KAMLESH RAJNIKANT SHAH V. PRINCIPAL COMMISSIONER OF INCOME TAX 3, AHMEDABAD

SCA/7643/2021

AI Insights

Kamlesh Rajnikant Shah, engaged in the business of trading agricultural products, challenged the transfer of his income tax case jurisdiction from Ahmedabad to Mumbai. The transfer was initiated following a search and seizure operation under Section 132(1) of the Income Tax Act, 1961, in the case of Shri Gaurav Krishnakant Laddha and others, which allegedly revealed connections to Shah. The Principal Commissioner of Income Tax, Ahmedabad, ordered the transfer to facilitate a coordinated investigation. Shah objected, citing lack of direct involvement with the searched individuals and the inconvenience of the transfer. The court, after considering the submissions and the legal framework, upheld the transfer, emphasizing the need for effective investigation and the administrative discretion of the tax authorities.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 761892 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 29-03-2022
• Assessment Year: misc
• Other Referred Cases: Shree Ram Vessel Scrap P. Ltd. vs. Commissioner of Income-tax, General Exporters v. CIT, Aamby Valley Ltd. vs. Commissioner of Income-tax, Vishal Kumar vs. Commissioner of Income, Pannalal Binraj vs. Union of India
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: M R BHATT
• Assessee Lawyers: PREM LATA BANSAL; HARDIK VORA
• Keywords: Centralization of Cases; Certiorari; Certiorari; Jurisdiction transfer; Effective Investigation; Coordinated Assessment
• Section: 153A; 153C; 132(1); 127

Judgement Text

"C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 7643 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE ========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? YES 2 To be referred to the Reporter or not ? YES 3 Whether their Lordships wish to see the fair copy of the judgment ? NO 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? NO ========================================================== KAMLESH RAJNIKANT SHAH Versus PRINCIPAL COMMISSIONER OF INCOME TAX 3, AHMEDABAD ========================================================== Appearance: MS PREMLATA BANSAL WITH MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1 MR MR BHATT FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1,2,4 NOTICE SERVED for the Respondent(s) No. 3 ========================================================== CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 29/03/2022 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the Page 1 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 following reliefs: “a. A writ of Certiorari or any other writ, order or direction in the nature of Certiorari quashing the impugned order dated 30.09.2020 issued under Section 127 of the Act to transfer the jurisdiction to DCIT, Central Circle-8(1), Mumbai from Income Tax Officer Ward-4(2)(2), Ahmedabad; b. Pending further hearing and final disposal of this petition, to stay the order u/s. 127 dated 30.09.2020 passed by the respondent No.1 and consequent proceedings u/s. 153C for A.Y.2013- 14 to A.Y. 2018-19 initiated by respondent No.4. c. Pending further hearing and final disposal of this petition, to stay consequent proceedings u/s. 153A for A.Y. 2014-15 to A.Y. 2019-20 initiated by respondent no.4. d. Pass any other order(s) as this Hon’ble Court may deem fit and more appropriate in order to grant interim relief to the Petitioner; e. Any other and further relief deemed just and proper be granted in the interest of justice; f. To provide for the cost of this petition.” 2. The facts giving rise to this writ application may be summarized as under: 2.1 The writ applicant claims to be in the business of trading in vegetables, flowers, fruits, agriculture products etc. It appears that the Deputy Commissioner of Income Tax, Ahmedabad, vide notice dated 04.11.2019 informed the writ applicant that consequent to the search and Page 2 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 seizure action undertaken in the case of one Shri Gaurav Krishna Kant Laddha and others on 17.04.2018 under Section 132(1) of the Income Tax Act, 1961 (for short “the Act, 1961”) by the DCIT (Inv.) Mumbai, it was proposed to centralize the case of the writ applicant with the Deputy Commissioner of Income Tax, Central Circle-8(1), Mumbai for the purpose of effective and coordinated investigation and assessment. The writ applicant was called upon to lodge his objections, if any, to such decision to transfer the case under Section 127 of the Act, 1961. 2.2 The writ applicant gave a reply of one line on 14.11.2019 to the aforesaid notice stating that he has objection for the centralization of his case from the ITO, Ward 4(2)(2), Ahmedabad, to the DCIT CC-8(1), Mumbai. 