2006 (11) TMI 191 - HC - Income Tax

CIT transferring the file of the petitioner-assessee from Ferozepur to Baroda u/s 127 in impugned order of transfer reason recorded is that there is need for centralization for effective and coordinated investigation - there is nothing to show that there was any extraneous consideration or that reasons given were non-existent or irrelevant therefore transfer under section 127 is justified order of Commissioner require no interference

Summary

Issues:
Quashing of order transferring petitioner's file under Section 127 of the Income Tax Act, 1961.

Analysis:
The petitioner, a resident of Ferozepur, sought to quash an order transferring his file from the Assessing Authority in Ferozepur to Baroda. The petitioner argued that as a director of a company distributing medicines, with no business concerns in Baroda, the transfer was unjustified. The respondent's stand was that a nexus existed between the petitioner's company and the Baroda Company, warranting centralization for coordinated investigation.

The order of transfer, issued under Section 127 of the Act, was challenged by the petitioner on grounds of lack of reasons and failure to consider his objections. The petitioner contended that the transfer was unjustified as he had no personal business connections in Baroda. The respondent, however, justified the transfer citing the need for coordinated investigation due to inter-connections between the companies involved.

The High Court considered both parties' arguments and relevant case laws. It emphasized that transfer of an assessee's file to a distant location should only be done if necessary in public interest for coordinated investigation. The court noted that the impugned order provided a reason for centralization of cases, which was essential for effective investigation. The court found the nexus between the petitioner and the Baroda Company to be valid, as supported by legal precedents cited by the revenue's counsel.

Ultimately, the court held that the transfer was justified for coordinated investigation purposes, and there was no evidence of arbitrary decision-making or irrelevant reasons. As a result, the writ petition seeking to quash the transfer order was dismissed by the court.