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TMI Blog2024 (1) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... nd thereafter only, the impugned order has been passed. This by itself gives a clear picture of the petitioner being given reasonable opportunity of hearing. As regards the second rider of reasons being provided in the impugned order, the authorities concerned while passing the impugned order, have considered the objections raised by the petitioner, as would be evident from the contents of paragraphs 3, 3.1 and 4. The reason which necessitated the authorities to pass the impugned order is to have a coordinated investigation. The instant Writ Petition is the one which has been filed on 22.12.2023, whereas the impugned order under Section 127 of the Act was passed about one moth back i.e., on 20.11.2023. The consequential proceedings subsequent to the matter being transferred to respondent No. 4 also had begun, as would be evidence from the notice dated 30.11.2023 issued under Subsection (1) of Section 142 of the Act. Also in the consequential notice u/ss (1) of Section 142 of the Act, there is a clear elaboration of cash transactions between the petitioner s establishment with M/s. IRIS Group. To make the things bad, there is a statement of Accountant, who in the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Aggrieved by the order dated 20.11.2023 passed by respondent No. 1 under Section 127 of the Income Tax Act, 1961 (for short, the Act) and the consequential notice dated 30.11.2023 issued by respondent No. 3 under Sub-section (1) of Section 142 of the Act, the present Writ Petition has been filed. 3. Vide the impugned order dated 20.11.2023, respondent No. 1 in a proceeding under Section 127 of the Act, transferred the case of the petitioner from the jurisdiction of The Income Tax Officer, Ward 4(1), Hyderabad (respondent No. 2 herein) to the jurisdiction of The Deputy Commissioner of Income Tax, Central Circle 4(4), Mumbai (respondent No. 4 herein). Upon the matter being transferred, as a consequence, respondent No. 4 issued the notice dated 30.11.2023 under Sub-section (1) of Section 142 of the Act to the petitioner, which led to filing of the instant Writ Petition. 4. The brief facts in nutshell are that the petitioner-assessee is a private limited company engaged in the business of Information Technology and Information Technology Enabled Services. That search and seizure proceedings under the provisions of the Act were drawn against a company named M/s. Sumaya Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 3 which again is not proper, legal and justified as it was incumbent upon respondent No. 1 to have thoroughly scrutinized the request for transfer by taking the entire pros and cons into consideration before passing the impugned order under Section 127 of the Act. It was also his contention that there were no valid and justifiable grounds available with respondent No. 1 to transfer the case from the jurisdiction of respondent No. 2 to the jurisdiction of respondent No. 4, particularly for the reason that no search and seizure proceedings were conducted at the premises of the petitioner s establishment. That at the same time, the impugned order seems to have been passed with an impression that search and seizure proceedings were conducted at the premises of the petitioner s establishment. Therefore, the impugned order and the consequential notice both need to be interfered with. 9. Learned Senior Counsel further contended that the only reason for the transfer of the petitioner s case from the jurisdiction of respondent No. 2 to the jurisdiction of respondent No. 4 was the so called commercial transactions that the petitioner had with M/s. IRIS Group. However, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer or Income tax Officers : Provided that nothing in this sub-section 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-tax Officers to whom the case is so transferred shall have concurrent jurisdiction over the case and shall perform such functions in relation to the said case as the Board or the Commissioner (or any Inspecting Assistant Commissioner authorised by the Commissioner in this behalf) may, by general or special order in writing, specify, for the distribution and allocation of the work to be performed. (2) The transfer of a case under sub-section (1) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Income-tax Officer or Income-tax Officers from whom the case is transferred. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.12.2023, whereas the impugned order under Section 127 of the Act was passed about one moth back i.e., on 20.11.2023. The consequential proceedings subsequent to the matter being transferred to respondent No. 4 also had begun, as would be evidence from the notice dated 30.11.2023 issued under Subsection (1) of Section 142 of the Act. 17. Another crucial aspect which needs to be appreciated is that in the consequential notice under Sub-section (1) of Section 142 of the Act, there is a clear elaboration of cash transactions between the petitioner s establishment with M/s. IRIS Group. To make the things bad, there is a statement of Accountant namely Sri Chennu Venkata Raghavendra, who in the course of survey, has not been able to give proper and satisfactory explanation and also did not provide cogent material in respect of so called commercial transactions done between the petitioner s establishment with M/s. IRIS Group. There was also no sufficient supporting documentary evidence with the petitioner s establishment or with their officials at the time of survey to establish that the said transactions were genuine and they were done strictly in accordance with the provisions of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty. 22. So also, in the case of Hindusthan M-I Swaco Ltd. (supra), a Division Bench of High Court of Gujrat held as under: 15. In the said decision thus, while recognizing wide discretionary powers of the competent Revenue Authorities to transfer assessment cases under section 127 of the Act in public interest, the Court also recognized a degree of prejudice or inconvenience that may be caused to the assessee whose assessment may be lifted from his principal place of business and may be put at the disposal of an assessing authority who may be situated at another place far away from the assessee's place of business. The power of transfer of cases therefore, would have to be exercised in proper cases when sufficient material on record justify such action. This is, however, not to suggest that transfer of cases for effective investigation and coordination can be resorted to only in cases assesses who are subjected to search operations. This requirement may arise in other circumstances also. However, the sufficiency of reasons would have to be judged from case to case basis. 23. Similarly, in the case of Shree Ram Vessel Scrap P. Ltd. Vs. Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cause considerable inconvenience to an assessee. Therefore, even though an assessee may not have a vested right to insist that his assessment be completed only at one place or by a particular Assessing Officer, nevertheless, the reasons for transfer must be weighty enough to off-set against such personal inconvenience of an assessee. In exercise of power under section 127 thus we are concerned with larger public interest on one hand and personal inconvenience on the other. However, as long as such powers are exercised bona fide, for public purpose and in the interest of Revenue, the role of the Court to dissect such reasons and to come to a different conclusion would be extremely limited. It is by now well settled that judicial review against the administrative order in exercise of writ jurisdiction, the Court is concerned with the decision making process and not the final decision itself. Unless the reasons which prompted the competent authority to transfer the case can be stated to be wholly irrelevant or arbitrary, the Court would not interfere with such reasons. Of-course an order of such nature can and need to be quashed if it is demonstrated that same is passed either with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that the petitioner was indeed heard before passing the impugned order. Finally, what needs to be looked into is whether the reasons have also been given in the order of transfer or not. 28. Paragraph No. 4 of the impugned order read with paragraph Nos. 3 and 3.1 would clearly speak of the reason which necessitated the authorities to pass the impugned order is centralized and coordinated investigation. 29. Very recently in the case of Kamal Nath Vs. The Principal Commissioner of Income Tax, Kolkata and Others W.P.A.No. 3868 of 2022, dated 06.01.2023, dealing with the similar issue, the High Court at Calcutta held as under. 22. The purpose of a transfer order under Section 127 is not to subject an assessee to tax liability. Its effect is only to subject an assessee to assessment under another jurisdictional officer. Therefore, such an order involves balancing of the inconvenience to the petitioner and revenue interests (public interest), which should tilt towards the latter if there is some nexus derivable from facts and not mere pleas based on conjecture. 23. The principles that emerge from a reading of the judgments above are as follows: A. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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