Gujarat High Court
Nilesh Natwarlal Sheth vs Assistant Commissioner Of Income Tax & 2 on 24 April, 2017
Bench: M.R. Shah, B.N. Karia
C/SCA/529/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 529 of 2017
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
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1 Whether Reporters of Local Papers may be allowed to see Yes
the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
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NILESH NATWARLAL SHETH....Petitioner(s)
Versus
ASSISTANT COMMISSIONER OF INCOME TAX & 2....Respondent(s)
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Appearance:
MR SN SOPARKAR, SR. ADVOCATE with MR BS SOPARKAR, ADVOCATE for the Petitioner
MR PRANAV G DESAI, ADVOCATE for the Respondent(s) No. 3
MRS MAUNA M BHATT, ADVOCATE for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 24/04/2017
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] By way of this petition under Article 226 of the Constitution of India, as such the petitioner has prayed for an appropriate writ, direction and order to quash and set aside the impugned transfer order under Section 127 of the Income Tax Act, 1961 (hereinafter referred to as "IT Act") passed by the respondent No.3 herein and the consequential Page 1 of 15 HC-NIC Page 1 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT notices / proceedings by the respondent No.1 (AnnexureA to the petition). However, subsequently, the Assessing Officer, before whom the case was transferred, had passed an assessment order under Section 143(3) read with Section 147 of the IT Act on 29.12.2016. Therefore, the petitioner by way of draft amendment has sought to amend the petition challenging the assessment order under Section 143(3) read with Section 147 of the IT Act also. By way of draft amendment the petitioner has also sought to challenge the order dated 20.10.2016 (AnnexureR1) passed by the Principal Director of Income Tax (Investigation) granting the approval of the proposal madd by the DGIT (Investigation), Ahmedabad and to transfer the case under Section 127 of the IT Act.
[1.1] Having heard learned Counsel appearing on behalf of the respective parties and considering the fact that in the original petition what is challenged is the order of transfer of the proceedings from one Assessing Officer to another Assessing Officer, passed in exercise of powers under Section 127 of the IT Act and by permitting the petitioner to challenge the subsequent assessment order passed under Section 143(3) read with Section 147 of the IT Act, the entire cause of action and even the grounds is likely to be changed and therefore, the draft amendment insofar as challenge to the order of assessment dated 29.12.2016 passed under Section 143(3) read with Section 147 of the IT Act is hereby rejected. However, liberty is reserved in favour of the petitioner to challenge the same before appropriate Court / Forum. Draft amendment is allowed insofar as permitting the petitioner to challenge the order dated 20.10.2016 (AnnexureR1 to the petition) under Section 127 of the IT Act.
[2.0] Facts leading to the present Special Civil Application in nutshell are as under:
Page 2 of 15HC-NIC Page 2 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT [2.1] That the petitioner originally filed the return of income on 18.09.2009 declaring total income of Rs.22,55,150/ for AY 200910.
That the petitioner was served with the notice dated 30.03.2016 under Section 148 of the IT Act by which the Assessing Officer sought to reopen the assessment for AY 200910 alleging inter alia that the income chargeable to tax has escaped assessment within the meaning of section 147 of the IT Act. That the petitioner asked the Assessing Officer - respondent No.2 herein - Assistant Commissioner of Income Tax, Circle 1(2), Rajkot to furnish the reasons recorded to reopen the assessment. It is the case on behalf of the petitioner that despite repeated requests the respondent No.2 - Assistant Commissioner of Income Tax, Circle1(2), Rajkot did not furnish the reasons recorded. However, thereafter, by letter dated 11.11.2016 the respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, Rajkot asked the petitioner to file the return of income and audit report under Section 142(1) of the IT Act. It is the case on behalf of the petitioner that thereafter the petitioner replied vide letter dated 15.11.2016 stating that he has not received any notice, reasons or order under Section 127 of the IT Act regarding the transfer of his case from respondent No.2 - Assistant Commissioner of Income Tax, Circle(2), Rajkot to the respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, Rajkot and therefore, the respondent No.1 has no jurisdiction. That the petitioner also stated that the return as originally filed may be considered as the return furnished under Section 148 of the IT Act and further asked for the reasons of reopening the same.
