TaxTMI 
TaxTMI 
2026 (4) TMI 488
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.... tax Act, 1961 issued in the name of the Petitioner was illegal, bad in law and without jurisdiction. (b) A writ of Certiorari or Writ, Order or Direction in the nature of Certiorari, or any other appropriate Writ, Order or Direction under Article 226/227 of the Constitution of India, calling upon Respondent No.1 to transmit and certify the records relating to warrant of authorization of search on Petitioner so that the said search warrant and proceedings initiated thereunder may be set aside and/or quashed and conscionable justice may be rendered; (c) A Writ of Certiorari or Writ, Order or Direction in the nature of Certiorari, or any other appropriate Writ, Order or Direction under Article 226/227 of the Constitution of India, quashing the impugned order dated 17.12.2013 (Annexure 'A') passed under section 127 of the Act transferring the case of the Petitioner from Respondent No.3 to Respondent No.4; (d) A Writ of Certiorari or Writ, Order or Direction in the nature of Certiotrari, or any other appropriate Writ, Order or Direction under Article 226/227 of the Constitution of India, quashing impugned notices dated 18.12.2013 (Annexure 'B'....
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....06.2011 giving out reason that a coordinated investigation was required to be carried out. Vide another notice dated 18.12.2013 issued under Section 153A(1)(a) of the Act, petitioner was asked to submit a true and correct returns of total income for Assessment Years 2006-2007 to 2011-2012. Aggrieved of the said notices, the instant petition has been filed before this Court. 6. Learned senior counsel appearing for the petitioner submits that neither notice under Section 127 of the Act has been issued stating reasons as to why coordinated investigation is required for the relevant Assessment Years, nor the respondents have stated any link to the alleged incriminating material. Learned senior counsel has submitted that merely for coordinated investigation, the transfer of case under Section 127 of the Act cannot be done. He also invited attention to the notice under Section 127(1) of the Act issued on 09.12.2013 wherein the date of 30.06.2012 is mentioned whereas in the written submissions and in the reply it has been stated that search was carried out on 30.06.2011. Learned senior counsel submits that thus, there was no search conducted on 30.08.2012 or 30.06.2012 and for the s....
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....n 158 of the Act could be issued. Further he relied on the judgment passed by the Punjab and Haryana High Court in Misty Meadows Private Limited vs. Union of India CWP No.5139 of 2024 (O&M), decided on 13.05.2024 to submit that as the premises did not belong to the petitioner-company and even if any incriminating articles or documents were found, then a notice under Section 153C of the Act was required to be issued to the petitioner keeping in view the law laid down in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC). Learned senior counsel has further submitted that the order under Section 127 of the Act does not mention the date of the alleged search at the petitioner's premises and is ex facie arbitrary and ambiguous. 8. Learned senior counsel has further argued that the statutory period of limitation to pass an assessment order under Section 153B read with Section 143(3) of the Act has expired and no assessment can be made beyond expiry of the period and, therefore, the impugned notices are liable to be quashed by this Court. He has submitted that although the Court passed an interim order on 24.02.2014 granting only protection to the petitioner....
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....is also be shown to the Court. It is submitted that the legality and validity of the search and seizure proceedings are not amenable to the writ jurisdiction of this Court and the respondents have relied on the judgment of the Delhi High Court in Pavel Garg vs. Income-tax Department [2025] 175 taxmann.com 1082 (Delhi), which has been upheld by Hon'ble Supreme Court in its order dated 20.06.2025. He also relied on the judgment passed by the Calcutta High Court in Dia Gold Jewels (P.) Ltd. vs. Principal Commissioner of Income-tax [2025] 174 taxmann.com 1004 (Calcutta). He has also pointed out that the search and seizure have been carried out beyond the territorial jurisdiction of this Court and therein, this Court ought not to examine whether the search and seizure action was legal or not. 11. As regards the premises where the search was conducted is a disputed question of fact. Learned counsel has also submitted in the written submissions that the search and seizure under Section 132 of the Act were undertaken after forming reasons to believe. The premises of the petitioner, inter alia, at A-503, Ansal Chambers, Bhikaji Cama Place, New Place was subjected to search and during ....