2.3 On 22.09.2020, the office of the Principal Commissioner of Income Tax-3, Ahmedabad, gave one another notice for transfer of the case, which reads thus: “No.AHD/PCIT3/HQ/CETR’N/KS/GKL Group./2020-21 Date22.09.2020 To, Kamlesh Shah, C-11, Sarvodaynagar, Nr. Sola Railway Crossing, Sola Road, Ghatlodia, Ahmedabad. Sir, Sub : Transfer of your case from erstwhile ITO, Ward- 4(2)(2), Ahmedabad to DCIT, Central Circle-8(1), Mumbai – in the case of Shri Gaurav Krishnakant Laddha & Others to centralize the case of Kamlesh Shah, PAN: AQHPS7700A regarding- --------------------------------------------------------- Kindly refer to the above captioned subject. Page 3 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 2. A search and seizure action u/s. 132(1) of the Income Tax Act, 1961 was conducted in the Shri Gaurav Krishnakant Laddha & Others on 17.04.2018 by DGIT(Inv.) Karnataka & Goa & further other search & seizure in your case along with others was carried out on 07.08.2019 by DGIT(Inv), WB, Sikkim & NER, Kolkata respectively. In the concurrence between the above two DGITs, it is proposed to centralize your case with the DCIT, Central Circle-8(1), Mumbai under the charge of PCIT(C)-4, Mumbai for the purpose of effective and coordinated investigation and assessments. This office is asked to pass an order under Section 127 of the Act transferring your case from the erstwhile ITO, Ward-4(2)(2) Ahmedabad to the DCIT, Central Circle-8(1), Mumbai. 3. Due to change in incumbent, I am directed to give you one more opportunity of being heard before your case is transferred and in this connection, you are required to submit your objections, if any with specific reasons, against the proposed transfer of your case to DCIT, Central Circle-8(1), Mumbai under the charge of Pr. CIT(Central)-4, Mumbai on or before 30.09.2020. In case nothing is heard from your side by the stipulated date, it will be presumed that your have nothing to submit in this matter. Yours faithfully, (Prem Meena) For Principal Commissioner of Income-tax-3,A’bad.” 2.4 On the very next day i.e. 23.09.2020, one another notice came to be issued by the office of the Principal Commissioner of Income Tax, Ahmedabad, which reads thus: “No.AHD/PCIT3/HQ/Cetr’n/KS/GKL Group./2020-21 Date23.09.2020 To, Kamlesh Shah C-11, Sarvodaynagar, Nr Sola Railway Crossing, Sola Road, Ghatlodia, Ahmedabad Sir, Sub: Transfer of your case from erstwhile ITO,Ward-4(2)(2), Ahmedabad To DCIT, Central Circle-8(1), Mumbai- in the case of Shri Gaurav Krishnakant Laddha & Others to centralize the case of Kamlesh Shah, PAN: AQHPS7700A regarding- ---------------------------------------------------------------- Page 4 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 Kindly refer to the above captioned subject. 2. A search and seizure action u/s. 132(1) of the Income Tax Act, 1951 was conducted in the Shri Gaurav Krishnakant Laddha & Others on 17.04.2018 by DGIT(Inv.), Karnataka & Goa & further other search & seizure in your case along with others was carried out on 07.08.2019 by DGIT(Inv), WB, Sikkim & NER, Kolkata respectively. In concurrence between the above two DGITS, it is proposed to centralize your case with the DCIT, Central Circle-8(1), Mumbai under the charge of PCIT(C)-4,Mumbai, for the purpose of effective and co-ordinated investigation and assessments. This office is asked to pass an order under section 127 of the Act transferring your case from the erstwhile ITO, Ward-4(2)(2), Ahmedabad to the DCIT, Central Circle-8(1), Mumbai, 3. Due to change in incumbent, I am directed to give you one more opportunity of being heard before your case is transferred, and in this connection, you are required to submit your objections, if any with specific reasons, against the proposed transfer of your case to DCIT, Central Circle-8(1), Mumbal under the charge of Pr. CIT(Central)-4, Mumbai on or before 25.09.2020.This is in suppression of the earlier letter dated 22.09.2020 on the same subject. In case nothing is heard from your side by the stipulated date, it will be presumed that you have nothing to submit in this matter. Yours faithfully, (Prem Meena) ITO(HQ)-3, A’bad. for Principal Commissioner of Income-tax-3, Abad” 2.5 The only difference between the aforesaid two notices is that in the notice dated 22.09.2020, time was given upto 30.09.2020 to lodge the objections whereas in the notice dated 23.09.2020, the time period was curtailed and reduced upto 25.09.2020. 2.6 The writ applicant filed his reply dated 28.09.2020 stating that he is engaged in the business of agriculture produces and many times in the past, his cash in huge amount came to be seized by the Department, from various places in different States. In short, what is sought to be conveyed by the writ applicant is that as he is engaged in a huge business of agricultural products, he Page 5 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 has to deal in cash in huge amount. 