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TMI Blog2006 (2) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... se in order to appreciate the dispute between the parties and the legal issues to be decided by this court. M/s. Trimurti Fragrances P. Ltd. (called "the petitioner"), is the firm operating from Kanpur, and assessed at Kanpur and engaged in manufacturing and selling tobacco production, popularly known as gutkha under brand name of "Shikhar Gutkha". There are other firms and individuals who are also dealing with the said brand-product and operating from Kanpur. Pradeep Kumar Agrawal, who is one of the partners of M/s. Vijay Kumar Pradeep Kumar (petitioner of Writ Petition No. 756 of 2005) admittedly has its factory/office and residence at Delhi. The said Pradeep Kumar is also a director in M/s. Trimurti Fragrances P. Limited, the petitioner in the present case. A search and seizure operation under section 132(1), Income-tax Act (for short "the Act"), was conducted both at Kanpur and Delhi on July 2, 2003, at the sites belonging to the petitioners of the group of writ petitions, (viz., (1) W.P. No. 755/2005: Virendra Kumar Jain v. CIT; W.P. No. 756 of 2005 Vijay Kumar Pradeep Kumar v. CIT [2006] 283 ITR 541 (All); (2) W.P. No. 55 of 2006 R.K. Agarwal v. CIT; W.P. No. 56 of 2005; N. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of the petitioner from the Assessing Officer at Kanpur to the Assessing Officer, New Delhi; the relevant portion of which reads: "In exercise of the power conferred by sub-section (2) of section 127 of the Income-tax Act, 1961, and all other powers enabling me in this behalf, I, the Commissioner of Income-tax-II, Kanpur, hereby transfer the case, particulars of which are mentioned in columns (1) to (4) of the Schedule appended below, for co-ordinated investigation (other cases of this group already centralised by the learned Commissioner of Income-tax-I, Kanpur, with the Deputy Commissioner of Income-tax, Central Circle-9, New Delhi, vide his order dated January 23, 2004) from the Assessing Officer mentioned in column (5) to the Assessing Officer mentioned in column (6) thereof." Being aggrieved, M/s. Trimurti Fragrances P. Ltd. has filed the above petition contending, inter alia, amongst others, that the petitioner company has no concern with the firm known as "Vijai Kumar Gauri Shankar" except that its director, Pradeep Kumar Agrawal also happens to be a partner of the firm "M/s. Vijay Kumar Gauri Shankar"; that the petitioner company had opened a section of it in Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, New Delhi), and the case of the petitioner/ M/s. Trimurti Fragrances P. Limited also needed to be centralised with the said assessing authority at Delhi for co-ordinated investigation. In the last, vide para. 24 of the counter affidavit it is pleaded that Shri Ganesh Chaudhary, FCA, attended the hearing on February 20, 2004, who filed written submissions before the Commissioner of Income-tax-II, Kanpur, and hence proper opportunity of hearing was afforded to the assessee. A rejoinder affidavit has also been filed reiterating the facts already mentioned in the petition and contended that Ganesh Chaudhary, FCA, was not in the full knowledge of facts of the case hence reasonable opportunity was not afforded. The salient features of the aforementioned cases are that the partners, directors and individuals whose cases are the subject matter of assessment are closely related or otherwise having close business relation indulging in commercial transaction having cross entries. It is also not disputed that one of them, Pradeep Kumar Agrawal admittedly has his factory and residence at Delhi. Shri Ravi Kant, senior advocate, referred to the impugned order dated February 22, 2005, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessed in another area whether situated within the State or without it called 'Y'. The considerations which will weigh with the Commissioner of Income-tax or the Central Board of Revenue in transferring the cases of such asses-sees either to the area 'X' or the area 'Y' will depend upon the particular circumstances of each case and no hard and fast rule can be laid down for determining whether the particular case should be transferred at all or to an Income-tax Officer of a particular area. Such discretion would necessarily have to be vested in the authority concerned and merely because the case of a particular assessee is transferred from the Income-tax Officer of an area within which he resides or carries on business to another Income-tax Officer whether within or without the State will not by itself be sufficient to characterize the exercise of the discretion as discriminatory. Even if there is a possibility of discriminatory treatment of persons falling within the same group or category, such possibility cannot necessarily invalidate the piece of legislation. 29. It may also be remembered that this power is vested not in minor officials but in top-ranking authorities like the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferring the case of such assessee to the Income-tax Officer who is nearest to the area where it would be convenient for the assessee to attend and if, on account of administrative exigencies this is not possible and the assessee requests that the examination of accounts or evidence to be taken should be in a place convenient to him, by the Income-tax Officer complying with the request of the assessee and holding the hearing at the place requested. We are bound to take this statement contained in para. 5 of the affidavit of Shri V. Gouri Shankar at its face value and if this is done as it should be, the assessee will not be put to any inconvenience or harassment and the proper balance between the rights of the subject and public interest will be preserved. 33. It is, therefore, clear that the power which is vested in the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, under section 5(7A) of the Act is not a naked and arbitrary power unfettered, unguided or uncontrolled so as to enable the authority to pick and choose one assessee out of those similarly circumstanced thus subjecting him to discriminatory treatment as compared with others who fall wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be unreasonable or arbitrary. In the case of Bhatia Minerals [1993] 200 ITR 591 this court categorically referred to the decisions of the Andhra Pradesh High Court reported in Vijayasanthi Investments P. Ltd. v. Chief CIT [1991] 187 ITR 405 and Saptagiri Enterprises v. CIT [1991] 189 ITR 705 another view taken by the Madhya Pradesh High Court in the case of Sagarmal Spinning and Weaving Mills Ltd. v. CBDT [1972] 83 ITR 130. Thus by taking a contrary view in the case of Maheshwari Lime Works v. CIT [1984] 147 ITR 804 (MP). It is also the court also noted that the Delhi High Court (sic) had also taken a view in consonance with the view taken by the Allahabad High Court in the case of Peacock Chemicals P. Ltd. [1990] 182 ITR 98. Reference may also be made to the Division Bench of this court in the case of Mahesh Chand Vishan Swarup v. CIT [1991] 187 ITR 177, wherein this court observed "We must emphasise that the ground of transfer is ensuring of proper and co-ordinated investigation. That ground was clearly stated in the show-cause notice" and on that basis dismissed the writ petition filed by the assessee. Learned counsel on behalf of the petitioners, attempted to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... text should be in a given case must depend to a great extent on the fact and circumstances ... Para. 23: "As was observed by this court we need not go into 'useless formality theory' in detail; in view of the fact that no prejudice has been shown. As is rightly pointed out by learned counsel for the appellants, unless failure of justice is occasioned or that it would not be in public interest to dismiss a petition on the fact situation of a case, this court may refuse to exercise the said jurisdiction (see Gadde Venkateswara Rao v. Govt. of A.P., AIR 1966 SC 828). It is to be noted that legal formulations cannot be divorced from the fact situation of the case. Personal hearing was granted by the appellate authority, though not statutorily prescribed. In a given case post-decisional hearing can obliterate the procedural deficiency of a pre-decisional hearing (see Charan Lal Sahu v. Union of India [1990] 1 SCC 613; AIR 1990 SC 1480". In the instant case admittedly notice was given. The petitioner had submitted his reply taking the plea of inconvenience in particular and thereafter, the impugned order dated February 22, 2005/annexure 3 to the writ petition has been passed wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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