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TMI Blog2019 (5) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... o more open to the petitioner to cite the lack of reasons in the show-cause notice as a ground for assailing the impugned order. In fact, our experience shows that different jurisdictional authorities, different benches of the Tribunal and even different High Courts take different views on certain complicated issues. Therefore, when multiple parties located at different places coming under different jurisdictional Officers are involved in an investigation, there is nothing wrong in the competitive authority taking a decision to centralize the assessment of all the parties. In a nutshell, this is described as coordinated and effective investigation and hence the allegation that the same is a bald and vague statement, cannot be accepted. An Assessee who faces no hardship in shifting their registered office to another State just for the purpose of bagging contracts in that State also, cannot plead that the centralization and transfer for the purpose of coordinated and effective investigation would cause hardship to them. If huge infrastructure projects can be undertaken by the petitioner in various States without causing financial, managerial and logistic stress, they cannot p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered office of the petitioner was shifted from Hyderabad to Pune on 26.03.1998. 4. According to the petitioner, they are carrying on the business of execution of infrastructure works in various regions of the Country and their registered office is at Pune. According to the petitioner, they located their registered office in the State of Maharashtra only for the purpose of becoming eligible to bid for infrastructure projects in the State of Maharashtra, as mandated by the local State Government, but their Corporate Office continued to be in Hyderabad. It is the case of the petitioner that they just have six employees in the registered office at Pune out of whom, two are Site Accounts Managers, one is a Material Manager, another a Regional H.R. Manager and the remaining two take care of filing Tenders. In contrast, the petitioner has 80 employees in their Corporate Office at Hyderabad. 5. Ever since the Assessment Year 1998-99, all the Income Tax Assessments have been completed only in Hyderabad. It appears that there was a search conducted in the offices of the petitioner in January, 2013 and the jurisdiction was centralized at Hyderabad temporaril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( g) that investigation revealed that ABIL Group of entities did not execute any infrastructure projects, as they did not possess the domain expertise; ( h) that Shri Avinash Bhosale, founder and promoter of ABIL Group of entities was holding approximately 13% of the equity shares of the petitioner till 2007-08 and thereafter he became the joint Managing Director of the petitioner till 2010; ( i) that his son, Amit Bhosale was also a Director of the petitioner till 2013; and ( j) that the members of the same family which hold shares of the petitioner, are also the partners in M/s. Maganti Constructions. 8. It appears that a search action was undertaken under Section 132 of the Act, 1961, on 24.07.2017 at Pune in the premises of one Avinash Bhosale and others and in the offices of some companies, viz., ABIL Infra Projects Limited and M/s. Splendor Developers Private Limited. According to the petitioner, the search conducted at Pune on 24.07.2017 did not lead to any incriminating material found against the petitioner. According to the petitioner, the proportion of the work entrusted to ABIL Group from out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge; that after the completion of the investigation, the petitioner can always seek re-transfer of his file to the jurisdictional Commissioner. 11. In response to the averments contained in the counter affidavit, the petitioner has filed a rejoinder. The rejoinder primarily seeks to answer the allegations of; (i) suppression of material facts; (ii) requirement under the Income Tax Act, 1961 to maintain the books of accounts in the place where the registered office of the company is situate; (iii) inflation of expenses; (iv) stripping off profits; and (v) the probable delay in completion of investigation if multiple authorities are involved; 12. We have carefully recorded the pleadings as well as the contentions raised on both sides. We do not think that it is necessary to shift our focus to certain ancillary contentions, such as suppression of material facts, inflation of expenses, requirement under the 1961 Act to maintain the books of accounts in the place where the registered office is located etc. The main focus in the case on hand should only be on the scope of Section 127 of the Act, 1961 vis- -vis the jurisdiction of this Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. However, the contention of Dr. C.P. Ramaswami, learned counsel for the petitioner is that the show-cause notice did not indicate any reason. The show-cause notice, dated 21.11.2017, merely stated that the petitioner may file their objections against the centralization of their case. No reasons were indicated in the show-cause notice, dated 21.11.2107. 16. But, it is not as though the petitioner did not understand the reasons behind the show-cause notice. Though the show-cause notice merely called upon the petitioner to file their objections on the proposal for centralization, without furnishing any reasons, the petitioner gave a very detailed reply on 06.07.2017 objecting to the proposal and even explaining the background in which the proposal had emanated. It is needless to point out that the object of providing reasons in the show-cause notice is to enable the Noticee to formulate their objections point-wise. But, in cases where the noticee had understood the reasons and given an elaborate response, the objection relating to lack of reasons pales into insignificance. 17. We may also look at it from another angle. If the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and effective investigation and hence the allegation that the same is a bald and vague statement, cannot be accepted. 21. The last ground of attack to the impugned order is that when no incriminating material against the petitioner was found in the search conducted in ABIL Group of Companies in July, 2017, it is not fair to order centralization at Mumbai, especially when the Corporate office of the petitioner is in Hyderabad, and such centralization to Mumbai would cause serious financial, managerial and logistic stress. 22. It is true that centralization and transfer would result in some kind of hardship to every Assessee. But, the hardship is unavoidable. The only safeguard statutorily provided against such transfers is that there should be reasons recorded and that the transfer must be preceded by an opportunity of hearing. Once the statutory requirements are complied with, the question of hardship cannot take the front seat. 23. In any case, we do not think that this argument is available to the petitioner. Even as per the affidavit filed by the petitioner (paragraph No.3 of the affidavit), they originally had their registered of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at cse, neither in the show-cause notice nor in the order for transfer, were any reasons recorded or communicated. It was only in the counter-affidavit that reasons were sought to be mentioned. In other words, the so-called facility of detailed and coordinated investigation did not find place in the showcause notice and in the impugned order and the same was not even supported by any material. But, in the case on hand, the requirements for coordinated and effective investigation are justified by various facts mentioned in the impugned order. They include the back to back contracts, the share holding pattern etc. Therefore, the petitioner cannot pick up one statement in the impugned order that summarized the position and attack the same as bald and vague. 28. In the next decision in Saptagiri Enterprises v. Commissioner of Income-Tax and others relied upon by Dr. C.P. Ramaswami, learned counsel for the petitioner, this Court followed the decision in Vijayasanthi Investments Private Limited and held that the phraseology coordinated investigation would not convey any intelligible reason, from the Assessee s point of view. 29. But, as we have pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 3,193.93 - - - - 2012-13 3,916.48 20.87 - 20.87 0.53% 2013-14 2,113.98 204.52 54.22 258.74 12.24% 2014-15 1,345.80 87.48 9.49 96.97 7.21% 2015-16 1,499.46 21.42 34.11 55.53 3.70% 2016-17 2,014.81 23.58 31.33 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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