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TMI Blog2022 (5) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2019-20 initiated by respondent no.4. d. Pass any other order(s) as this Hon ble Court may deem fit and more appropriate in order to grant interim relief to the Petitioner; e. Any other and further relief deemed just and proper be granted in the interest of justice; f. To provide for the cost of this petition. 2. The facts giving rise to this writ application may be summarized as under: 2.1 The writ applicant claims to be in the business of trading in vegetables, flowers, fruits, agriculture products etc. It appears that the Deputy Commissioner of Income Tax, Ahmedabad, vide notice dated 04.11.2019 informed the writ applicant that consequent to the search and seizure action undertaken in the case of one Shri Gaurav Krishna Kant Laddha and others on 17.04.2018 under Section 132(1) of the Income Tax Act, 1961 (for short the Act, 1961 ) by the DCIT (Inv.) Mumbai, it was proposed to centralize the case of the writ applicant with the Deputy Commissioner of Income Tax, Central Circle-8(1), Mumbai for the purpose of effective and coordinated investigation and assessment. The writ applicant was called upon to lodge his objections, if any, to such decision to tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one another notice came to be issued by the office of the Principal Commissioner of Income Tax, Ahmedabad, which reads thus: No.AHD/PCIT3/HQ/Cetr n/KS/GKL Group./2020-21 Date23.09.2020 To, Kamlesh Shah C-11, Sarvodaynagar, Nr Sola Railway Crossing, Sola Road, Ghatlodia, Ahmedabad Sir, Sub: Transfer of your case from erstwhile ITO,Ward-4(2)(2), Ahmedabad To DCIT, Central Circle-8(1), Mumbai- in the case of Shri Gaurav Krishnakant Laddha Others to centralize the case of Kamlesh Shah, PAN: AQHPS7700A regarding- ---------------------------------------------------------------- Kindly refer to the above captioned subject. 2. A search and seizure action u/s. 132(1) of the Income Tax Act,1951 was conducted in the Shri Gaurav Krishnakant Laddha Others on 17.04.2018 by DGIT(Inv.), Karnataka Goa further other search seizure in your case along with others was carried out on 07.08.2019 by DGIT(Inv), WB, Sikkim NER, Kolkata respectively. In concurrence between the above two DGITS, it is proposed to centralize your case with the DCIT, Central Circle-8(1), Mumbai under the charge of PCIT(C)-4,Mumbai, for the purpose of effective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax-3, Ahmedabad hereby transfer the following case, the particulars of which are mentioned in column nos. 2 3 of the schedule here under, from the Assessing Officer mentioned in column no. 4 to the Assessing Officer mentioned in column no. 5 working under the charge of Pr. Commissioner of Income Tax mentioned in column no. 6 thereof, due to centralization of case of Shri Gaurav Krishnakant Laddha Shri Kamleshkumar J Prajapati Proprietor Of M/s Kamleshkumar Mahendrakumar Co., keeping in the view the letters of DGIT (Inv), Karnataka Goa bearing no. DGIT (Inv.) /Ble/Tech/14/Cent/2018-19/14 dated 08.10.2018 letter No.F. No.14/Centralization/DG/T(Inv.)/2019-20 dtd 23.07.2020 and Pr. CIT(C)-4 Mumbai's letter No. PCIT (C)-A/Centralis/G K Laddha/201920 19.03.2020 letter No. PCIT(C)-4/Centralis/G K Laddha/2019-20 dated 27.08.2019. This transfer is made for the purpose of effective and coordinated investigation and assessments. :SCHEDULE: Sr.No. Name of the assessee PAN From To Pr. CIT Charge (1) (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fidavit-in-reply filed on behalf of the Revenue. Para 5 to 9 read thus: 5. Without prejudice to the above, following facts may kindly be considered which would justify the order under Section 127 of the Act dated 30.09.2020. A proposal was received from the PCIT Central 4, Mumbai under letter dated 27.09.2019 for centralization of the case of assessee on account of search conducted on 17.4.2018 in cases of Shri G.K. Laddha and Brothers. A. Thereafter, as required under the provisions of law, the assessee was given an opportunity under show-cause dated 4.11.2019. B. In response to the show cause notice the assessee file letter dated 14.11.2019 which reads as under: In this connection I have objection for centralization of my case from ITO ward 4(2)(2) Ahmedabad to DCIT Central Circle (8)(1) Mumbai. Therefore, I am request to your honour that my case is not centralized from Ahmedabad to Mumbai. As can be seen that no other ground /objection was raised by the assessee in his letter dated 14.11.2019. C. A copy of the objection raised by the assessee was forwarded to the Principal CIT, Central Circle 4 Mumbai under letter dated 5.11.2019. D. Mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the petitioner that the order dated 30.09.2020 was not communicated is factually incorrect as the same had received and part of the present petition. 9. It is submitted that as per the settled legal position transfer of case u/s 127 of the Act for the purpose of effective and coordinated investigation and assessment is the sufficient and proper reason. Therefore the contention of the assesse that the order u/s 127 is without any reason is not correct. 7. In such circumstances referred to above, Mr. Bhatt prays that there being no merits in this application, the same may be rejected. ANALYSIS : 8. Having heard the learned counsels appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the writ applicant is entitled to claim any relief in the present writ application. 9. Section 124 of the Act relates to the jurisdiction of the Assessing Officer. Sub-section (1) of Section 124 reads as under : 124(1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year . 