2018 (7) TMI 1023 - HC - Income Tax

Transfer of case u/s 127 - petitioner has raised the objections - respondent did not consider the objections - authority of Centralisation Committee u/s 127(2) - Held that - Revenue has not placed anything on record to show that CCIT Pune has given a consent to request of CCIT (Central) Mumbai so as to constitute agreement as a pre-condition for invoking powers under Section 127 of the Income-Tax Act. Absence of dissenting note from officer of equal rank who has to agree to the proposed transfer would not constitute Agreement envisaged under Section 123(2)(a) of the Act. Thus making the impugned order dated 2nd July 2018 without jurisdiction. The impugned order dated 2nd January 2018 and the impugned notice dated 14th February 2017 are hereby quashed and set aside. Petition allowed in above terms with no order as to costs.

Summary

Issues:
Challenge to the transfer order under Section 127(2) of the Indian Income-Tax Act, 1961 for lack of jurisdiction and compliance with legal requirements.

Analysis:
The Writ Petition under Article 226 challenges the transfer order dated 2nd January, 2018, transferring the petitioner's case from Kolhapur to Mumbai, alleging lack of jurisdiction. The petitioner contends that the notice did not reference an agreement between officers of equal rank at Mumbai and Kolhapur, as required by Section 127(2) of the Act. The petitioner raised objections to the transfer, citing difficulties, but the order was passed without considering these objections. The petitioner sought to quash the impugned notice and order, arguing non-compliance with legal provisions.

The petitioner's objections were conveyed to higher authorities, and despite further objections raised by the petitioner, the transfer order was issued without due consideration. The petitioner argued that the transfer proceedings were initiated based on a decision by the Centralised Committee, not as required under Section 127(2) of the Act. The petitioner highlighted the absence of a positive agreement between authorities of equal rank, rendering the order illegal and void.

The Principal Commissioner of Income-Tax (2), Kolhapur, in response, asserted that proper communication and deliberations were conducted before passing the transfer order. The reply detailed the process of centralization and coordination between authorities, emphasizing the absence of dissenting notes and the agreement reached between relevant officers. However, the petitioner disputed the existence of a formal agreement as required by law.

In the judgment, the court relied on precedents, including the Supreme Court's decision in Noorul Islam Educational Trust case, emphasizing the necessity of a positive agreement between jurisdictional Commissioners of Income-Tax for invoking powers under Section 127 of the Act. The court found that the absence of a dissenting note does not constitute an agreement as mandated by law. Consequently, the court quashed the impugned order and notice, declaring the order issued without jurisdiction. The petition was allowed with no costs imposed.