Delhi High Court
Rishabh Buildcon Pvt. Ltd vs The Commissioner Of Income Tax Delhi-V, ... on 14 February, 2011
Author: Sanjiv Khanna
Bench: Chief Justice, Sanjiv Khanna
* 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 W.P.(C) Nos.8506/2008, 8509/2008, 8511/2008 Page 1 of 7 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 W.P.(C) Nos.8506/2008, 8509/2008, 8511/2008 Page 2 of 7 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 W.P.(C) Nos.8506/2008, 8509/2008, 8511/2008 Page 3 of 7 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 W.P.(C) Nos.8506/2008, 8509/2008, 8511/2008 Page 4 of 7 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 W.P.(C) Nos.8506/2008, 8509/2008, 8511/2008 Page 5 of 7 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.
W.P.(C) Nos.8506/2008, 8509/2008, 8511/2008 Page 6 of 7
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 W.P.(C) Nos.8506/2008, 8509/2008, 8511/2008 Page 7 of 7