[2.2] It appears that thereafter the respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, Rajkot vide letter dated 16.11.2016 communicated the petitioner that the case of the petitioner has been transferred under Section 127 of the IT Act vide order under Section 127(2)(a) read with Section 127(3) of the IT Act. It is the case on behalf of the petitioner that thereafter the petitioner wrote to Page 3 of 15 HC-NIC Page 3 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT respondent No.3 - Principal Commissioner of Income Tax - 1, Rajkot to supply him the copy of the transfer order. That thereafter the respondent No.1 supplied the reasons recorded to reopen the assessment vide letter dated 14.12.2016. That the petitioner raised the objections against the reasons recorded to reopen the assessment vide objections dated 19.12.2016. That vide communication / order dated 20.12.2016, the respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, rejected the objections raised by the petitioner. That thereafter the petitioner has preferred the present Special Civil Application challenging the impugned transfer order under Section 127(2)(a) read with Section 127(3) of the IT Act and the consequential proceedings vide notice dated 11.11.2016 by which the assessment proceedings are transferred from the office of respondent No.2 - Assistant Commissioner of Income Tax, Circle2, Rajkot to the office of respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, Rajkot.
[3.0] Shri S.N. Soparkar, learned Senior Advocate has appeared on behalf of the petitioner - assessee, Mrs. Mauna Bhatt, learned Advocate has appeared on behalf of respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, Rajkot to whom the assessment proceedings are transferred and Shri Pranav G. Desai, learned Advocate has appeared on behalf of respondent No.3 - Principal Commissioner of Income Tax1, Rajkot.
[4.0] Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner has submitted that the impugned order of transfer under Section 127 of the IT Act passed by the respondent No.3 and the consequential notices are absolutely and patently bad, illegal and contrary to law.
[4.1] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner that no reasons are recorded prior Page 4 of 15 HC-NIC Page 4 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT to issuing the transfer order nor the same have been communicated. It is submitted that it was incumbent upon the respondent No.3 to record the reasons for transfering the case of the petitioner from respondent No.2 to respondent No.1. It is submitted that case of the petitioner is also not subjected to any search and/or seizure action under Section 132 of the IT Act so as to transfer the same to the Central Circle. It is submitted that in the noncommunication of the reasons recorded and the failure to communicate the order would vitiate the order made under Section 127(2) of the IT Act.
[4.2] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner that as such in the present case it is true that the transfer of the case is from one office to another office in the same city, however not witin the same Commissionerate. It is submitted that the case has been transferred from office of Commissionerate, Rajkot to the office under the Director of Investigation. It is submitted that therefore the impugned order is absolutely bad in law more particularly when no reasons are recorded and/or supplied.
[4.3] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner that even the reasons recorded in the order under Section 127(2)(a) read with Section 127(3) of the IT Act to transfer the case from respondent No.2 to respondent No.1 also are not germane. It is submitted that in the reasons recorded it is stated that for "coordinated investigation", however the details with respect to other cases are not stated in the order. It is submitted that therefore, the order of transfer of the case of the petitioner from respondent No.2 to respondent No.1 suffers from nonapplication of mind. It is submitted that even the order of transfer cannot be said to be reasoned order. It is submitted that any reasoned order must reflect the application of mind as there is a subjective satisfaction. In support of his above submissions, Page 5 of 15 HC-NIC Page 5 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT he has heavily relied upon the decision of this Court in the case of Anuben Lalabhai Bharwad vs. Principal Commissioner of Incometax 3 reported in (2016) 72 Taxmann.com 178 (Gujarat).
Making above submissions and relying upon following decisions, Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioner has requested to allow the present petition and quash and set aside the order of transfer passed under Section 127 of the IT Act by which the assessment proceedings came to be transferred from the office of respondent No.2 to the office of respondent No.1.
