2021 (3) TMI 1069 - HC - Income Tax

Transfer of the proceedings u/s 127(2)(a) - Centralization of case under search - Faceless Assessment - whether the authority concerned committed an error in passing the order of transfer under Section 127 ? - jurisdiction of the Assessing Officer as per section 124 - HELD THAT - It appears from the materials on record that the main purpose of transfer on the ground of centralization of cases is to investigate the dubious transactions of the writ-applicant with various related entities during the relevant period. At this stage we may refer to the reasons assigned by the Commissioner of Income Tax (Exemption) for centralization while disposing of the objections raised by the writ-applicant. The transfer order passed under Section 127 of the Act is more in the nature of an administrative order rather than a quasi-judicial order and the assessee cannot have any right to choose his Assessing Authority as no prejudice can be said to have been caused to the assessee depending upon which authority of the department passes the Assessment Order. The assessee can only be concerned with getting an opportunity of hearing before the concerned Assessing Authority and adduce his evidence and make his submissions before the concerned Assessing Authority. The Income Tax department has recently introduced a scheme of Faceless Assessments with a view to avoid personal hearing and physical interaction of the assessee and the Assessing Authority altogether. The assessee need not even know the name of the Assessing Authority who will deal with his case. We have also looked into the judgments relied upon by Mr.Darshan Patel the learned counsel appearing for the writ-applicant. However none of the judgments are of any avail to the writ-applicant. We are convinced that no case is made out for interference.

Issues Involved:
1. Validity of documents issued without Document Identification Number (DIN).
2. Applicability of provisions of Section 153A/153C.
3. Validity of reasons for centralization of the case.
4. Permissibility of inter-city transfer of cases during the Covid-19 pandemic.
5. Assessment jurisdiction for a Trust case.
6. Impact of an existing High Court stay on scrutiny assessments.
7. Inconvenience and hardship due to transfer from Ahmedabad to Vadodara.

Detailed Analysis:

1. Validity of Documents Issued Without DIN:
The writ-applicant argued that documents issued without a DIN are invalid. The Revenue clarified that urgent and important communications cannot be withheld due to technical problems, indicating that the absence of a DIN does not invalidate the documents.

2. Applicability of Provisions of Section 153A/153C:
The writ-applicant contended that the provisions of Section 153A/153C are not applicable. The Revenue acknowledged this but emphasized that the transfer was for coordinated investigation, not under Sections 153A/153C. The court referenced the judgment in Hindustan M.I. Swaco Limited, which supports the transfer for effective investigation even without search proceedings.

3. Validity of Reasons for Centralization of the Case:
The writ-applicant claimed the reasons for centralization were vague. However, the court found the reasons valid, noting that coordinated investigation was necessary due to the interconnected transactions and dubious activities involving the writ-applicant and related entities. The court cited the Supreme Court's decision in Pannalal Binraj, affirming that coordinated investigation is a legitimate reason for transfer.

4. Permissibility of Inter-City Transfer of Cases During the Covid-19 Pandemic:
The writ-applicant argued that inter-city transfers during the pandemic were not permitted by CBDT. The court did not find this argument compelling, as the primary concern was the necessity of coordinated investigation, which justified the transfer despite the pandemic.

5. Assessment Jurisdiction for a Trust Case:
The writ-applicant insisted that being a Trust, its case should be assessed in the specialized charge of 'Exemptions'. The Revenue countered that officers in the central charge are also capable of handling such assessments. The court supported this view, noting that the Faceless Assessment Scheme, 2019, allows for assessments by various regional or central charges, not necessarily by the ACIT (Exemption).

6. Impact of an Existing High Court Stay on Scrutiny Assessments:
The writ-applicant mentioned that the High Court had stayed scrutiny assessments for certain years. The court did not address this issue directly, implying that the stay did not affect the transfer for coordinated investigation purposes.

7. Inconvenience and Hardship Due to Transfer from Ahmedabad to Vadodara:
The writ-applicant cited inconvenience and hardship due to the transfer. The court acknowledged the potential inconvenience but emphasized that the necessity for coordinated investigation outweighed these concerns. The court referenced the judgment in Shree Ram Vessel Scrap P. Ltd., which supports transfer for effective investigation despite potential inconvenience.

Conclusion:
The court concluded that the transfer order under Section 127 of the Income Tax Act was justified for coordinated investigation. The writ-application was rejected, and the interim relief was vacated. The court emphasized that the assessee cannot choose their Assessing Officer and that coordinated investigation is a valid reason for transfer.

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