2019 (11) TMI 988 - HC - Income Tax

Transfer of a case u/s 127 - sufficient reasons - centralisation of investigation and assessment - HELD THAT - There is no denying the fact that transactions were undertaken between the members of the Keshav Lal Group and the petitioner. Since the petitioner is in the other end of the said transaction undertaken by members of the Keshav Lal Group, which are under investigation, and the petitioner too has been issued notice u/s 153C, it is only reasonable and proper that the proceedings are centralized so that a wholesome view could be taken by the same officer who is undertaking the assessment. In fact, the centralization, in our view, would be to the advantage to the petitioner as well, since the petitioner would not have to deal with two sets of officers at Delhi and Noida. The submission that no reasons are to be found in the impugned order is not correct inasmuch, as, the reasons are contained in the proposal for centralization dated 10.07.2019 which was communicated to the petitioner and the petitioner s objections were also called for. The petitioner has been granted sufficient opportunity for hearing and has also been apprised of the reasons for the said transfer. We therefore, do not find any merit in this petition and accordingly, dismiss the same.

Summary

Issues:
1. Transfer of cases under Section 127 of the Income Tax Act, 1961 from one jurisdiction to another.

Detailed Analysis:

Issue 1: Transfer of cases under Section 127 of the Income Tax Act, 1961
The petitioner challenged an order transferring their case from ACIT/DCIT, Circle 19(1), New Delhi to ACIT/DCIT, Central Circle-II, Noida under Section 127 of the Income Tax Act, 1961. The transfer was based on search and seizure operations conducted in the Keshav Lal Group. The Principal Commissioner of Income Tax (PCIT) issued a letter for centralization of cases related to the Keshav Lal Group to Noida for coordinated post-search investigation and assessment. The petitioner disputed any involvement with the group searched and claimed no search and seizure was conducted on their behalf. However, statements from individuals suggested otherwise, indicating potential channeling of unaccounted money through the petitioner. The centralization was proposed to ensure a comprehensive view of transactions between the petitioner and the searched group. The petitioner's objections primarily focused on the genuineness of transactions with the group.

Issue 1 Contd.:
The court rejected the petitioner's argument that the mere search of the Keshav Lal Group was insufficient reason for centralization. It was noted that notices under Section 153C had been issued to the petitioner, indicating ongoing assessment proceedings related to the search operation. The court found the reasons for transfer clearly outlined in the communication dated 10.07.2019, and the PCIT's consented to the transfer. Given the interconnected transactions and ongoing assessments, centralization was deemed appropriate for a holistic assessment. The court emphasized that the petitioner had been given ample opportunity to present their objections and reasons for transfer were communicated effectively. The dismissal of the petition did not preclude the petitioner from presenting their defense during the assessment under Section 153C.

This detailed analysis covers the issues involved in the legal judgment, addressing the transfer of cases under Section 127 of the Income Tax Act, 1961, and the court's rationale for upholding the transfer decision based on the circumstances presented in the case.