THE issue before the Bench is - Whether for the purpose of transfer of a case u/s 127(2), the mere mention of the reason ''for effective and coordinated investigation' by the Revenue in the Show Cause Notice is neither vague nor insufficient.
The assessees were members of the same family/group companies. Search operations were carried out by the income tax authorities at their premises. Assessment proceedings arising out of such search were pending before the respective AO who were all authorities situated at
Bhavnagar. The CIT, Ahmedabad passed an order u/s 127(2) transferring such pending assessments from Bhavnagar to Ahmedabad. Such orders were challenged by the petitioners before this Court. Such petitions were disposed on the assurance of the Revenue that CIT shall withdraw such order. The CIT transferred all the cases to Assistant CIT, Ahmedabad.
In a peition before the HC, the Assessee's Counsel submitted that the reason indicated in the show cause notice for transferring of the cases namely, “for effective and coordinated investigation” is too vague and general. In any case, such reason was not sufficient permitting the department to transfer the cases. The Counsel lastly submitted that none of the assessees were assessed at Ahmedabad. The Revenue's Counsel submitted that all the requirements for exercise of power u/s 127(2) as interpreted by various Courts were fully complied with.
Having heard the parties, the HC held that,
++ 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 without jurisdiction or is actuated by mala fide either in fact or in law;
++ reason for transfer was clearly indicated in the show cause notice namely, for centralisation of cases and for effective and coordinated investigation. The Assessee has no right in law to insist that his case be kept out of consideration of such branch. The reason “for effective and co-ordinate investigation” for transfer of assessment cases is neither vague or ground not insufficient.
The assessees were members of the same family/group companies. Search operations were carried out by the income tax authorities at their premises. Assessment proceedings arising out of such search were pending before the respective AO who were all authorities situated at
Bhavnagar. The CIT, Ahmedabad passed an order u/s 127(2) transferring such pending assessments from Bhavnagar to Ahmedabad. Such orders were challenged by the petitioners before this Court. Such petitions were disposed on the assurance of the Revenue that CIT shall withdraw such order. The CIT transferred all the cases to Assistant CIT, Ahmedabad.
In a peition before the HC, the Assessee's Counsel submitted that the reason indicated in the show cause notice for transferring of the cases namely, “for effective and coordinated investigation” is too vague and general. In any case, such reason was not sufficient permitting the department to transfer the cases. The Counsel lastly submitted that none of the assessees were assessed at Ahmedabad. The Revenue's Counsel submitted that all the requirements for exercise of power u/s 127(2) as interpreted by various Courts were fully complied with.
Having heard the parties, the HC held that,
++ 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 without jurisdiction or is actuated by mala fide either in fact or in law;
++ reason for transfer was clearly indicated in the show cause notice namely, for centralisation of cases and for effective and coordinated investigation. The Assessee has no right in law to insist that his case be kept out of consideration of such branch. The reason “for effective and co-ordinate investigation” for transfer of assessment cases is neither vague or ground not insufficient.
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