Rishabh Buildcon Pvt. Ltd vs The Commissioner Of Income Tax ...
2011 Latest Caselaw 873 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+      W.P.(C) 8506/2008

RISHABH BUILDCON PVT. LTD                                   ..... Petitioner
                 Through                      Mr. V.P. Gupta, Mr. Basant Kumar
                                              and Mr. Anuj Bansal, Advocates.
                versus
THE COMMISSIONER OF INCOME TAX DELHI-V, NEW DLEHI &
OTHERS                                   ..... Respondent
                       Through Mr. Anupam Tripathi, Sr. Standing
                               Counsel.
+    W.P.(C) 8509/2008

PROMINENT BUILDCON P.LTD.              ..... Petitioner
                 Through  Mr. V.P. Gupta, Mr. Basant Kumar
                          and Mr. Anuj Bansal, Advocates.

                versus
THE COMMISSIONER OF INCOME TAX DELHI & ORS. Respondent
                       Through Mr. Abhishek Maratha, Sr.
                               Standing Counsel.
+    W.P.(C) 8511/2008

RISHABH BUILDWELL PVT. LTD                ..... Petitioner
                    Through Mr. V.P. Gupta, Mr. Basant Kumar
                            and Mr. Anuj Bansal, Advocates.
             versus

COMMISSIONER INCOME TAX DELHI-V , NEW DELHI &OTHERS
                                       ..... Respondent
                 Through    Mr. Abhishek Maratha, Sr.
                            Standing Counsel.
    CORAM:
    HON'BLE THE CHIEF JUSTICE
    HON'BLE MR. JUSTICE SANJIV KHANNA
                  ORDER

% 14.02.2011

Regard being had to the similitude of the controversy involved, the

writ petitions were heard together and are disposed of by a singular order.

2. We have heard Mr. V.P. Gupta, learned counsel for the petitioner,

Mr. Anupam Tripathi and Mr. Abhishek Maratha, learned counsel for the

Revenue.

3. By these writ petitions, the challenge is to the separate orders

passed by the Commissioner of Income Tax (Delhi-V), New Delhi

transferring the cases of the assessee under Section 127(1) of the Income

Tax Act, 1961 (for brevity, the Act) from Delhi to Ghaziabad. It is not in

dispute that a survey was conducted by the Revenue and thereafter a

notice to show cause was issued for transferring the cases from Delhi to

Ghaziabad. The assessee filed show cause/reply stating, inter alia, that

there was no need or justification to transfer the cases. Thereafter, the

Commissioner passed the order filed as Annexure P-1 to the W.P.(C)

8506/2008. On a perusal of the said order, it transpires that the authority

has reproduced the show cause and thereafter the following order came to

be passed:-

"Keeping in view the fact that the assessee has an ongoing project at Ghaziabad and the survey operation was carried out by the investigating team at Ghaziabad, it is justified and necessary to transfer these cases at Ghaziabad as necessary investigation with regard to carrying out of ongoing project and investment therein can be made effective at Ghaziabad. Hence, on the facts and circumstances of cases, the petition/plea of the assessee for

non-transfer of these cases is hereby rejected."

4. In this context, we may usefully refer to Section 127 of the Act

which reads as follows:-

"127. Power to transfer cases.

(1) The Director General or Chief 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 Director General or Chief Commissioner or Commissioner,-

(a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief 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 Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief 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 jurisdiction) 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.

Explanation.-In Section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year."

5. On a reading of the aforesaid provision, three aspects emerge:-

(i) A show cause notice has to be issued and a reply has to be called

for.

(ii) The assessee has to be afforded opportunity of hearing.

(iii) The authority concerned has to pass a reasoned order.

6. The submission of Mr. Gupta, learned counsel for the assessee is

that though the competent authority seems to have passed a reasoned

order but in actuality, it is not so, for the simple reason after rejecting the

stand taken in the show cause, the competent authority has only stated that

there is ongoing project at Ghaziabad and survey operation was carried

out and hence, it is justified to transfer the cases. Learned counsel would

submit that the reasons ascribed are to be cogent and germane and it has

also to meet the stand and stance put forth in the reply. It is further

canvassed by him that the registered office of the assessee is at Delhi and

the shareholders and the Directors stay in Delhi and most of the projects

are carried out in Delhi. He has also invited our attention to the list of

Directors, shareholders and the projects that have been carried out by the

petitioner-assessee in Delhi as per page 40 of the paper book.

7. Mr. Maratha and Mr. Tripathi, per contra, would contend that

multiple projects are being carried out by the assessee at Ghaziabad and,

therefore, regard being had to the convenience the Commissioner of

Income Tax had transferred the cases to Ghaziabad so that accounts and

other aspects can be verified at the said place. Learned counsel further

submitted that there are insignificant activities carried out in Delhi and,

therefore, there is no justification to interfere with the order passed by the

Commissioner of Income Tax. Learned counsel for the Revenue has

placed reliance on the decision in ATS Infrastructure Ltd. Vs.

Commissioner of Income Tax [2009] 318 ITR 299 (Delhi).

8. Having heard learned counsel for the parties, we are of the

considered opinion that what has been stated by Mr. Maratha and Mr.

Tripathi by way of affidavit and what is stated in the order are quite

different. The provision requires reasons shall be given by the authority.

The reasons are to be cogent and germane having nexus to the facts of the

case. What is demonstrable from the order passed is that there was a

survey and a project is to be carried out at Ghaziabad. What is being

contended before us is that during survey, it was found that multiple

projects were carried out by the assessee at the relevant point of time. The

same being absent in the order, we are of the considered opinion the

matter has to be heard by the CIT afresh. We say so as we are of the

considered view that the order cannot be laconic and must meet the

concept of reason in its real essentiality. True it is, in certain

circumstances this Court would not enter into the realm of sufficiency of

reasons but when the reason really lacks the concept of reason this Court

would exercise the inherent power to quash the same and command the

respondent authority to pass a reasoned order, which would show

germaneness.

9. Regard being had to the aforesaid analysis, the order passed by the

CIT transferring the case from Delhi to Ghaziabad is quashed with further

direction that the said authority shall afford adequate opportunity of

hearing to the assessee-petitioner and pass a fresh order by ascribing

reasons, which shall be the heart and soul of the matter. Needless to say,

the period spent in adjudication of the writ petition has to be excluded for

the purpose of computation of limitation. To cut short the delay, the

assessee-petitioner shall appear before the CIT on 24th February, 2011.

The Commissioner after affording opportunity of hearing to the assessee-

petitioner shall dispose of the matter by 4th March, 2011. Needless to say,

as we have remitted the matter to the CIT, the interim order passed by this

Court shall remain in force.

10. The writ petitions are accordingly disposed of without any order as

to costs.

CHIEF JUSTICE

SANJIV KHANNA, J.

FEBRUARY 14, 2011 NA