2.7 It is further the case of the writ applicant that he has nothing to do with the searched persons and therefore, in the name of effective and coordinated investigation and assessment, his case could not have been transferred from Ahmedabad to Mumbai in exercise of powers under Section 127 of the Act. 2.8 Ultimately, the final order came to be passed by the Principal Commissioner of Income Tax – 3, Ahmedabad, dated 30.09.2020. The same reads thus: “No.PCIT-3/HQ/Centralization/GKLaddha/2020-21 Date: 30.09.2020 ORDER UNDER SECTION 127(2) OF THE INCOME TAX ACT, 1961 In exercise of the powers conferred by sub-section (2)(a) of section 127 of the I.T. Act, 1961 and all other powers enabling me in this behalf, I the Principal Commissioner of Income Tax-3, Ahmedabad hereby transfer the following case, the particulars of which are mentioned in column nos. 2 & 3 of the schedule here under, from the Assessing Officer mentioned in column no. 4 to the Assessing Officer mentioned in column no. 5 working under the charge of Pr. Commissioner of Income Tax mentioned in column no. 6 thereof, due to centralization of case of Shri Gaurav Krishnakant Laddha & Shri Kamleshkumar J Prajapati Proprietor Of M/s Kamleshkumar Mahendrakumar & Co., keeping in the view the letters of DGIT (Inv), Karnataka & Goa bearing no. DGIT (Inv.) /Ble/Tech/14/Cent/2018-19/14 dated 08.10.2018 & letter No.F. No.14/Centralization/DG/T(Inv.)/2019-20 dtd 23.07.2020 and Pr. CIT(C)-4 Mumbai's letter No. PCIT (C)-A/Centralis/G K Laddha/2019- 20 19.03.2020 & letter No. PCIT(C)-4/Centralis/G K Laddha/2019-20 dated 27.08.2019. This transfer is made for the purpose of effective and coordinated investigation and assessments. :SCHEDULE: Sr. No Name of the assessee PAN From To Pr. CIT Charge (1) (2) (3) (4) (5) (6) 1. Shri Kamlesh AQHPS770 ITO,Wd-4(2) DCIT,CC- PCIT(C)- Page 6 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 Rajnikant Shah 0A (1), Ahmedabad (erstwhile ITO, Wd-4(2) (2), Ahmedabad) 8(1), Mumbai 4, Mumbai This order shall take effect from 30.09.2020. sd/- Jagdeep Goel Pr. Commissioner of Income-tax-3, Ahmedabad” 2.10 In such circumstances referred to above, the writ applicant is here before this Court with the present writ application. SUBMISSIONS: 3. We have heard Ms. Premlata Bansal, the learned senior counsel assisted by Mr. Hardik Vora, the learned counsel appearing for the writ applicant and Mr. M.R. Bhatt, the learned senior counsel appearing for the Revenue. 4. Many fold contentions have been raised on behalf of the writ applicant, however, the principal contention raised on behalf of the writ applicant is that in the absence of any cogent material to connect the writ applicant with the search undertaken at Mumbai in the case of Mr. Gaurav Laddha and one Mr. Kamleshkumar J. Prajapati, respectively the Principal Commissioner could not have exercised his powers under Section 127 of the Act to transfer the case of the writ applicant from Ahmedabad to Mumbai. Page 7 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 5. On the other hand, Mr. M.R. Bhatt, the learned senior counsel appearing for the Revenue, while opposing the present writ application, submitted that there is cogent material on record to prima facie indicate the nexus between the incriminating materials recovered during the course of the search carried out in the case of Mr. Gaurav Laddha and Mr. Kamleshkumar J. Prajapati at Mumbai with the present writ applicant. According to Mr. M.R. Bhatt, the materials on record would indicate that the writ applicant is an Angadia and is habitually involved in claiming ownership of the cash seized at various places across the country to be that of his own by filing false affidavits. Mr. Bhatt would submit that the aforesaid is evident from the order passed by the Principal Commissioner dated 30.09.2020 disposing of the objections raised by the assessee with regard to the proposed PAN Migration due to centralization. 6. Mr. Bhatt also invited the attention of this Court to the following averments made in the affidavit-in-reply filed on behalf of the Revenue. Para 5 to 9 read thus: “5. Without prejudice to the above, following facts may kindly be considered which would justify the order under Section 127 of the Act dated 30.09.2020. A proposal was received from the PCIT Central 4, Mumbai under letter dated 27.09.2019 for centralization of the case of assessee on account of search conducted on 17.4.2018 in cases of Shri G.K. Laddha and Brothers. A. Thereafter, as required under the provisions of law, the assessee was given an opportunity under show-cause dated 4.11.2019. Page 8 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 B. In response to the show cause notice the assessee file letter dated 14.11.2019 which reads as under: “In this connection I have objection for centralization of my case from ITO ward 4(2)(2) Ahmedabad to DCIT Central Circle (8)(1) Mumbai. Therefore, I am request to your honour that my case is not centralized from Ahmedabad to Mumbai.” As can be seen that no other ground /objection was raised by the assessee in his letter dated 14.11.2019. C. A copy of the objection raised by the