2021 (12) TMI 107 - HC - Income Tax

Transfer of case u/s 127 - transfer of Petitioner's assessment from Mumbai to Bengaluru - why Petitioner's case should not be transferred to Bengaluru for completing the assessment proceedings? - HELD THAT - There is no case made out for transferring Petitioner's case to Bengaluru. Under Section 127(2) where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, where the Commissioner to whom such Assessing Officers are subordinate are in agreement, then the Commissioner from whose jurisdiction the case is to be transferred may, after giving the Assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order. It is true in this case Petitioner was given a show-cause notice and the personal hearing was granted before passing the order impugned but the reasons recorded in the order are certainly subject to judicial scrutiny and must be reasonable. In impugned order, Respondent No.1 has only narrated the facts but has not given any reasons why in the facts and circumstances of the case, Petitioner's case has to be transferred to Bengaluru. Petitioner is assessed in Mumbai and the firm of which Petitioner is a partner is also assessed in Mumbai. Pending of a case before the learned Addl.CMM cannot be accepted as reason for transfer of Petitioner's assessment from Mumbai to Bengaluru.

Summary

Issues:
Challenge to order transferring case jurisdiction under Section 127 of the Income Tax Act.

Analysis:
The judgment concerns a petition challenging an order transferring the petitioner's case to a different jurisdiction under Section 127 of the Income Tax Act, 1961. The petitioner, a partner in a firm engaged in the business of manufacturing and selling gold ornaments, had his case transferred to the charge of DCIT, Central Circle-1(3), Bengaluru by the CCIT, Mumbai-27. The basis for the transfer was an incident where employees of the petitioner's firm were intercepted in Bengaluru with gold jewellery belonging to the firm. Investigations were initiated, and a case was pending before the Addl.CMM, Bengaluru involving the DDIT (Investigation) Unit-3(3), Bengaluru as a respondent.

The court analyzed the provisions of Section 127(2) of the Act, emphasizing that the reasons for transferring a case must be reasonable and subject to judicial scrutiny. The court noted that while the petitioner was given a show-cause notice and a hearing before the order was passed, the impugned order lacked adequate reasoning for transferring the case to Bengaluru. The court highlighted that the mere pendency of a case before the Addl.CMM in Bengaluru could not serve as a valid reason for transferring the petitioner's assessment from Mumbai to Bengaluru.

Ultimately, the court allowed the petition and issued a Writ of Certiorari to quash and set aside the order transferring the petitioner's case to Bengaluru. However, the petitioner was directed to cooperate fully with the authorities in Bengaluru, provide necessary documents, and appear for statements when required, emphasizing cooperation with the Bengaluru office of the Revenue. The judgment concluded with the disposal of the petition, providing clarity on the transfer of jurisdiction and the petitioner's obligations in the investigative process.