2016 (7) TMI 711 - HC - Income Tax

Transfer of cases - Held that - The petitioner has sought for a direction to transfer their cases pertaining to the assessment proceedings for the assessment years 2008-09 to 2014-15 to some other officer inspite of the first respondent. However, the fact remains, the first respondent has concluded the proceedings and passed an order of assessment, which has been communicated to the petitioners and the petitioners have filed appeals before the Commissioner of Income Tax (Appeals) on 21.04.2016. Thus, the assessment proceedings having already been concluded and the petitioners having received the copies of the assessment orders and filed appeals against such orders, the question of issuing a direction to transfer the case cannot be consider On a perusal of the grounds of appeal filed by the petitioner before the Appellate Authority against the assessment order, the petitioner has raised a ground stating that the Assessing Officer erred in relying upon a bogus fax and letter which has no evidenciary value. Thus, the petitioners having raised this issue before the appellate authority as one of the grounds of challenge to the assessment order, this issue need not be decided in this Writ Petition in the light of the prayer sought for. The present Writ Petitions are only an attempt to thwart the assessment proceedings, especially when, the assessment beyond 31.03.2016, would become time barred. The Assessing Officer has concluded the hearing on 18.03.2016 and passed the assessment order on 30.03.2016, which is subject matter of challenge before the appellate authority. Therefore, it is one more reason to reject the relief sought for in this Writ Petitions. There was no prohibitory order prohibiting the department from proceeding further in accordance with the provisions of the Act. Therefore, it cannot be inferred that the order of attachment was passed in a hurried manner or for certain other collateral purpose. Further, the third respondent was functioning as a Deputy Director of Income Investigation for the period from 17.06.2013 to 18.07.2014 and thereafter, he has been transferred and posted as a Deputy Commissioner of Income Tax, Corporate circle-6(2), Chennai. The assessment proceedings were carried on by the first respondent and the hearings commenced only on 12.10.2015, much after the second respondent was transferred from Coimbatore i.e., on 18.07.2014. In fact, even on the date when the notice was issued under Section 142(1) of the Act on 26.12.2014, the second respondent was not functioning at Coimbatore.

Summary

Issues Involved:
1. Transfer of Income Tax Assessment Proceedings
2. Alleged Harassment by Assessing Officer
3. Validity of Assessment Orders
4. Allegations of Fabricated Evidence
5. Procedural Compliance by Income Tax Authorities

Issue-Wise Detailed Analysis:

1. Transfer of Income Tax Assessment Proceedings:
The petitioners sought a Writ of Mandamus to direct the Commissioner of Income Tax to transfer their assessment files from the current Assessing Officers to another officer. The court noted that the power to transfer cases under the Income Tax Act is governed by Section 127. According to this section, the Director General, Chief Commissioner, or Commissioner can transfer cases after giving the assessee a reasonable opportunity to be heard and recording the reasons for the transfer. The court highlighted that the petitioners had not filed an application for transfer with the Commissioner, which is a necessary step before seeking such a directive from the court. Consequently, the court found that the Writ Petitions were liable to be rejected on this ground alone.

2. Alleged Harassment by Assessing Officer:
The petitioners alleged that the first respondent had been unreasonably harassing them, citing a Special Court order under TNPID Act that showed the petitioner had repaid depositors. They claimed that the proceedings were based on a bogus fax message from one Mr. P.R. Balakrishnan, whose existence was not verifiable. The court examined the affidavits and counter-affidavits and found no substantial proof of malafide intentions by the respondents. The court noted that the petitioners had been cooperating in the assessment proceedings and only raised objections after several hearings, suggesting an attempt to thwart the assessment process.

3. Validity of Assessment Orders:
The court noted that the assessment orders for the petitioners had already been passed and communicated. The petitioners had filed appeals against these orders before the Commissioner of Income Tax (Appeals). Since the assessment proceedings were concluded and appeals were pending, the court found no grounds to issue a direction to transfer the cases.

4. Allegations of Fabricated Evidence:
The petitioners contended that the fax message from P.R. Balakrishnan was fabricated. The court observed that this issue was already raised by the petitioners in their appeal against the assessment order. Therefore, the court deemed it unnecessary to decide on this matter within the scope of the Writ Petition, as it was already under consideration by the appellate authority.

5. Procedural Compliance by Income Tax Authorities:
The petitioners argued that the assessment order for one of them was not passed on the date claimed by the respondent. The court examined evidence, including screen shots and postal records, and found that the assessment order was indeed passed and dispatched as claimed by the respondent. The court also noted that there was no prohibitory order preventing the department from proceeding with the assessment, and thus, the attachment order was not issued in a hurried or improper manner.

Conclusion:
The court concluded that the petitioners had not made out any case for granting the relief sought. The Writ Petitions were dismissed, and the connected Miscellaneous Petitions were closed. No costs were awarded.