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TMI Blog2006 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... the Deputy Commissioner of Income-tax, Central Circle 22, Mumbai, under the Commissioner of Income-tax, Central, Mumbai. 2. Petitioner No. 1 is a private limited company incorporated in the State of West Bengal. The petitioner has had its registered office in Kolkata, ever since its incorporation in 1988. Petitioner No. 1 is engaged in the business of real estate development and has since its inception been assessed to tax at Kolkata, where its registered office is situate. 3. Petitioner No. 2, it is claimed, is a director and shareholder of petitioner No. 1 and carries on business through the agency and/or instrumentality of petitioner No. 1. 4. The board of directors of petitioner No. 1 comprise four directors, including petitioner No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posal for transfer. 10. In the objections, the petitioners specifically pointed out that the registered office of the petitioner-company was at Kolkata, all of its directors were assessed to tax at Kolkata and the company had no business activity anywhere in Maharashtra, nor any business connection or financial transaction with Pioneer Embroideries Ltd., or any its group of companies and/or sister concerns. The petitioners also pointed out that the petitioner had only been a non-executive director of Pioneer Embroideries Ltd., and that apart from petitioner No. 2, no other director ever had any connection with Pioneer Embroideries Ltd., or any of its group companies. 11. Petitioner No. 2, in his objection, pointed out that he had since 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiles Ltd., to the Deputy Commissioner of Income- tax, Central, Circle-22, Mumbai. As regards the cases of P. S. Housing Finance P. Ltd., and Sri Surendra Kumar Dugar, this transfer was proposed on the ground that none of the two has any business connection with Pioneer Embroideries group and Baid group, which were searched by the investigation Wing at Mumbai. The matter was considered by me. It may be mentioned that the Chief Commissioner of Income-tax, Central-II, Mumbai, informed me that these cases were proposed to be centralised at Mumbai for the following reasons :- ' Shri Surendra Dugar-Shri Surendra Dugar is a director of M/s. PEL and during the course of search action at his residential premises at Kolkata his statement w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed income of Rs. 3,70,000 on account of sale proceeds of 500 grams of gold which had not been recorded in his books of account. 18. The affidavit-in-opposition does not disclose any prima facie finding of nexus of the petitioner-company with Pioneer Embroideries Ltd. So far as petitioner No. 2 is concerned the only nexus is that records impounded reveal that he had been a director of the Mumbai company. 19. Mr. J. P. Khaitan appearing on behalf of the petitioner submitted and, in my view, rightly that no business connection between petitioner No. 1 and Pioneer Embroideries Ltd., had been established, even prima facie. 20. As rightly pointed out by Mr. Khaitan, there is no finding, even prima facie, of the undisclosed income of petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore making an order of transfer the Legislature had imposed the requirement of a show-cause notice as also recording of reasons. The recording of reasons is essential to enable opportunity to the assessee to approach the High Court under its writ jurisdiction under article 226 of the Constitution of India. 25. When an order of transfer under section 127 is passed notwithstanding objection thereto, the order is required to deal with the grounds of objection to the transfer as held by the Punjab and Haryana High Court in the case of Rajesh Mahajan v. CIT [2002] 257 ITR 577 also cited by Mr.Khaitan. Mr. Khaitan also cited the common judgment of a Division Bench of the Allahabad High Court in the case of R. K. Agarwal v. CIT [2006] 283 ITR 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lationship with Pioneer Embroideries Limited or any of its sister concerns, there could be no question of transferring the case of the petitioners to Mumbai. 30. There can, however, be no doubt that the Income-tax authorities might continue with the investigation, if any, against each of the petitioners. 31. The impugned order is set aside and quashed. 32. This order will, however, not prevent the respondent authorities from issuing a fresh order of transfer under section 127 of the Income-tax Act, 1961, transferring the case of petitioner No. 2 to Mumbai in the event any real nexus is found between any articles or documents found in the residence of petitioner No. 2 and Pioneer Embroideries Ltd., or any of its sister concerns. 33. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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