1997 (1) TMI 65 - HC - Income Tax

Summary

Issues Involved:
1. Agreement between Commissioners u/s 127(2)(a) of the Income-tax Act.
2. Validity of co-ordinated investigation as a ground for transfer u/s 127.
3. Communication of the transfer order to the petitioner.
4. Legality of passing a combined order for multiple assessees u/s 127.

Summary:

Issue 1: Agreement between Commissioners u/s 127(2)(a) of the Income-tax Act
The petitioner argued that the transfer order was invalid due to the lack of an agreement between the Commissioner of Income-tax, Ranchi, and the Commissioner of Income-tax, Delhi, as required by section 127(2)(a) of the Act. The respondents countered by presenting a letter dated November 27, 1996, which indicated an agreement between the concerned Commissioners. Additionally, the Board had approved the transfer, making the petitioner's argument devoid of substance.

Issue 2: Validity of co-ordinated investigation as a ground for transfer u/s 127
The petitioner contended that co-ordinated investigation is not a sufficient ground for transfer under section 127 of the Act. The court reviewed various precedents and concluded that co-ordinated investigation could be a valid ground for transfer if it serves the public interest and the purpose of the Act. The court disagreed with the view that co-ordinated investigation is not a valid ground for transfer and upheld the transfer order, noting that it was made in public interest and for efficient completion of assessment, launching of prosecution, and collection of revenue.

Issue 3: Communication of the transfer order to the petitioner
The petitioner claimed that the transfer order was not communicated to them. The respondents asserted that the order had been communicated, and the court found no merit in the petitioner's claim, noting that the order had indeed been sent to the concerned parties, including the petitioner.

Issue 4: Legality of passing a combined order for multiple assessees u/s 127
The petitioner argued that a combined order for multiple assessees is not permissible under section 127 of the Act. The court found this argument to be without substance, stating that when the grounds for transfer are the same or similar, there is no legal bar to passing a joint/combined order. The petitioner failed to show any prejudice caused by the combined order.

Conclusion:
The court dismissed the writ application, finding no merit in the petitioner's submissions. The transfer order was held to fulfill all the requirements of section 127 of the Act, including giving an opportunity of hearing, recording relevant and valid reasons, and communicating the order to the petitioner.