assessee was forwarded to the Principal CIT, Central Circle 4 Mumbai under letter dated 5.11.2019. D. Meanwhile another proposal was received from PCIT Central 1, Kolkata for centralization of the case of the assessee with the DCIT Central Circle 2(3) Kolkata under letter dated 23.12.2019. This proposal was in consequence to the search and seizer action. E. As proposal was already received for centralization of the case of the assessee at Mumbai therefore, the clarificatory letter was written to the DCIT (Inv) Kolkata and also to CCIT Central (1), Mumbai in relation to the place at where the case was required to be centralized. F. The PCIT Central (4) Mumbai under his letter dated 19.3.2020 conveyed that the case is required to be centralized at Mumbai. However, as the letter dated 19.3.2020 was not clarifying as to whether the consent of DCIT (Inv) West Bengal/ Kolkata was taken or not, a letter dated 30.06.2020 was written to the PCIT, Central (4), Page 9 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 Mumbai with a request to furnish copy of consent letter /NOC given by the DCIT (Inv), West Bengal/Kolkata. G. The ADIT (Inv) HQ Technical 1, Kolkata under his Email dated 12.08.2020 conveyed that DCIT (Inv) West Bengal/ Kolkata had concurred for centralization of cases at Mumbai. A reply from DCIT (Inv) Karnataka and Goa was also received under letter dated 24.08.2020, conveying NOC from DGIT (Inv.) Karnataka. A letter dated 24.08.2020 intimating that objection raised by the assessee were considered by DCIT (Inv) Panji and it was requested that the case may be centralized with Central Circle, Mumbai. 6. Thus the procedure contemplated under the provisions of the Act has been fully complied with and assessee was given due opportunity to raise objections which were disposed of under order dated 30.09.2020. 7. It is submitted that subsequent to 27.08.2019 (letter at Annexure R.1) on account of restructuring of the department no further action was taken till the issue of notice dated 23.09.2020. Thus, a show- cause notice dated 23.09.2020 was issued to the assessee requesting to file his objections by 25.09.2020. Finally an order dated 30.09.2020 was passed centralizing the case of the assessee with PCIT Central (4), Mumbai. Thus, a detailed order dated 30.09.2020 was passed considering the objection as to why the case of the assessee is required to be centralized. Thus, the contention of the assessee that no reasons were provided is factually incorrect. 8. It is submitted that the contention of the petitioner that the order dated 30.09.2020 was not communicated is factually incorrect as the same had received and part of the present petition. 9. It is submitted that as per the settled legal Page 10 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 position transfer of case u/s 127 of the Act for the purpose of effective and coordinated investigation and assessment is the sufficient and proper reason. Therefore the contention of the assesse that the order u/s 127 is without any reason is not correct.” 7. In such circumstances referred to above, Mr. Bhatt prays that there being no merits in this application, the same may be rejected. ANALYSIS: 8. Having heard the learned counsels appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the writ applicant is entitled to claim any relief in the present writ application. 9. Section 124 of the Act relates to the jurisdiction of the Assessing Officer. Sub-section (1) of Section 124 reads as under : “124(1) Where by virtue of any direction or order issued under sub-section (1) or sub-section (2) of section 120, the Assessing Officer has been vested with jurisdiction over any area, within the limits of such area, he 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 or 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.” 10. Section 127 of the 1961Act corresponds to section Page 11 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 5(7A) of the Income-tax Act, 1922 (briefly “the old Act”) . Section 5(7A) may be set out: \"The Commissioner of Income-tax may transfer any case from one Income-tax 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 re- issue of any notice already issued by the Income- tax Officer from whom the case is transferred\". 11. The successor section under the Income-tax Act, 1961 is section 127 and the same may be set out: \"Transfer of cases from one Income-tax Officer to another:- (1) The 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 Income- tax Officer subordinate to him to another also subordinate to him, and the Board may similarly transfer any case from one Income- tax Officer to another. Provided that nothing in this sub-section shall be deemed to require any such opportunity to be given where the transfer is from one Income- tax Officer to another whose offices are situated in the same city, locality or place. (2) The transfer of a case under sub-section (1) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issue by the Income-tax Officer from whom the case is transferred. Explanation:-In this section and in sections 121 and 125, 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 Page 12 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 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\". 