Allahabad High Court
M/S Rnb International Pvt. Ltd. ... vs Principal Commissioner Of Income ... on 26 October, 2017
Bench: Abhinava Upadhya, Ashok Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Court No. - 4
Case :- WRIT TAX No. - 712 of 2017
Petitioner :- M/S RNB International Pvt. Ltd. Thru' Its Director
Respondent :- Principal Commissioner Of Income Tax & 5 Others
Counsel for Petitioner :- Shambhu Chopra
Counsel for Respondent :- S.S.C.,Gaurav Mahajan
Hon'ble Abhinava Upadhya,J.
Hon'ble Ashok Kumar,J.
By means of this writ petition the petitioner has challenged the order passed under Section 127 of the Income Tax Act, 1961 transferring the case of the petitioner before the ACIT, Central Circle Bikaner.
The facts of the case are that a search and seizure operation under Section 132 of the Income Tax Act was carried out on 20.04.2017 in the premises of the petitioner M/s Bajaj Group, Bikaner. For the purpose of centralisation and meaningful assessment of all the cases of Bajaj Group, Bikaner. A notice was issued to the petitioner on 8th June, 2017 requiring the petitioner to file his objection with regard to the centralisation of the case before the ACIT, Bikaner and present himself in the office on or before 28.06.2017.
It appears that the petitioner instead of appearing before the authority concerned sent a letter on 12.06.2017 and requested the transfer of his cases to Central Circle New Delhi and not to Central Circle Bikaner. The Commissioner of Income Tax, Noida while giving reasons for transfer of cases to ACIT, Bikaner, passed an order dated 29.06.2017 transferring the same for admininstrative convenience which has been assailed by means of this writ petition.
According to the learned counsel for the petitioner the necessary requirement under Section 127(1) is that before passing an order of transfer the assessee is to be given an opportunity to file his objection and also for personal hearing. Sri Shambhu Chopra, learned counsel for the petitioner submits that although the notice dated 08.06.2017 recites that the petitioner may file his objection and present himself before the authority concerned on or before 28.06.2017 but the petitioner wrote a letter on 27.06.2017 asking for personal hearing and a letter dated 12.06.2017 by which it has again requested that the matter be transferred to Central Circle, Delhi instead of Central Circle Bikaner.
Learned counsel for the petitioner therefore submits that the order has been passed without giving an opportunity especially the opportunity of being heard and has relied upon the decision of the Bombay High Court reported in 352 ITR page 53 Bombay Shikshana Prasaraka Mandali Vs. CIT & Others as well as he has relied upon the case of Lala Bhai Kama Bhai Vs. Principal Commissioner of Income Tax (2016) 72 Taxman to assert that actual hearing is a pre condition of passing an order under Section 127 and has also relied upon the decision of this Court in the case of Sri Harbhajan Singh Chadha Vs. Deputy Commissioner Income Tax & 3 Others passing Writ Tax No. 70 of 2014 dated 30.08.2016 wherein also it has been categorically held that the order of transfer can be passed only after giving assessee a reasonable opportunity of hearing where it is possible to do so for the said purpose.
We have considered the submission of the learned counsel for the assessee and Sri Gaurav Mahajan, learned counsel for the revenue.
For ready reference Section 127 is quoted herein below:-
"127. (1) The [Principal Director General or] Director General or [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner 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, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him.
(2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same [Principal Director or General or] Director General or [Principal Chief 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 the 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 in this behalf.
(3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdication) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place.
(4) 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-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred."
The requirement of law is that before transfer of the case the assessee ought to have been given opportunity to file his objection as well as for personal hearing. In the present case, we find that sufficient opportunity was given to the petitioner by way of notice dated 08.06.2017 which clearly requires the petitioner to file his objection and present himself before the authority concerned on or before 28.06.2017. All that the petitioner did was file his objection on 12.06.2017 to transfer the case to Delhi. And on 27.06.2017 i.e. just one day before the last day of appearing before the authority asking for personal hearing. The petitioner himself did not avail the opportunity given to it for personal hearing vide notice dated 08.06.2017 therefore it cannot be said that no opportunity was given to the petitioner. In the impugned order the reasons have been given for transfer to Bikaner for co-ordinated post search investigation and for meaningful assessment. As such since reason is duly recorded, we do not find that the order suffers from any error.
Sri Gaurav Mahajan has relied upon the decision of this Court in the case of M/s Shekhar Resorts Ltd. Vs. Union of India passed in Writ Tax No. 566 of 2015 dated 21.07.2015 wherein it has categorically been held that the law requires reasons to be supplied for transfer of the case. In the present case, we find that sufficient reasons has been disclosed for transfer of the case. Ample opportunity was given to the petitioner to file his objection as well as for personal hearing which the petitioner did not avail and therefore the transfer order was passed under Section 127. It is further to be noted that from the objection filed by the petitioner he has himself stated that instead of cases be transferred to Bikaner it can be transferred to Central Circle Delhi as such the petitioner had full knowledge of the intention of the authority and the reason for the transfer of the case.
Learned counsel for the petitioner has also submitted that clause 2(c) of instruction no. 286/88/2008-IT (investigation II) dated 17th September, 2008 has not been considered by the respondent therefore the very basis of transfer of cases to ACIT, Central Circle, Bikaner is illegal. He has further submitted that the circulars and instructions issued by the CBDT are binding upon the departmental authorities.
We have gone through the contents of the clause 2(c) of the said circular. It provides as follows:-
"(c) In regions where there is no central circle or the group assessed in more than one CCIT region or involving more than one CIT charges, then the DGIT (Inv.) should identity the CIT charge in which the group searched will be centralized in consultation with the CCIT in whose jurisdiction the main case of the group are assessed to tax within seven days of initiation of search."
From the bare reading of the aforesaid clause, it is clear that the instructions so as mentioned in clause (c), are not at all relevant nor the same are applicabale in the present case. Clause (c) of the above instruction indicates about the place where the central circle authority is agreeable and/ or the group assessed in more than one Chief Commissioner of Income Tax region involving more than one CIT charge, in that event the Director General of Income Tax (Inv.) is authorised to identify the CIT charge and to centralise with the consultation of the Chief Commissioner of Income Tax, within whose jurisdiction the case of the group searched are assessed to tax.
In the present case as indicated herein above, that the group of cases are assessed on different place, namely, at Delhi, Noida, Bikaner, Mumbai etc. and therefore the submission of the learned counsel for the petitioner has no force as the cases of the petitioner group are centralised in accordance with law, and even otherwise the instructions are just to facilitate the authorities to carry on the execution of the proceedings in accordance with law and after due consideration of the entire material and facts of the case.
Learned counsel for the petitioner has not supported his submission, while pressing the aforesaid circular/ instruction, except tried to place sub-clause (c) of the said instruction, which in our opinion is not relevant in the facts of the present case.
In our opinion, in this group of cases, dozens of cases relating to the petitioner's group were proposed to be brought to one place for co-ordinated investigation, did not require any further or better or detailed reasons so as indicated in the impugned order passed under Section 127 of the Act.
We find that in the present case the principle of natural justice had been complied with and we further find that the order impugned has been passed by the authority after due consideration of the material and in accordance with law.
Considering the aforesaid, we do not find any merit, the writ petition is accordingly dismissed.
Order Date :- 26.10.2017
SK Srivastava
(Ashok Kumar,J.) (Abhinava Upadhya,J.)