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....oner of Income Tax [2025] 174 taxmann.com 1001 (Calcutta) 11 Pavel Garg vs. Income-Tax Department [2025] 176 taxmann.com 307 (SC) 12 Pavel Garg vs. Income-Tax Department [2025] 175 taxmann.com 1082 (Delhi) 13 Alta Vista Info Solutions (P.) Ltd. vs. Principal Commissioner of Income Tax [2025] 181 taxmann.com 172 (Delhi) 14 Bhupinder Singh vs. Principal Commissioner of Income Tax [2025] 181 taxmann.com 912 (Punjab & Haryana) 13. We have heard the arguments at length and considered the written submissions filed by both the parties. 14. Before dealing with the submissions, it would be apposite to quote the provisions of Sections 127, 132, 153A, 153C and 144 of the Act 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 jurisdi....
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....n 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 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 commenced after the date of such order or direction in respect of any year. Search and seizure. 132.(1) Where the [Principal Director General] or Director General or [Principal Director or] Director] or the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner] [or Additional Director or Additional Commissioner] [or Joint Director or Joint Commissioner] in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was iss....
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....as reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing;] [(iib) require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000), to afford the authorised officer the necessary facility to inspect such books of account or other documents;] (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search: [Provided that bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business;] (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bull....
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....uspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the [[Principal Director General or] Director General or [Principal Director or] Director] or any other [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner] or [Additional Director or Additional Commissioner] [or Joint Director or Joint Commissioner] to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation under sub-section (1), such [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or Commissioner] may, notwithstanding anything contained in section [120], authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft.] [Explanation.-For the removal of doubts, it is hereby declared that the reason to suspect, as recorded by the income-tax authority under this sub-section, shall not be disclosed to any person or any authority or the Appellate Tribunal.] ....
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...., bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] (5) [***] (6) [***] (7) [***] (8) The books of account or other documents seized under sub-section (1) [or sub-section (1A)] shall not be retained by the authorised officer for a period exceeding [one month from the end of the quarter in which the order of a....
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....ted, the authorised officer, for reasons to be recorded in writing, is satisfied that for the purpose of protecting the interest of revenue, it is necessary so to do, he may with the previous approval of the Principal Director General or Director General or the Principal Director or Director, by order in writing, attach provisionally any property belonging to the assessee, and for the said purpose, the provisions of the Second Schedule shall, mutatis mutandis, apply. (9C) Every provisional attachment made under sub-section (9B) shall cease to have effect after the expiry of a period of six months from the date of the order referred to in sub-section (9B). (9D) The authorised officer may, during the course of the search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, make a reference to,- (i) a Valuation Officer referred to in section 142A; or (ii) any other person or entity or any valuer registered by or under any law for the time being in force, as may be approved by the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Direct....
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....hether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year.] Best judgment assessment. 144. [(1)] If any person- (a) fails to make the return required [under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 3[or fails to comply with a direction issued under sub-section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the [Assessing] Officer, after taking into account all relevant material which the [Assessing] Officer has gathered, [shall, after giving the assessee an opportunity of being heard, make the assessment] of the total income or loss to the best of his judgment and determine the sum pa....
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....in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years]: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment year or years] referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 1[and for the relevant assessment year or years]: [Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment yea....
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....[Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] f....