12. The section was amended by section 27 of Finance (No. 2) Act, 1967, and Section 127 since then stands as under: (1) \"The Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, where ever it is possible to do so, and after recording his reasons for doing so, transfer any case from any Income-tax Officer or officers also subordinate to him and the Board may similarly transfer any case from any Income-tax Officer or Income-tax Officers to any other Income-tax Officer or Income-tax Officers. Provided that nothing in this subsection shall be deemed to require any such opportunity to be given where the transfer is from any Income-tax Officer or Income-tax Officers to any other Income-tax Officer or Income-tax Officers and the offices of all such Income- tax Officers are situated in the same city, locality or place: Provided further that where any case has been transferred from any Income-tax officer or Income- tax Officers to two or more Income-tax Officers, the Income-taxers to whom the case is so transferred shall have concurrent jurisdiction over the case and shall perform such functions in relation to the said case as the Board or the Commissioner (or any Inspecting Assistant Commissioner authorised by the Commissioner in this behalf) may, by general or special order in writing, specify for the distribution and allocation of the work to be performed\". (2) The transfer of a case under subsection (1) may be made at any stage of the proceedings, and shall Page 13 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 not render necessary the reissue of any notice already issued by the Income-tax Officer or Income- tax Officers from whom the case is transferred. Explanation:-In this section and in sections 121, 123, 124 and 125, 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.\" 13. Subsequently, Section 127 has newly been substituted by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), for the then existing Section 127, with effect from 01.04.1988. Thereafter, by Finance (No.2) Act, 2014, (25 of 2014), by Section 4, Section 127 has been amended (w.e.f. 01.06.2013) consequent upon re-designation of and introduction of, Income Tax Authorities. The same reads as under: “127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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 Page 14 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,— (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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 Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal 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 reissue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is Page 15 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 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.” 14. Upon bare comparison of the aforesaid two provisions of the Act, one cannot loose sight of the difference between the aforesaid Sections. Section 124 is a provision defining “Jurisdiction of Income-Tax Officer”, wherein Sub-section (1) provides for specifications, by the Commissioner, of areas or persons, or classes of person or income or classes of income or cases or classes of cases over which an Income Tax Officer or a group of Income Tax Officers shall have jurisdiction. Whereas Section 127 can be attracted only when it is felt by the Commissioner of the CBDT or the authority competent that it is proper or appropriate to exercise power under the provisions in the interest of the Revenue and for proper adjudication of the tax liability or collection thereof. Moreover, the conferment and / or requirement of jurisdiction under Section 124(1) is made, inter alia with reference to certain cases or class of cases whereas Section 127(1) is necessarily made in connection with a ‘case’ and for Page 16 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 particular “assessee”. 15. Thus, Section 124(1) of the Act lays down the jurisdiction of the Assessing Officer, whereas under sub- section (1) of Section 127 of the Act, it is open to the concerned authority to transfer any case of an assessee from one Assessing Officer subordinate to him to any other Assessing Officer or Officers also subordinate to him. Section 124 (1) prescribes the jurisdiction of the assessing Officer in respect of an assessee on given principles and grounds mentioned therein, whereas section 127 is an exception to the aforesaid provision of section 124. Section 124 is a provision defining the jurisdiction in normal circumstances, whereas section 127 can be attracted only in circumstances where the Commissioner or the Central Board of Direct Taxes or the authority competent finds that it is proper to or appropriate to exercise power under the said provision in the interest of revenue and for proper adjudication of the tax liability or collection thereof. Thus, as a sequel of the aforesaid principle, it follows that the transfer of cases can be ordered for facilitating the task of effective investigation and for best and coordinated assessment. 