2014 (10) TMI 543 - HC - Income Tax

Power to transfer cases u/s 127 Request to transfer case file rejected - Jurisdiction - Held that - The object for which the provision was enacted is for the purpose of administrative convenience the assessee sought for transfer by representation dated 12.02.2014 submitted through the assessee's representative in person on the date of hearing - as the first petitioner/assessee stating that she has permanently shifted her residence at Chennai, on the sole ground of her convenience, she seeks for transfer of the files - the assessee in default was not only the first respondent, but also her husband, Late Mr.Y.Victor as well - No returns were filed from the AY 2007-08 onwards and during the relevant period, there were several sale transactions in respect of properties situated at Tanjore which would fall within the jurisdiction of the first respondent. It is only after notices were issued u/s 148, 142(1), of the Income Tax Act, returns were filed at Chennai for the AYs 2009-10 and 2010-11, but were not filed before the first respondent - the proceedings cannot be stated to be an order either arbitrary or erroneous, more so, when the second respondent has recorded reasons - the order being a reasoned order and nothing has been placed before the Court to show that the order is either ex facie perverse or vitiated by any patent error and that the power u/s 127 of the Income Tax Act could be exercised in accordance with the Section, if proper grounds are made out - In the order reasons have been assigned for rejecting the request for transfer, which is based on the records the order for refusing to transfer the case from Tanjore to Chennai is upheld Decided against assessee.

Summary

Issues Involved:
1. Transfer of Income Tax files.
2. Jurisdiction and convenience of assessment proceedings.
3. Compliance with Section 127 of the Income Tax Act.
4. Validity of the impugned order rejecting the transfer request.

Issue-wise Detailed Analysis:

1. Transfer of Income Tax files:
The petitioner initially sought a Writ of Mandamus to transfer the Income Tax files of her late husband from Tanjore to Chennai. During the pendency of the writ petition, the court directed the respondents to report the decision on this request. The second respondent rejected the request, leading the petitioner to amend the prayer for a Writ of Certiorarified Mandamus to quash the rejection order and direct the transfer.

2. Jurisdiction and convenience of assessment proceedings:
The petitioner argued that she and her son, residing in Chennai, would find it convenient if the files were transferred there. She highlighted that she was unaware of her late husband's transactions and had already paid advance tax. The learned counsel for the petitioner contended that retaining the files in Tanjore was unjustified as it caused inconvenience and no prejudice would be caused to the department if transferred to Chennai.

3. Compliance with Section 127 of the Income Tax Act:
Section 127 of the Income Tax Act empowers the Commissioner to transfer cases for administrative convenience after giving the assessee a reasonable opportunity of being heard and recording reasons. The court noted that the first respondent initiated proceedings as the transactions occurred in Tanjore, and the petitioner's husband did not file returns from 2007 onwards. The court emphasized that the Commissioner must consider the circumstances of each case before transferring files.

4. Validity of the impugned order rejecting the transfer request:
The court examined previous judgments, including Autofin Ltd. vs. Commissioner of Income Tax, which highlighted that the discretion to transfer cases lies with the Commissioner, and the court would not interfere unless there was a patent error. The court found that the second respondent had provided a reasoned order rejecting the transfer based on the facts that the transactions occurred in Tanjore, and the petitioner's younger son, residing in Tanjore, could assist in collecting necessary details. The court concluded that the impugned order was neither arbitrary nor erroneous and dismissed the writ petition.

Conclusion:
The court dismissed the writ petition, upholding the second respondent's decision to retain the Income Tax files in Tanjore. The court found that the order was reasoned and based on the records, and there was no patent error or arbitrariness in the decision. The petitioner's convenience alone was insufficient to warrant a transfer of files.