2022 (5) TMI 114 - HC - Income Tax

Transfer of case u/s 127 - Transfer the jurisdiction to DCIT, Central Circle-8(1), Mumbai from Income Tax Officer Ward-4(2)(2), Ahmedabad - HELD THAT - We are of the view that facility of investigation or coordinated investigation can be a substantial ground for transfer from one officer to another Officer, more particularly, when the department has some material to establish nexus of the writ applicant with the searched person. One cannot overlook the fact that the writ applicant is suspected to be involved in dubious transactions, whereby as an angadia is found to be habitually claiming ownership of cash seized at various places across the country. In fact, the request seeking transfer has been made from two offices of the department ie. PCIT, Mumbai and Kolkata. 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. 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. Having regard to the position of law as discussed above and also the other materials on record, we are of the view that we should not interfere with the impugned order of transfer passed by the respondent in exercise of powers under Section 127(2) of the Act. The power of transfer of cases may have to be exercised in proper case when sufficient materials on record justify such action. As held by this Court in the case of Hindustan M.I. Swaco Limited 2016 (7) TMI 212 - GUJARAT HIGH COURT , this is, however, not to suggest that the transfer of cases for effective investigation and coordination can be resorted to only in cases of assessee, who are subjected to search operation. Such requirement may arise in other circumstances also . The question whether circumstances warrant transfer or not is a matter for consideration and the decision by the Commissioner. The Commissioner in the case on hand upon due consideration of all the relevant aspects of the matter is satisfied that the case of the writ applicant should be transferred for the purpose of effective and coordinated investigation and assessment. Thus, we are of the opinion that looking to facts and circumstances of the case, where administrative exigencies can be adequately/ comprehensively addressed, such a discretion should not be interfered with under Article 226 of the Constitution. We do not find any patent error of law or any error apparent on the face of the record. The impugned order cannot be said to be ex facie perverse.

Issues Involved:
1. Validity of the transfer order under Section 127 of the Income Tax Act, 1961.
2. Adequacy of the opportunity of being heard provided to the writ applicant.
3. Existence of cogent material to justify the transfer of the case for effective and coordinated investigation.

Detailed Analysis:

1. Validity of the Transfer Order under Section 127 of the Income Tax Act, 1961:
The writ applicant challenged the transfer of his case from Ahmedabad to Mumbai under Section 127 of the Income Tax Act, 1961. The court analyzed Section 127, which allows the Principal Director General, Director General, Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner to transfer any case from one or more Assessing Officers to any other Assessing Officer(s) after giving the assessee a reasonable opportunity of being heard and recording the reasons for the transfer.

The court noted that the transfer of cases is permissible for effective and coordinated investigation and assessment. The transfer order was issued due to the centralization of cases related to Shri Gaurav Krishnakant Laddha and others, to facilitate a coordinated investigation. The court upheld the transfer order, noting that it was based on administrative exigencies and was not arbitrary or perverse.

2. Adequacy of the Opportunity of Being Heard Provided to the Writ Applicant:
The writ applicant argued that he was not given a reasonable opportunity to present his case before the transfer order was passed. The court examined the notices issued to the writ applicant, which provided opportunities to lodge objections against the proposed transfer. The first notice dated 04.11.2019 asked the writ applicant to submit objections by 14.11.2019, to which he replied with a one-line objection. Subsequent notices dated 22.09.2020 and 23.09.2020 provided further opportunities for the writ applicant to submit detailed objections, which he did on 28.09.2020.

The court found that the writ applicant was given multiple opportunities to be heard, and his objections were considered before the final transfer order was issued on 30.09.2020. Therefore, the requirement of providing a reasonable opportunity of being heard was duly met.

3. Existence of Cogent Material to Justify the Transfer of the Case:
The principal contention of the writ applicant was the absence of cogent material linking him to the search conducted at Mumbai in the case of Shri Gaurav Laddha and others. The court reviewed the materials on record, which indicated a nexus between the writ applicant and the incriminating materials recovered during the search. The writ applicant was suspected of being involved in dubious transactions and habitually claiming ownership of cash seized at various places across the country.

The court referred to previous judgments, emphasizing that facilitating investigation or coordinated investigation is a substantial ground for transferring a case. The court found that there was sufficient material to establish the writ applicant's involvement in the dubious transactions, justifying the transfer for effective and coordinated investigation and assessment.

Conclusion:
The court concluded that the transfer order under Section 127 was valid, as it was based on sufficient material and followed the due process of law. The writ applicant was provided with a reasonable opportunity of being heard, and the transfer was necessary for effective and coordinated investigation. The writ application was rejected, and the transfer order was upheld.

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