16. Now, this power of the authority is hedged under Section 127(1) by two requirements which are that such order can be passed only after giving the assessee a reasonable opportunity of being heard and recording his reasons for doing so, wherever possible. Page 17 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 Under clause (a) of sub-section (2) of Section 127, where the Assessing Officer or the officers from whom the case is to be transferred and the Assessing Officer or the officers to whom the case is to be transferred are not subordinate to the same Principal Directors General, Director General, Principal Chief Commissioners, Chief Commissioners or Principal Commissioners or Commissioners, the transfer of case would be only when such authorities to whom the Assessing Officers concerned are subordinate are in agreement. In such a case, the Principal Director General, Director General, Principal Chief Commissioner or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred would pass an order after giving the assessee a reasonable opportunity of being heard and after recording the reasons wherever it is possible. As per subsection (3) of Section 127 however, the opportunity of hearing would not be necessary where the transfer of a case is from one Assessing Officer to another Assessing Officer and such officers are situated in the same city, locality or place. 17. Also, Section 127 of the Act is founded on three principles. First, is the requirement of transferring the assessment in appropriate cases which would have the element of public Page 18 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 interest. Secondly, the assessee cannot choose his Assessing Officer. It is evident that Section 124 of the Act which lays down the jurisdiction of the Assessing Officers ensures proper administration of assessments giving consistency, transparency and predictability on the question of which Assessing Officer would deal with which assessments. Nevertheless, an assessee cannot choose his Assessing Officer. At the same time, it is also recognised that transferring the assessment of an assessee at a far away place would lead to hardship and cause prejudice. It is in this context that the section 127 requires giving of a reasonable opportunity of being heard to the assessee and to record reasons for transferring the assessment. The Courts have also recognised that transferring an assessment of an assessee at a far away distance would certainly cause inconvenience and prejudice. It is in this respect that under sub-section (3) of Section 127, the requirement of hearing and recording of reasons for transferring an assessment is not made applicable when the assessment is being transferred from one Assessing Officer to another Assessing Officer, both being situated in the same city, locality or place. The third important element of Section 127 is when an assessment is being transferred from one Assessing Officer to another Assessing Officer, both of whom are not subordinate to the same head, the same could be done only with the agreement of the respective heads and if there is no such agreement, only by the Board or the authority that the Board may authorise in this behalf, by issuing notification in the Page 19 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 official Gazette. This last requirement would ensure that there is no discordance between the heads of the two Assessing Officers from where the assessment is transferred to where it is being transferred and in case there is a disagreement, such powers can be exercised only by the Board or an officer so authorised by the Board. While we are on the requirement of agreement between the two authorities, as referred to in clause(a) of sub-section (2) of Section 127, we may also notice that upon such agreement being achieved, it is the authority from whose jurisdiction the case is to be transferred, has to grant a reasonable opportunity of being heard to the assessee and then pass an order recording his reasons. This requirement would have two significant elements. One is that the authority under whose jurisdiction the assessment is being transferred has merely to show his agreement or disagreement, as the case may be. It is the authority from whose jurisdiction the case is being transferred, in addition to agreeing to transfer would have to grant an opportunity of hearing to the assessee and pass a reasoned order. The second element is that his agreement for transfer of the case cannot be equated with the decision to transfer. The decision can be reached