9911796707
TMI Blog2017 (5) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order under Section 143(3) read with Section 147 of the IT Act also. By way of draft amendment the petitioner has also sought to challenge the order dated 20.10.2016 (AnnexureR1) passed by the Principal Director of Income Tax (Investigation) granting the approval of the proposal madd by the DGIT (Investigation), Ahmedabad and to transfer the case under Section 127 of the IT Act. [1.1] Having heard learned Counsel appearing on behalf of the respective parties and considering the fact that in the original petition what is challenged is the order of transfer of the proceedings from one Assessing Officer to another Assessing Officer, passed in exercise of powers under Section 127 of the IT Act and by permitting the petitioner to challenge the subsequent assessment order passed under Section 143(3) read with Section 147 of the IT Act, the entire cause of action and even the grounds is likely to be changed and therefore, the draft amendment insofar as challenge to the order of assessment dated 29.12.2016 passed under Section 143(3) read with Section 147 of the IT Act is hereby rejected. However, liberty is reserved in favour of the petitioner to challenge the same before appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o respondent No.3 - Principal Commissioner of Income Tax - 1, Rajkot to supply him the copy of the transfer order. That thereafter the respondent No.1 supplied the reasons recorded to reopen the assessment vide letter dated 14.12.2016. That the petitioner raised the objections against the reasons recorded to reopen the assessment vide objections dated 19.12.2016. That vide communication / order dated 20.12.2016, the respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, rejected the objections raised by the petitioner. That thereafter the petitioner has preferred the present Special Civil Application challenging the impugned transfer order under Section 127(2)(a) read with Section 127(3) of the IT Act and the consequential proceedings vide notice dated 11.11.2016 by which the assessment proceedings are transferred from the office of respondent No.2 - Assistant Commissioner of Income Tax, Circle2, Rajkot to the office of respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, Rajkot. [3.0] Shri S.N. Soparkar, learned Senior Advocate has appeared on behalf of the petitioner - assessee, Mrs. Mauna Bhatt, learned Advocate has appeared on behalf of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner from respondent No.2 to respondent No.1 suffers from nonapplication of mind. It is submitted that even the order of transfer cannot be said to be reasoned order. It is submitted that any reasoned order must reflect the application of mind as there is a subjective satisfaction. In support of his above submissions, he has heavily relied upon the decision of this Court in the case of Anuben Lalabhai Bharwad vs. Principal Commissioner of Incometax3 reported in (2016) 72 Taxmann.com 178 (Gujarat). Making above submissions and relying upon following decisions, Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner has requested to allow the present petition and quash and set aside the order of transfer passed under Section 127 of the IT Act by which the assessment proceedings came to be transferred from the office of respondent No.2 to the office of respondent No.1. 1. Ajantha Industries vs. Central Board of Direct Taxes (1976) 102 ITR 281 (SC) 2. Anuben Lalabhai Bharwad vs. Principal Commissioner of Incometax3 (2016) 72 Taxmann.com 178 (Gujarat) 3. Ramswaroop S/o. Parasram Mundra & Ors. vs. Commissioner of Income TaxII, Nagpur 2016 (388) ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Intelligence & Criminal Investigation) carried out thorough investigation in respect of certain brokers who were indulged in the practice of transfering fictitious profit and loss by misusing the client cod modification facility in F&O segment on NSE during March 2010, to different client / beneficiaries, according to their requirements to enhance or reduce the tax liability. That the Directorate obtained client code modification (CCM) data for AY 200910 from NSE and mapping was done of such data to ascertain the exact amount of fictitious profits / losses in each case. It is submitted that investigation, analysis and verification revealed that one of the major tools used for systematic tax evasion is client code modification (CCM). That a search in the case of Amrapali Group of Ahmedabad was conducted on 26.10.2010. Detailed analysis of the client codes modified by ACFL (a group entity involved in broking) was carried out and it was found that CCM was used as a tool so as to systematically shift profits and losses. On further analysis of the accounts and return of income of the persons whose codes were modified, it was found that without exception the persons who h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed losses through Client Code Modification. As per the said communication, the case of the petitioner was to be centralized with one officer of Central Circle at Rajkot itself. Therefore, the case was to be transferred from one office to another office at the same station. It is submitted that therefore, the case of the assessee was being transferred from one office to another office in the same station and therefore, there was no requirement to give opportunity to the petitioner and seek his objection considering section 127(3) of the IT Act. Therefore, the respondent No.3 proceeded to transfer the case of the petitioner as per the provisions of the law. It is submitted that as such through clerical oversightness, copy of the transfer order could not be marked to the petitioner. It is submitted that however no prejudice was meted upon the petitioner because, immediate upon passing of the order under Section 127 (order of centralization), the respondent No.1 intimated to the petitioner to file details in connection with his assessment proceedings and therefore, infact he has come to know about centralization of his case through the respondent No.1. It is therefore submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same city. Therefore, in such a situation whether while passing the order under Section 127 of the IT Act, the reasons are required to be recorded or not came to be considered by the Hon'ble Supreme Court in the case of Kashiram Aggarwalla (Supra). In the said decision the Hon'ble Supreme Court also considered its earlier decision in the case of Pannalal Binjraj vs. Union of India [(1957) 31 ITR 565]. In the aforesaid decision, considering the provisions of section 127 of the IT Act, it is observed that when the case is transferred from one Officer to another Officer in the same city / station, neither any opportunity is required to be given nor the same can be set aside for the want of reasons recorded in the order of transfer. It is further observed that the order of transfer of the case from one Officer to another Officer is purely in the nature of an administrative order passed for considerations of convenience of the department and no possible prejudice can be involved in such a transfer. In the aforesaid decision the Hon'ble Supreme Court has observed and held as under: "There is another consideration which is also relevant. Section 124 of the Act deals with the jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etax Officer to another. Such transfer may be made at any stage of the proceedings, and shall not render necessary the areissue of any notice already issued by the Incometax Officer from whom the case is transferred. The argument which was urged before this Court in challenging the validity of this provision was that it infringed the citizens' fundamental rights conferred by Articles 14 and 19(1)(g) of the Constitution. In support of this argument, reliance was placed on the fact that section 64(1) and (2) conferred a right on the assessee to have his tax matter adjudicated upon by the respective officers mentioned in the said provisions; and since section 5(7A) authorised the transfer of the assessee's case from one Incometax Officer to another, that involved infringement of his fundamental rights guaranteed by Articles 14 and 19(1)(g) read with section 64(1) & (2). It is necessary to emphasise that section 5(7A) authorised transfer of incometax cases from one officer to another not necessarily within the same place. In other words, the transfer authorised by section 5(7A) would take the case from the jurisdiction of an officer entitled to try it under section 64(1) & (2) to anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven to falling under it. On the other hand, if the obvious object proviso is taken into account and the relevant previous ound is borne in mind, it would also seem reasonable to that in regard to cases falling under the proviso, an opportneed not be given to the assessee, and the consequential to record reasons for the transfer is also unnecessary, and view is plainly consistent with the scheme of the provision and true intent of its requirements. We would accordingly hold the impugned orders cannot be challenged on the ground that Board has not recorded reasons in directing the transfer of the pending against the assessee from one Incometax Officer other in the same locality." [7.3] Now, considering the impugned order it appears that even the reasons are recorded to transfer the case of the petitioner from respondent No.2 to respondent No.1 i.e. for "coordinated investigation". Proposal was made by DGIT (Investigation), Ahmedabad for centralization of 234 cases of the beneficiaries who have taken contrived losses through Client Code Modification at their respective places of assessment (without change of location) with one officer of Central charge of respective station. The sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