1. Ajantha Industries vs. Central Board of Direct Taxes (1976) 102 ITR 281 (SC)
2. Anuben Lalabhai Bharwad vs. Principal Commissioner of Income tax3 (2016) 72 Taxmann.com 178 (Gujarat)
3. Ramswaroop S/o. Parasram Mundra & Ors. vs. Commissioner of Income TaxII, Nagpur 2016 (388) ITR 208
4. Zodiac Developers Pvt. Ltd. vs. Principal Commissioner of Income Tax 2016 (387) ITR 223
5. Hindusthan MI Swaco Ltd. vs. Principal Commissioner of Income tax, Vadodara3 (2016) 72 taxmann.com 14 (Gujarat)
6. Dr. Hemang Ashvinkumar Baxi vs. Dy. Commissioner of Income tax, Central Circle 2(3) & 1 Special Civil Application No.7047/2010 [5.0] Present petition is vehemently opposed by Shri Pranav G. Desai, learned Advocate appearing on behalf of the respondent No.3 and Mrs. Mauna Bhatt, learned Advocate appearing for respondent No.1.
[5.1] It is vehemently submitted by Shri Desai, learned Advocate appearing on behalf of the respondent No.3 that in the present casethe Page 6 of 15 HC-NIC Page 6 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT case has been transferred from one office to another office situated in the same city and therefore, considering provision of section 127 of the IT Act, neither any opportunity is required to be given nor the reasons are required to be assigned. In support of his above submissions, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Kashiram Aggarwalla vs. Union of India and Ors. reported in 56 ITR 14 (SC).
[5.2] It is further submitted that even otherwise in the present casethe reasons are recorded i.e. for "coordinated investigation". It is further submitted by Shri Desai, learned Advocate that as such the petitioner has not shown any prejudice caused to him and/or likely to be caused to him while transfering the case from office of respondent No.2 to office of respondent No.1 which is in the same city.
[5.3] It is further submitted that even otherwise in the present case after the order of transfer of the case of the petitioner from the office of respondent No.2 to the office of respondent No.1, thereafter the petitioner even participated in the assessment proceedings before the respondent No.1.
[5.4] It is further submitted by Shri Desai, learned Advocate appearing on behalf of the respondent No.3 that in the present case even the background of the case of the petitioner is also required to be considered while considering the challenge to the impugned order of transfer of the case of the petitioner from the office of respondent No.2 to the office of respondent No.1.
[5.5] It is submitted that the petitioner is a share broker who facilitates share trading activities for his clients. Besides, he is also engaged in trade of shares. That the Director of Income Tax (Intelligence & Criminal Investigation) carried out thorough investigation in respect of certain Page 7 of 15 HC-NIC Page 7 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT brokers who were indulged in the practice of transfering fictitious profit and loss by misusing the client cod modification facility in F&O segment on NSE during March 2010, to different client / beneficiaries, according to their requirements to enhance or reduce the tax liability. That the Directorate obtained client code modification (CCM) data for AY 2009 10 from NSE and mapping was done of such data to ascertain the exact amount of fictitious profits / losses in each case. It is submitted that investigation, analysis and verification revealed that one of the major tools used for systematic tax evasion is client code modification (CCM). That a search in the case of Amrapali Group of Ahmedabad was conducted on 26.10.2010. Detailed analysis of the client codes modified by ACFL (a group entity involved in broking) was carried out and it was found that CCM was used as a tool so as to systematically shift profits and losses. On further analysis of the accounts and return of income of the persons whose codes were modified, it was found that without exception the persons who had booked profits in their books has obtained losses so as to set off their book profits through CCM. The profits were found to be systematically shifted to the codes of persons who had booked losses and did not pay any substantial taxes on the profits gained. That the entire analysis of CCM of only one broker led to detection of shifting of losses and result deduction of book profits aggregating to Rs.46.57 Crores. That the Amrapali Group accepted the income to the tune of over Rs.40 Crores before the Settlement Commission primarily on account of CCM. That based on the findings in the Amrapali Group and the quantum of taxes evaded by resorting to CCM, the Department started collecting all India data of CCM pertaining to FY 200809 to 201011 from different exchanges. That the SEBI also conducted a probe into "Modification of Client Codes" by brokers. That thereafter, the DIT (I & CI), Bombay conducted spot verification under Section 131(1A) of the IT Act in the cases of few brokers. The brokers admitted misuse of Client Code Modification and receipt of commission Page 8 of 15 HC-NIC Page 8 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT of 0.5 to 2%. That Investigation Unit of the Income Tax Department called for the details from different exchanges including the agency. That thereafter the Income Tax Department [DIT(I & CI)] sought expert opinion from NSE to broadly distinguish the genuine CCM and non genuine CCM. That the nongenuine CCMs were observed while analyzing the data of the brokers including the assessee by the I&CI Wing of the Income Tax Department. The assessee had claimed losses to the tune of Rs.2,07,62,482/ for AY 200910 by resorting to such non genuine CCM practices. The said facts were not disclosed by the assessee in his return of income. Therefore, the assessment was reopened. That while issuing the notice under Section 148 of the IT Act, the Assessing Officer had attached the copy of the reasons recorded and therefore, the petitioner was well aware of the reasons for which his assessment was reopened.