only after hearing the assessee. He can form a final opinion that the case is to be transferred only after hearing the assessee, failing which, his decision would be ex- parte. Without the representation or involvement of the assessee, the requirement of hearing would then be rendered into an empty formality. [See Genus Electrotech Ltd. vs. Union of India and Others, (2018) 402 ITR 221 (Guj.)] 16. We have already noted the reasons for the transfer of assessment. We may refer to a decision rendered by a Page 20 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 Coordinate Bench of this Court in the case of Shree Ram Vessel Scrap P. Ltd. vs. Commissioner of Income-tax, reported in (2013) 355 ITR 255 (Guj), wherein this Court had upheld the stance of the Revenue that for effective and coordinated investigation, if otherwise established on the record, the same can be a good ground for transfer of a case. It was observed as under : “20. Section 127 of the Act, as already noticed, pertains to power to transfer cases. Sub-section (1) empowers the Director General, Chief Commissioner or the Commissioner after giving the assessee a reasonable opportunity of being heard wherever it is possible to do so and after recording his reasons, transfer any case from one more or more Assessing Officers subordinate to him to any other Assessing Officer or Assessing Officers also subordinate to him. Likewise, under sub-section (2) of Section 127 after following similar procedural requirements, it is open for the Director General, Chief Commissioner or Commissioner to transfer a case from one Assessing Officer to another who is not subordinate to him in agreement with the authority to whom he may be subordinate. Sub-section (3) of Section 127 provides that nothing contained in sub-section (1) or sub- section (2) shall be deemed to require giving of any such opportunity where the transfer is from any Assessing Officer to another and offices of all such officers are situated in the same city, locality or place. Sub-section (4) of Section 127 provides that 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-issuance of any notice already issued by the Assessing Officer from whom the case is transferred. 21. Exercise of power under sub-section (1) and sub- section (2) of the Act comes with certain procedural requirements namely, of granting a reasonable opportunity of being heard in the matter wherever it is possible to do so, of recording of reasons for passing such order and as provided by the Supreme Court in Ajanta Industries (supra) communicating such reasons also to the assessee. Subject to fulfillment of such procedural requirements, the authority under Section 127 enjoys considerable discretion while exercising the Page 21 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 power contained in sub-section (1) or sub- section (2) thereof. Such discretion of course has to be exercised for achieving the public purpose and not for any arbitrary or irrelevant consideration. On the other hand, it can also be seen that transfer of a pending case from one Assessing Officer to another outside of a city, locality or place is likely to cause considerable inconvenience to an assessee. Therefore, even though an assessee may not have a vested right to insist that his assessment be completed only at one place or by a particular Assessing Officer, nevertheless, the reasons for transfer must be weighty enough to offset against such personal inconvenience of an assessee. In exercise of power under Section 127 thus we are concerned with larger public interest on one hand and personal inconvenience on the other. However, as long as such powers are exercised bona fide, for public purpose and in the interest of Revenue, the role of the Court to dissect such reasons and to come to a different conclusion would be extremely limited. It is by now well settled that judicial review against the administrative order in exercise of writ jurisdiction, the Court is concerned with the decision making process and not the final decision itself. 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 malafide either in fact or in law.” 18. We may also refer to and rely upon the judgment in the case of General Exporters v. CIT [2000]241 ITR 845 (Mad.), wherein the Madras High Court after an exhaustive review of various judgments of different High Courts, has held that facilitating of investigation or coordinate investigation is a substantial ground for transfer of case. The same reads as under: \"In Jharkhand Mukti Morcha v. CIT [1997] 225 ITR 284, the Ranchi Bench of the Patna High Court, after referring to Sameer Leasing. Co. Ltd. v. Chairman, CBDT [1990] 185 ITR 129 (Delhi); V.K. Steel Industries (P.) Ltd. v. Asstt. CIT [1991] Page 22 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 187 ITR 403 (AP), and Vijayasanthi Investment (P.) Ltd. v. Chief CIT [1991] 187 ITR 405 (AP), preferred to follow the decision in Assam Surgical Co. v. CBDT [1984] 145 ITR 400 (Gauhati) and Bhatia Minerals v. CIT [1993] 200 ITR 591 (All.), as against the view of the Andhra Pradesh High Court in Vijayasanthi Investments (P.) Ltd. v. Chief CIT [1991] 187 ITR 405 and further held thus: ‘Apart from the Delhi and Allahabad High Courts, the Gauhati High Court in the case of Assam Surgical Co. v. CBDT [1984] 145 ITR 400 , the Rajasthan High Court in the case of Shri Rishikul Vidyapeeth v. Union of India [1982] 136 ITR 139 and the Calcutta High Court in the case of Dwarka Prasad Agarwalla v. Director of Inspection [1982] 137 ITR 456 have held that facility of investigation or co- ordinated investigation is a substantial ground for transfer from one officer to another officer.’ 