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....election shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021.]" 15. In Kamal Varandmal Galani (supra), the Bombay High Court has held as under: "14. The instructions make it clear that while sending a proposal for centralisation, reasons had to be reflected including the relationship of the petitioner with the main persons of the group. No such sustainable reasons are forthcoming from the records except speculation connecting the Petitioner and the subject material and a request from the Principal Commissioner of Income Tax, Jaipur for centralization of the case. In fact the Deputy Commissioner of Income-tax-19(3), Mumbai ought to have refused to accede to the request for centralization inasmuch as it had not received any cogent material or reasons, which would have formed a basis for the transfer of the case to the Deputy Commissioner of Income-tax, Central Circle-3, Jaipur." 16. In Anuben Lalabhai Bharwad (supra), the Gujarat High Court has held as under: "9. On plain reading of the aforesaid provision of law, it is emergin....
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....with M/s. HVK International Group, Surat. The authority appears to have drawn inferences and simply because Shri Sanjay Dhanak had some linkage with M/s. HVK International Group. Surat, the authority presumed that petitioner also must have remove connections and thereby, in casual exercise of power, the provision of Section 127 of the Act is resorted to and transferred the case from Ahmedabad to Surat. Even to examine whether any linkage remotely is found of the petitioner with said M/s. HVK International Group, Surat, this Court has gone through the statements recorded during the course of search which are attached to the memo of petition from Page-49 onwards and from those questions - answers also which are part of the record, it would emerge that by any stretch of imagination, it can be said that the petitioner has any linkage with said M/s. HVK International Group, Surat. This Court found from the statements, material on record as well as from the affidavits filed in a cognate petitions that no connection is emerging except a bare transaction of purchase of flat at Science City Road, Ahmedabad by the husband of the petitioner. Except that solitary circumstance which is no suffi....
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....transfer in effect provides for a machinery provision. It must be given its full effect. It must be construed in a manner so as to make it workable. Even Section 127 of the Act is a machinery provision. It should be construed to effectuate a charging Section so as to allow the authorities concerned to do so in a manner wherefor the statute was enacted." 19. We notice that after coming into force the faceless regime, it is apparent that there is no fundamental right of any assessee to be assessed at a particular place. At the same time, we also observe that while under Section 124 of the Act, the assessment must be carried out at the principal place of business, but when Section 127 of the Act is invoked, the assessment can be done at any other place too. The venue of assessment can be changed for several reasons, which may be necessary for the convenience of the department. One of the ground for transfer of case can be to conduct a coordinated assessment. However, as noticed in K.P. Mohammed Salim (supra), the power must not be exercised capriciously or mala fidely. If the venue is changed periodically for no apparent reason, it can be an example of abuse of power, which m....
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....ncome 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 valid reasons to justify the transfer and such reasons are neither perverse or arbitrary or mala fide this Court would not interfere with the reasonable exercise of his discretion." 22. Having noticed the law relating to transfer and the facts of the present case, we find that the transfer of the petitioner's case from DCIT, Central Circle, Alwar to ACIT, Central Circle-2, Faridabad is for the reason to conduct a coordinated investigation. Before transferring the case, show cause notice was issued and reasons were assigned in the notice. The department has exercised its administrative powers taking into consideration the overall circumstances, esp....
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....he Act, but there is no incriminating material document, no based search enquiry was made from the petitioner nor there is any material, to which the petitioner was confronted merely by issuance of warrant under Section 132 of the Act. An assessee would not be presumed to have submitted wrong returns unless there is an incriminating material found. 27. In Manish Maheshwari vs. ACIT (2007) 289 ITR 341 (SC), Hon'ble Supreme Court has held that the provisions of Section 153A and 153C are drastic in nature and has draconian consequence. The satisfaction of condition under Section 132 of the Act need to be on record and by simply mentioning name in the annexure to the warrant of authorisation would not make a presumption of initiating proceedings under Section 153A of the Act. Therefore, the notice issued to the petitioner under Section 153A of the Act asking for filing revised returns without there being any incriminating material mentioned would be carrying out unjustified and illegal exercise. Therefore, we answer the second issue against the Revenue and hold that the notice under Section 153A is illegal and deserves to be quashed. 28. This Court notices that during the p....