event such consent was imposed upon the representative of petitioner, it was always upon for petitioner to have challenged the order dated 04.01.2017 in appropriate proceedings. Once it has not been done so, it would not be open for the petitioner to indirectly assail the order on the ground of it being a consequence of search and seizure. 28. It would be worth noticing that even at stage of filing of the Writ Petition, there is no prayer made for quashing of the administrative decision of the competent authority taken on 04.01.2017, for centralization of petitioner's case with Central Circle-II, Chandigarh. This aspect is relevant and has to be kept in mind. 29. So far as the petitioner's contention about invalidity of order dated 04.01.2017, in light of the judgement of this Court in CWP-8261-2017 is concerned, we find that the consequence of search and seizure under the Income Tax Act, 1961 has to be direct and which is specifically provided for in the statutory scheme itself. Ordinarily, search and seizure operation wou....
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....ected during the course of illegal search can be made use of thus if the ratio decidendi of the judgments of the Hon'ble apex Court is applied then it becomes clear that even in the case of illegal survey, material collected can be used for additions. While delivering the judgment the Hon'ble apex Court was cautious about the fact that material collected is coming out from illegal search and yet material collected was allowed to be used by the AO. The same analogy applies here for the reason that so far as the procedure-undertaken by the AO is concerned, it remains same in regard to use of material either collected in search or in survey. The inventory of stock was prepared by the Inspector during the course of illegal survey and material was then used by the AO for making additions. Hence in those circumstances, we are of the opinion that in view of the two judgments of the Hon'ble apex Court, Revenue was entitled to use material collected during the course of illegal survey." 33. Though, it may be said that administrative exigency necessitating transfer of jurisdiction under Section 127 of the Act of 1961 included the facilitation of search and seizure yet....