[5.6] It is further submitted by Shri Desai, learned Advocate appearing on behalf of respondent No.3 that therefore the office of respondent No.3 - Principal Director of Income Tax (Investigation) received a communication from the Director of Investigation, informing that Director General of Income Tax has approved centralization of 234 cases (including case of the petitioner) who are beneficiaries of the contrived losses through Client Code Modification. As per the said communication, the case of the petitioner was to be centralized with one officer of Central Circle at Rajkot itself. Therefore, the case was to be transferred from one office to another office at the same station. It is submitted that therefore, the case of the assessee was being transferred from one office to another office in the same station and therefore, there was no requirement to give opportunity to the petitioner and seek his objection considering section 127(3) of the IT Act. Therefore, the respondent No.3 proceeded to transfer the case of the petitioner as per the provisions of the law. It is submitted that as such through clerical oversightness, copy of the transfer order could not be marked to the petitioner. It is Page 9 of 15 HC-NIC Page 9 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT submitted that however no prejudice was meted upon the petitioner because, immediate upon passing of the order under Section 127 (order of centralization), the respondent No.1 intimated to the petitioner to file details in connection with his assessment proceedings and therefore, infact he has come to know about centralization of his case through the respondent No.1. It is therefore submitted that the order of transfer of the case of the petitioner is absolutely just and proper.
Making above submissions and relying upon the decision of the Hon'ble Supreme Court in the case of Kashiram Aggarwalla (Supra) and in the case of K.P. Mohammed Salim vs. Commissioner of IncomeTax, Cochin reported in 2008 (300) ITR 302 and the decision of this Court in the case of Shree Ram Vessel Scrap Pvt. Ltd. vs. Commissioner of Income TaxVI reported in 2013 (255) ITR 255 and the object and purpose for which the case of the petitioner was transferred from one office to another office and in the same city, has requested to dismiss the present petition.
[6.0] Mrs.Mauna Bhatt, learned Advocate appearing on behalf of the respondent No.1 has submitted that as such thereafter the petitioner participated in the reassessment proceedings before the respondent No.1 and thereafter the respondent no.1 has passed the assessment order under Section 143(3) read with Section 147 of the IT Act. It is submitted that the order of assessment has been passed on 29.12.2016 and thereafter the petitioner has also preferred appeal which is pending before the learned CIT(A). Therefore, it is requested to dismiss the present petition.
[7.0] Heard learned Counsel appearing on behalf of the respective parties at length.
At the outset it is required to be noted that by way of present petition the petitioner - assessee has challenged the impugned order of transfer transfering his case from office of respondent No.2 - Assistant Page 10 of 15 HC-NIC Page 10 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT Commissioner of Income Tax, Circle1(2), Rajkot to the office of respondent No.1 - Assistant Commissioner of Income Tax, Central Circle2, Rajkot.
[7.1] It is required to be noted that the case of the petitioner has been transferred under Section 127 of the IT Act from one office to another office in the same city. Therefore, considering section 127(3) of the IT Act opportunity of being heard is not required to be given when the case has been transferred from one office to another office in the same city.