12. The section was amended by section 27 of Finance (No. 2) Act, 1967, and Section 127 since then stands as under: (1) The Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, where ever it is possible to do so, and after recording his reasons for doing so, transfer any case from any Income-tax Officer or officers also subordinate to him and the Board may similarly transfer any case from any Income-tax Officer or Income-tax Officers to any other Income-tax Officer or Income-tax Officers. Provided that nothing in this subsection shall be deemed to require any such opportunity to be given where the transfer is from any Income-tax Officer or Income-tax Officers to any other Income-tax Officer or Income-tax Officers and the offices of all such Income- tax Officers are situated in the same city, locality or place: Provided further that where any case has been transferred from any Income-tax officer or Income-tax Officers to two or more Income-tax Officers, the Income-taxers to whom the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned authority to transfer any case of an assessee from one Assessing Officer subordinate to him to any other Assessing Officer or Officers also subordinate to him. Section 124 (1) prescribes the jurisdiction of the assessing Officer in respect of an assessee on given principles and grounds mentioned therein, whereas section 127 is an exception to the aforesaid provision of section 124. Section 124 is a provision defining the jurisdiction in normal circumstances, whereas section 127 can be attracted only in circumstances where the Commissioner or the Central Board of Direct Taxes or the authority competent finds that it is proper to or appropriate to exercise power under the said provision in the interest of revenue and for proper adjudication of the tax liability or collection thereof. Thus, as a sequel of the aforesaid principle, it follows that the transfer of cases can be ordered for facilitating the task of effective investigation and for best and coordinated assessment. 16. Now, this power of the authority is hedged under Section 127(1) by two requirements which are that such order can be passed only after giving the assessee a reasonable opportunity of being hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable when the assessment is being transferred from one Assessing Officer to another Assessing Officer, both being situated in the same city, locality or place. The third important element of Section 127 is when an assessment is being transferred from one Assessing Officer to another Assessing Officer, both of whom are not subordinate to the same head, the same could be done only with the agreement of the respective heads and if there is no such agreement, only by the Board or the authority that the Board may authorise in this behalf, by issuing notification in the official Gazette. This last requirement would ensure that there is no discordance between the heads of the two Assessing Officers from where the assessment is transferred to where it is being transferred and in case there is a disagreement, such powers can be exercised only by the Board or an officer so authorised by the Board. While we are on the requirement of agreement between the two authorities, as referred to in clause(a) of sub-section (2) of Section 127, we may also notice that upon such agreement being achieved, it is the authority from whose jurisdiction the case is to be transferred, has to grant a reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) or sub- section (2) shall be deemed to require giving of any such opportunity where the transfer is from any Assessing Officer to another and offices of all such officers are situated in the same city, locality or place. Sub-section (4) of Section 127 provides that the transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings and shall not render necessary the re-issuance of any notice already issued by the Assessing Officer from whom the case is transferred. 21. Exercise of power under sub-section (1) and subsection (2) of the Act comes with certain procedural requirements namely, of granting a reasonable opportunity of being heard in the matter wherever it is possible to do so, of recording of reasons for passing such order and as provided by the Supreme Court in Ajanta Industries (supra) communicating such reasons also to the assessee. Subject to fulfillment of such procedural requirements, the authority under Section 127 enjoys considerable discretion while exercising the power contained in sub-section (1) or sub- section (2) thereof. Such discretion of course has to be exercised for achieving the public purpose and not fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestments (P.) Ltd. v. Chief CIT [1991] 187 ITR 405 and further held thus: Apart from the Delhi and Allahabad High Courts, the Gauhati High Court in the case of Assam Surgical Co. v. CBDT [1984] 145 ITR 400 , the Rajasthan High Court in the case of Shri Rishikul Vidyapeeth v. Union of India [1982] 136 ITR 139 and the Calcutta High Court in the case of Dwarka Prasad Agarwalla v. Director of Inspection [1982] 137 ITR 456 have held that facility of investigation or coordinated investigation is a substantial ground for transfer from one officer to another officer. 19. So far as exercise of discretionary powers of the authority to transfer cases is concerned, a Division bench of the Bombay High Court, in the case of Aamby Valley Ltd. vs. Commissioner of Income-tax, reported in (2014) 41 taxmann.com 15 (Bombay), held as under : 8. We have considered the submissions. The power to transfer cases under Section 127 of the Act is to be undoubtedly exercised after following the principles of natural justice. However, the discretion of the authority to transfer a case has to be examined on the touchstone of the same not being arbitrary and/or perverse and/or mala fide. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant observations reads thus : It follows, therefore, that Section 5(7A) of the Act is not violative of Article 14 of the Constitution and also does not impose any unreasonable restriction on the fundamental right to carry on trade or business enshrined in Article 19(1)(g) of the Constitution. If there is any abuse of power it can be remedied by appropriate action either under Article 226 or under Article 32 of the Constitution and what can be struck down is not the provision contained in Section 5(7A) of the Act but the order passed thereunder which may be mala fide or violative of these fundamental rights. This challenge of the vires of Section 5(7A) of the Act, therefore, fails. 22. In light of the aforesaid judicial pronouncements, 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 claimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 In view of the above facts, the objection raised by the assessee against the proposal for PAN migration hereby stands rejected. 23. We may only observe that 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. 24. The learned counsel appearing for the writ applicant placed strong reliance on a decision of this High Court in the case of Anuben Lalabhai Bharwad Vs. Principal Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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