2017 (12) TMI 57 - HC - Income Tax

Transfer of cases u/s 127 - reasons for consolidating and transfer of all the assessment proceedings of the said Assessee Group at Belagavi - Held that - Principal Commissioner has not assigned any cogent and over- riding reasons to transfer the cases of assessees from Bengaluru to Belagavi and consolidated all the 15 assessments at Belgavi. Obviously the convenience of the petitioners-assessees group for getting these assessments centralized at Bengaluru is apparent, not only because more number of assessees of the said group were already being assessed at Bengaluru, but the assessees desire and administrative convenience to transfer all cases to Bengaluru has not been controverted in any manner by the Department. The reason in the impugned order as quoted above namely for effective and co-ordinated investigation and completion of assessments , can be met even at Bengaluru also and it is not necessary that the assessee should be put to inconvenience for the said reason specially when there is no contrary strong reason given in the impugned order to transfer all the cases to Belagavi. The respondent-Department comprises of Public Servants and they have their Offices and Officers at Bengaluru, who can undertake the assessments work for all the 15 assessments of this group at any of these two places. Therefore, the comparative convenience of assessees should be given the preference.

Summary

Issues involved:
Transfer of assessment cases from Bengaluru to Belagavi, administrative convenience, consolidation of assessments, reasons for transfer, jurisdiction of assessing authority, convenience of assessees, quashing of impugned order, direction for transfer of cases to Bengaluru, issuance of fresh notices, limitation for raising objections.

Analysis:

Transfer of assessment cases from Bengaluru to Belagavi:
The petitioners, who are assessees of the same group, sought consolidation and transfer of assessments to the competent assessing authority in Bengaluru. However, the Principal Commissioner of Income Tax issued an order transferring even the assessments at Bengaluru to Belagavi. The petitioners challenged this transfer on the grounds of administrative convenience.

Reasons for transfer:
The Principal Commissioner cited the need for effective and coordinated investigation and completion of assessments as the reason for transferring the cases to Belagavi. The order stated that the decision was made after considering submissions from the assessee group and discussions with other tax authorities.

Convenience of assessees:
The petitioners argued that most of their business activities were in Bengaluru, and transferring the cases there would be more convenient for administrative purposes. They emphasized that attending and cooperating in the proceedings would be easier if the assessments were centralized in Bengaluru.

Judicial Analysis:
The Court noted that the Principal Commissioner did not provide sufficient reasons to justify transferring all assessment cases to Belagavi. It was observed that the convenience of the assessees, who were mostly assessed in Bengaluru, was a significant factor. The Court highlighted that the reason given for the transfer could have been achieved in Bengaluru as well, and there was no strong contrary reason to support the transfer to Belagavi.

Quashing of impugned order:
Based on the lack of proper reasons for consolidating and transferring all assessment proceedings to Belagavi, the Court deemed the order liable to be quashed. Consequently, the order was quashed, and the respondent-Department was directed to transfer all 15 assessment cases of the group to Bengaluru for completion in accordance with the law.

Issuance of fresh notices and limitation:
The Court allowed the writ petitions, directing the assessing authority in Bengaluru to continue the assessment proceedings from where they were left off. Additionally, the authority was permitted to issue fresh notices to the assessees, who were instructed not to raise objections regarding the expiration of limitation due to the pending writ petitions.

In conclusion, the Court found in favor of the petitioners, emphasizing the importance of assessees' convenience and the lack of compelling reasons for the transfer to Belagavi. The judgment highlighted the need for proper justification in administrative decisions impacting taxpayers and upheld the petitioners' request for the transfer of assessments to Bengaluru.