[7.2] It is the case on behalf of the petitioner that neither any reasons are recorded nor the reasons are supplied while passing order under Section 127 of the IT Act transfering the case of the petitioner from the office of respondent No.2 to the office of respondent No.1. However, as observed hereinabove, the case has been transferred from one Officer to another Officer in the same city. Therefore, in such a situation whether while passing the order under Section 127 of the IT Act, the reasons are required to be recorded or not came to be considered by the Hon'ble Supreme Court in the case of Kashiram Aggarwalla (Supra). In the said decision the Hon'ble Supreme Court also considered its earlier decision in the case of Pannalal Binjraj vs. Union of India [(1957) 31 ITR 565]. In the aforesaid decision, considering the provisions of section 127 of the IT Act, it is observed that when the case is transferred from one Officer to another Officer in the same city / station, neither any opportunity is required to be given nor the same can be set aside for the want of reasons recorded in the order of transfer. It is further observed that the order of transfer of the case from one Officer to another Officer is purely in the nature of an administrative order passed for considerations of convenience of the department and no possible prejudice can be involved in such a transfer. In the aforesaid decision the Hon'ble Supreme Court has observed and held as under:
Page 11 of 15HC-NIC Page 11 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT "There is another consideration which is also relevant. Section 124 of the Act deals with the jurisdiction of Incometax Officers. Section 124(3) provides that within the limits of the area assigned to him, the Incometax Officer shall have jurisdiction
(a) in respect of any person carrying on a business or profession, if the place at which he carries on his business of profession is situate within the area, or where his business or profession is carried on in more places than one, if the principal place of his business or profession is situate within the area, and
(b) in respect of any other person residing within the area.
This provision clearly indicates that where a transfer is made under the proviso to section 127(1) from one Incometax Officer to another in the same locality, it merely means that instead of one Incometax Officer who is competent to deal with the case, another Incometax Officer has been asked to deal with it. Such an order is purely in the nature of an administrative order passed for considerations of convenience of the department and no possible prejudice can be involved in such a transfer. Where, as in the present proceedings, assessment cases pending against the appellant before an officer in one ward are transferred to an officer in another ward in the same place, there is hardly any occasion for mentioning any reasons as such, because such transfers are invariably made on grounds of administrative convenience, and that shows that on principle in such cases neither can the notice be said to be necessary, nor would it be necessary to record any reasons for the transfer. The provisions contained in section 124(3) of the Act deal with the same topic which was the subject matter of section 64(1) and (2) of the earlier Income tax Act, 1922 (XI of 1922). There is, however, this difference between these two provisions that whereas s. 124 fixes jurisdiction, territorial or otherwise, of the Incometax Officers, section 64 fixed the place where an assessee was to be assessed.
In this connection, it is also necessary to take into account the background of the provision contained in section 127. In Pannalal Binjraj v. Union of India, the validity of section 5(7A) of the earlier Act of 1922 was challenged before this Court. The said section had provided that the Commissioner of Incometax may transfer any case from one Incometax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income tax Officer to another. Such transfer may be made at any stage of the proceedings, and shall not render necessary the areissue of any notice already issued by the Incometax Officer from whom the case is transferred. The argument which was urged before this Court in challenging the validity of this provision was that it infringed the Page 12 of 15 HC-NIC Page 12 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT citizens' fundamental rights conferred by Articles 14 and 19(1)(g) of the Constitution. In support of this argument, reliance was placed on the fact that section 64(1) and (2) conferred a right on the assessee to have his tax matter adjudicated upon by the respective officers mentioned in the said provisions; and since section 5(7A) authorised the transfer of the assessee's case from one Incometax Officer to another, that involved infringement of his fundamental rights guaranteed by Articles 14 and 19(1)(g) read with section 64(1) & (2). It is necessary to emphasise that section 5(7A) authorised transfer of incometax cases from one officer to another not necessarily within the same place. In other words, the transfer authorised by section 5(7A) would take the case from the jurisdiction of an officer entitled to try it under section 64(1) & (2) to another officer who may not have jurisdiction to try the case under the said provision. That, indeed, was the basis on which the validity of Section 5 (7A) was challenged. This Court, however, repelled the plea raised against the validity of the said section on the ground that the right conferred on the assssee by section 64(1) & (2) was not an absolute right and must be subject to the primary object of the Act itself, namely, the assessment and collection of the incometax; and it was also held that where the exigencies of tax collection ,so required, the Commissioner of Incometax or the Central Board of Revenue had the power to transfer his case under Section 5 (7A) to some other officer outside the area where the assessee resided or carried on business. That is how section 5(7A) was sustained.
