2014 (3) TMI 772 - HC - Income Tax

Validity of order u/s 127 of the Act transfer of case - Reassessment - Time-barred notice u/s 148 of the Act Held that - These notices dated 23 July 2013 for re-opening would have been issued after the Assessing Officer at Hyderabad had come to a reasonable belief that Income chargeable to tax has escaped assessments and recorded reasons for the same - Thus, the jurisdiction has already been exercised by the DCIT at Hyderabad after the passing of impugned order dated 31 August 2012 under Section 127 of the Act. The petitioner is not challenging the order dated 31 August 2012 at the earliest and letting all believe particularly, the Assessing Officer i.e. Deputy Commissioner of Income Tax at Hyderabad that the order of transfer dated 31 August 2012 under Section 127 of the Act from Mumbai to Hyderabad was acceptable to the petitioner - This led the Assessing Officer to exercise his jurisdiction - the delay in filing a petition in the Court of over two months and the neglect in moving the Court to seek a stay on the impugned order dated 31 August 2012 is unexplained. There is no reason to entertain the present petition - The petitioner s conduct is indicative of it having accepted the order of transfer dated 31 August 2012 - This is as the petition was filed only in February 2013 and thereafter not moving the Court for any interim relief. It is only when the Assessing Officer at Hyderabad issued four impugned notices dated 23 July 2013 under Section 148 of the Act, seeking to re-open the earlier Assessments that this petition was mentioned on 12 August 2013 and placed on board on 20 August 2013 for urgent interim relief and amendment - This is a clear case of laches on the part of the petitioner Decided against Assessee.

Summary

Issues:
1. Challenge to order transferring petitioner's case under the Income Tax Act from Mumbai to Hyderabad.
2. Legality of notices issued for reassessment for multiple assessment years.

Analysis:

Issue 1: Challenge to Transfer Order
The petitioner challenged the order transferring their case from Mumbai to Hyderabad under Section 127 of the Income Tax Act, 1961. The petitioner argued that the transfer order was in breach of natural justice as no proper notice was given, and the order itself did not consider their objections. They contended that since their management was with Patel Engineering Limited in Mumbai, the transfer to Hyderabad based on a search at KNR Constructions was unjustified. The petitioner also claimed that the transfer order was nonspeaking and lacked reasoning. On the other hand, the revenue argued that the transfer was done after granting the petitioner a personal hearing and was in accordance with principles of natural justice.

Issue 2: Legality of Reassessment Notices
The petitioner further contested the jurisdiction of the Deputy Commissioner of Income Tax at Hyderabad to issue notices for reassessment for the Assessment Years 2009-10 to 2012-13. They argued that since the transfer of their case from Mumbai to Hyderabad was unlawful, the reassessment notices were without jurisdiction. The revenue, however, claimed that the delay in challenging the transfer order and seeking relief indicated the petitioner's acceptance of the transfer. The court noted the delay in filing the petition after receiving the transfer order and the subsequent issuance of reassessment notices. The court found the petitioner's conduct indicative of accepting the transfer order, leading to a refusal to entertain the petition due to laches on the petitioner's part.

In conclusion, the High Court dismissed the petition, citing the petitioner's delay in challenging the transfer order and seeking relief as acceptance of the transfer. The court refused to exercise its writ jurisdiction under Article 226 of the Constitution of India due to the petitioner's conduct, leading to a refusal to examine the petitioner's grievances on merits.