2016 (10) TMI 776 - HC - Income Tax

Challenge to the transfer of case u/s 127 - initially assessee participated in the assessment proceedings and subsequently challenged the transfer orders - period of limitation for passing assessment u/s 153A - Held that - if the Petitioner were aggrieved by the order dated 9 December, 2013, it ought to have challenged the same immediately before the Assessing Officer at Raipur exercised his jurisdiction consequent to the transfer. In fact, in this case, the Petitioner not only failed to challenge the impugned orders dated 9 December 2013 and 23 January 2014 immediately after they were passed but in fact, let the Assessing Officer at Raipur act upon the transfer by responding to the notices issued by the Assessing Officer at Raipur. This is evident from filing of return of income consequent to the notice dated 31 December 2013 under Section 153A of the Act, filing a reply on merits to notice dated 14 August 2014 under Section 142(1) read with Section 153A and 143(2) of the Act and also particularly in penalty proceedings by challenging the same under the Act before the CIT(A). Therefore, the contention of the Petitioner that it had not participated in the assessment proceedings, consequent to the impugned order order of transfer under Section 127(2) of the Act, cannot be accepted. It is also to be noted that it is an admitted position between the parties that time to pass an Assessment Order under Section 153A of the Act would have normally expired on 31 March 2015. However, in view of the adinterim stay granted by the High Court of Chhattisgarh pending admission, the period between 3 March 2015 to 14 September 2016 would stand excluded. Decided against the assessee.

Summary

Issues Involved:
1. Validity of the order dated 9 December 2013 transferring the Petitioner’s assessment proceedings from Mumbai to Raipur.
2. Validity of the order dated 23 January 2014 rejecting the Petitioner’s request to centralize all assessment proceedings in Mumbai.
3. Preliminary objection regarding delay and laches in filing the petition.
4. Petitioner’s participation in proceedings and its implications on the challenge to the transfer order.

Detailed Analysis:

1. Validity of the Transfer Order Dated 9 December 2013:
The Petitioner challenged the order dated 9 December 2013 issued by the Commissioner of Income Tax, Mumbai, which transferred the Petitioner’s assessment proceedings from Mumbai to Raipur under Section 127 of the Income Tax Act, 1961. This transfer was part of centralizing the assessment proceedings of the Petitioner and its group for coordinated investigation. The Petitioner had objected to the proposed transfer, but the objections were not accepted, leading to the issuance of the transfer order. The High Court observed that the transfer order was a reasoned order preceded by a show cause notice and that the Petitioner should have challenged the order immediately if aggrieved.

2. Validity of the Order Dated 23 January 2014:
The Petitioner also challenged the order dated 23 January 2014 by the Central Board of Direct Taxes (CBDT), which rejected the Petitioner’s request to centralize all assessment proceedings in Mumbai. The Petitioner had made representations to the CBDT seeking centralization, which were rejected. The High Court noted that the Petitioner did not include a prayer to set aside this order in the petition filed before the High Court of Chhattisgarh, indicating a lack of immediate challenge.

3. Preliminary Objection Regarding Delay and Laches:
The Respondent raised a preliminary objection regarding the delay and laches in filing the petition. The High Court emphasized the importance of moving the Writ Court expeditiously when seeking an extraordinary writ of certiorari. The Court referred to the principles laid down by the Supreme Court in Chennai Metropolitan Water Supply And Sewerage Board Vs. T.T. Murali Babu, highlighting that delay and laches should not be lightly brushed aside. The Court found that the delay in the present case was not adequately explained. The Petitioner had moved the High Court of Chhattisgarh only on 27 February 2015, despite the impugned orders being dated 9 December 2013 and 23 January 2014. The High Court of Chhattisgarh had granted an ad-interim stay but had not admitted the petition, indicating that the reasons for delay were not examined.

4. Petitioner’s Participation in Proceedings:
The High Court observed that the Petitioner had participated in the assessment proceedings before the Assessing Officer at Raipur, which indicated acquiescence to the transfer order. The Petitioner had filed returns of income and responded to notices issued under Sections 153A and 142(1) read with 143(2) of the Income Tax Act. The Court noted that participation in proceedings does not mean awaiting an order but involves active engagement in the process. The Court concluded that the Petitioner’s conduct demonstrated acceptance of the impugned orders.

Conclusion:
The High Court dismissed the petition, emphasizing that the Petitioner had acquiesced to the impugned orders through participation in the proceedings. The Court found no sufficient explanation for the delay in challenging the orders and held that the extraordinary jurisdiction should not be exercised in such cases. The petition was dismissed with no order as to costs.