Even so, this Court observed in the case of Pannalal Binjraj that it would be better if an opportunity is given to the assessee in cases where the powers conferred by section 5(7A) were intended to be exercised, because he would then be able to mention his objections to the intended transfer. It is in that connection that this Court further expressed its opinion that if the reasons for making the transfer "are reduced, however briefly, to writing, it will help the assessee in appreciating the circumstances which make it necessary or desirable to order such a transfer." It is obviously in pursuance of these observations that the Legislature has made the relevant provisions in section 127(1) of the Act. If this background is home in mind, it would be clear that the propriety of giving an opportunity to an assessee and the desirability of recording reasons which this Court emphasised, had reference to cases where transfers were intended to be made from an Incometax Officer in one place to the Incometax Officer in another place; and they obviously had no reference to transfers like the present where instead of one officer dealing with the case, another officer in the same place is asked to deal with it.
It is in the light of these considerations that we have to construe the proviso to Section 127(1). As we have already indicated, the construction for which Mr. Jain contends is a reasonably possible Page 13 of 15 HC-NIC Page 13 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT construction. In fact, if the words used in the proviso are literally read, Mr. Jain would be justified in contending that requirement that reasons must be recorded applies even to falling under it. On the other hand, if the obvious object proviso is taken into account and the relevant previous ound is borne in mind, it would also seem reasonable to that in regard to cases falling under the proviso, an opportneed not be given to the assessee, and the consequential to record reasons for the transfer is also unnecessary, and view is plainly consistent with the scheme of the provision and true intent of its requirements. We would accordingly hold the impugned orders cannot be challenged on the ground that Board has not recorded reasons in directing the transfer of the pending against the assessee from one Incometax Officer other in the same locality."
[7.3] Now, considering the impugned order it appears that even the reasons are recorded to transfer the case of the petitioner from respondent No.2 to respondent No.1 i.e. for "coordinated investigation". Proposal was made by DGIT (Investigation), Ahmedabad for centralization of 234 cases of the beneficiaries who have taken contrived losses through Client Code Modification at their respective places of assessment (without change of location) with one officer of Central charge of respective station. The same came to be accepted and the case of the petitioner came to be transferred to Centralized office at Rajkot i.e. respondent No.1. All the requirements which are required to be followed have been followed. The decision seems to have been taken in larger public interest and for "coordinated investigation" of similar cases at the Central Office athe location.
[7.4] Now, so far as the reliance placed upon the decisions of the learned Counsel appearing on behalf of the petitioner referred to hereinabove more particularly the decision in the case of Ajantha Industries (Supra) and Pannalal Binjraj (Supra) are concerned, aforesaid decisions shall not be applicable to the facts of the case on hand more particulary when in the present case the case has been transferred from one Officer to another Officer in the same city / station and that the procedure as required to be followed under Section 127 of the IT Act has Page 14 of 15 HC-NIC Page 14 of 15 Created On Sat Aug 12 10:55:05 IST 2017 C/SCA/529/2017 JUDGMENT been followed and that even the reasons are recorded i.e. "coordinated investigation" at one Central Office at the locations. As observed hereinabove, even in the present case subsequently the assessment order has been passed by the respondent No.1 to whom the case was transferred vide order of assessment dated 29.12.2016 passed under Section 143(3) read with Section 147 of the IT Act, against which the petitioner - assessee has preferred the appeal, which is pending before the learned CIT(A).
[7.5] Considering the aforesaid facts and circumstances and in the facts and circumstances of the case, it cannot be said that the impugned order of transfer under Section 127 of the IT Act suffers from any illegality more particularly when the case has been transferred from one Officer to another Officer at same station and neither any prejudice is pleaded nor any prejudice is shown to have been caused to the petitioner.
[8.0] In view of the above and for the reasons stated above, present petition fails and the same deserves to be dismissed and is, accordingly, dismissed. However, it is clarified that as we have not entered into the legality and validity of the order of assessment as the appeal is pending before the learned CIT(A), the learned CIT(A) to decide and dispose of the appeal on its own merits. Notice is discharged. No costs.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 15 of 15 HC-NIC Page 15 of 15 Created On Sat Aug 12 10:55:05 IST 2017