2015 (7) TMI 1025 - HC - Income Tax

Assessment proceedings transferred to Ghaziabad - retransfer from Patiala to Ghaziabad - Held that - Persuing the impugned order we satisfied that it does not meet the parameters of an order required to be passed under Section 127(2) of the Act. Apart from use of the words Coordinated Investigation and Administrative Convenience , the order does not record the nature of Coordinated Investigation and Administrative Convenience , that necessitated transfer. This apart as assessment proceedings were transferred from Delhi to Patiala no reason has been assigned for their retransfer to Ghaziabad. The mere use of the words Coordinated and Administrative Convenience does not absolve the department of its obligation to assign reasons, howsoever brief and in reasons that compelled the revenue to order transfer from Delhi to Patiala and then from Patiala to Ghaziabad. The words Coordinated Investigation and administrative coordination are not a magic wand that the revenue can waive without intimating the reasons underlying the need for transfer. The question is not whether an order is quasi judicial or administrative but whether rights of a party can be adversely effected, without assigning any reason? The answer to this question is obviously that reasons, howsoever brief must be assigned before passing such an order. It would be appropriate to point out that nine assessees reside in Punjab. Thus set aside the impugned order and direct the Commissioner of Income Tax, Ludhiana to pass a fresh order - Decided in favour of assessee .

Summary

Issues: Transfer of assessment proceedings without proper reasons

Analysis:
In the judgment delivered by the High Court of Punjab and Haryana, the primary issue revolved around the transfer of assessment proceedings without providing adequate reasons. The petitioner sought a writ of certiorari to set aside an order transferring assessment proceedings to Ghaziabad. The counsel for the petitioner argued that the impugned order lacked reasons as required by law, especially regarding the re-transfer from Patiala to Ghaziabad. The respondent's counsel contended that the terms "Coordination" and "Administrative Convenience" in the order were sufficient to infer the reasons for the transfer, emphasizing that such orders are administrative in nature under Section 127(2) of the Income Tax Act, 1961.

The court carefully examined the impugned order and concluded that it did not meet the necessary parameters of an order under Section 127(2) of the Act. Despite mentioning "Coordinated Investigation" and "Administrative Convenience," the order failed to specify the nature of these aspects that warranted the transfer. Notably, in previous cases where assessment proceedings were transferred from Delhi to Patiala, no reasons were provided for the subsequent re-transfer to Ghaziabad. The court emphasized that even administrative orders must include reasons, however brief, to ensure transparency and fairness to the parties involved.

Consequently, the court allowed the writ petition, set aside the impugned order, and directed the Commissioner of Income Tax, Ludhiana, to issue a fresh order with proper reasons, including the rationale for the retransfer from Patiala to Ghaziabad. The court also highlighted the importance of considering the jurisdictional power to re-transfer assessments already assigned to a specific location. The directive required the Commissioner to act within one month of receiving a certified copy of the order, emphasizing that the observations made should not be construed as a judgment on the merits of the case for either party or the revenue.