Calcutta High Court (Appellete Side)
Nouvelle Advisory Services ... vs Assistant Commissioner Of Income ... on 20 January, 2023
Item No.5.
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
HEARD ON: 20.01.2023
DELIVERED ON: 20.01.2023
CORAM:
THE HON'BLE MR. JUSTICE T. S. SIVAGNANAM
AND
THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA
M.A.T. No.2029 of 2022
with
I.A. No.CAN 1 of 2022
Nouvelle Advisory Services Private Limited.
Vs.
Assistant Commissioner of Income Tax, Circle 13(1), Kolkata & Ors.
Appearance:-
Mr. J. P. Khaitan, Sr. Adv.,
Ms. Debanjana De ... for the appellant.
Ms. Smita Das De ... for the respondents.
JUDGMENT
(Judgment of the Court was delivered by T.S. SIVAGNANAM, J.)
1. This intra-Court appeal is directed against the order dated
24th November, 2022 passed by the learned Single Bench in W.P.A.
No.25453 of 2022. The learned Single Bench had entertain the
writ petition, directed the respondents to file affidavit-in-
opposition after noting the submissions made by the learned
Advocate for the appellant. The order reads as follows:-
"Heard learned advocates appearing for the
parties.
I find in this matter that the file of the
petitioner has already been transferred under
Section 127 of the Income Tax Act, 1961 to Kanpur
jurisdiction sometimes in the year 2021 and as such
at the motion stage this Court cannot pass the
interim order of transferring back the file to
Kolkata by setting aside the impugned order of
transfer without giving the respondent Income Tax
Authority opportunity to file affidavit-in-
opposition for final adjudication of the matter.
Let the respondents file affidavit-in-
opposition within four weeks, petitioner to file
reply thereto, if any, within two weeks thereafter.
List this matter for final hearing in the monthly
list of February, 2023.
At the time of hearing, parties should be ready
with the short written notes of arguments.
It is clarified that the pendency of this writ
petition will not be a bar for the authority
concerned to proceed with the assessment proceeding
in the matter."
2. The appellant is aggrieved by that portion of the order
where the learned Single Bench had observed that the pendency of
the writ petition will not be a bar for the authority concerned
to proceed with the assessment proceedings in the matter.
3. The learned Senior Advocate appearing for the appellant
would contend that the transfer of jurisdiction passed pursuant
to the order dated 29th July, 2021 is vitiated on account of
failure to follow the mandatory procedure under Section 127 of
the Act in and by which the assessee is entitled to an
opportunity of being heard before the assessment jurisdiction is
transferred to the file of a different assessing officer. In
fact, this submission has been noted by the learned Single Bench
in the impugned order.
4. The order impugned in the writ petition dated 29th July,
2021 states that consequent to search and survey operation
conducted in the case of the appellant, it has been proposed to
transfer the jurisdiction of the case from Assistant
Commissioner of Income Tax / Deputy Commissioner of Income Tax,
Circle 13(1), Kolkata to Deputy Commissioner of Income Tax,
Central Circle 1, Kanpur, it is the submission of the appellant
that no search and survey operations were conducted on the
appellant. Ms. Smita Das De, learned senior standing counsel
appearing for the respondents, would submit that nexus has been
established between the assessee on whom search and survey
operation have been conducted and that of the appellant assessee
and therefore, for administrative convenience, the assessment
had been transferred to Central Circle 1, Kanpur.
5. Section 127 of the Act of 1961 gives power to transfer
cases. It states that the Principal Director General or
Director General or Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner of 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.
6. Thus, the language of Section 127 is clear that the
assessee should be given a reasonable opportunity of being heard
in the matter before the power under Section 127 of the Act is
invoked. The statute is also clear that such opportunity of
being heard is to be given wherever it is possible to do so. If
the authority proposes to dispense with the opportunity of
hearing, the statute states that reasons have to be reocrde3d
for not providing such an opportunity. On perusal of the order
impugned in the writ petition dated 29 th June, 2021, we find that
no such reasons have been recorded by the authority for
dispensing with the opportunity of personal hearing as no show
cause notice was issued to the assessee prior to order of
transfer.
7. In any event, the learned Single Bench was of the opinion
that the appellant had made out a prima facie case for
entertaining the writ petition. But, however, if the assessment
proceedings are to be proceeded by the assessing authority at
Kanpur, then the writ petition itself would become infructuous.
In any event, we are of the view that since no reasons have been
recorded by the authority for dispensing with the opportunity of
being heard, we find that there are no such reasons to do so.
Therefore, the authority is bound to issue notice to the
appellant and afford them a reasonable opportunity of being
heard before a decision is taken.
8. For such reason, we are inclined to remand the matter back
to the authority for a fresh decision. In the result, the
appeal stands disposed of along with the writ petition by
directing the appellant to treat the order passed by the
Principal Commissioner of Income Tax-5, Kolkata dated 29 th July,
2021 as a show cause notice and the appellant shall submit their
objection within fifteen days from the date of receipt of the
server copy of this judgment and order after which the Principal
Commissioner of Income Tax shall afford an opportunity of
hearing to the authorised representative of the assessee and
pass a speaking order on merit and in accordance with law.
9. It appears that consequent upon the order dated 29 th July,
2021, the assessing authority in Kanpur has taken up the re-
assessment proceedings and has passed an order dated 30 th July,
2022 under Section 148A(d) of the Act and also issued a notice
under Section 148 dated 30th July, 2022.
10. In the light of the above direction issued by us, the order
passed under Section 148A(d) of the Act dated 30 th July, 2022 and
the notice issued under Section 148 dated 30 th July, 2022 shall
be kept in abeyance and shall abide by the fresh order that may
be passed by the Principal Commissioner of Income Tax -5,
Kolkata in terms of the above direction.
11. There shall be no order as to costs.
12. Urgent photostat certified copy of this order, if applied
for, be furnished to the parties expeditiously upon compliance
of all legal formalities.
(T.S. SIVAGNANAM, J)
I agree,
(HIRANMAY BHATTACHARYYA, J.)
NAREN/PALLAB(AR.C)