19. So far as exercise of discretionary powers of the authority to transfer cases is concerned, a Division bench of the Bombay High Court, in the case of Aamby Valley Ltd. vs. Commissioner of Income-tax, reported in (2014) 41 taxmann.com 15 (Bombay), held as under : “8. We have considered the submissions. The power to transfer cases under Section 127 of the Act is to be undoubtedly exercised after following the principles of natural justice. However, the discretion of the authority to transfer a case has to be examined on the touchstone of the same not being arbitrary and/or perverse and/or mala fide. If there are reasons in the impugned order which indicates due application of mind to reach a view to transfer a case from one jurisdiction to another, then this Court will not interfere with the discretion of the administrative authority who transfers the case. This discretion is vested by the Act in high ranking officers viz. Commissioner of Income Tax and the necessity to transfer a case from the jurisdiction of one officer to another officer for better administration of the Act could be diverse and impossible to enumerate. It is for the above reason that Section 127 of the Act has not limited the exercise of jurisdiction by specifying any circumstances before the authority can exercise his Page 23 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 powers to transfer the case. One more fact which cannot be lost sight of is that an assessee cannot choose his Assessing Officer and, therefore, if the transfer order does indicate some valid reasons to justify the transfer and such reasons are neither perverse or arbitrary or malafide this Court would not interfere with the reasonable exercise of discretion.” 20. The Delhi High Court, in the case of Vishal Kumar vs. Commissioner of Income, reported in (2014) 44 taxmann.com 180 (Delhi), held as under : “10. The assessee also has the opportunity to present his case and be subject to a regular assessment, in front of the Assessing Officer to whom jurisdiction has been transferred. No prejudice is caused by the mere fact of a Section 127 order, such that detailed reasons and specific grounds are required to be provided, as the petitioner today argues. Equally, the show-cause notice dated 9.10.2013 granted the petitioner in this case an opportunity of being heard. No oral representation was made by the petitioner on that date, nor was any request for another date made to the Commissioner. Written objections, however, were preferred, which were considered and disposed off by the impugned notice in this case. The argument, thus, that no chance to effectively represent the case was provided has no merit.” 21. In Pannalal Binraj vs. Union of India, reported in (1957) 31 ITR 565, the Supreme Court observed while upholding the power of transfer that, inconvenience to the assessee or likelihood of misuse of the provision could not be a ground to declare the said provision to be void, but if there was abuse of the power, appropriate remedy could be taken. The relevant observations reads thus : “It follows, therefore, that Section 5(7A) of the Act is not violative of Article 14 of the Constitution and also does not impose any unreasonable restriction on the Page 24 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 fundamental right to carry on trade or business enshrined in Article 19(1)(g) of the Constitution. If there is any abuse of power it can be remedied by appropriate action either under Article 226 or under Article 32 of the Constitution and what can be struck down is not the provision contained in Section 5(7A) of the Act but the order passed thereunder which may be mala fide or violative of these fundamental rights. This challenge of the vires of Section 5(7A) of the Act, therefore, fails.” 22. In light of the aforesaid judicial pronouncements, we are of the view that facility of investigation or coordinated investigation can be a substantial ground for transfer from one officer to another Officer, more particularly, when the department has some material to establish nexus of the writ applicant with the searched person. One cannot overlook the fact that the writ applicant is suspected to be involved in dubious transactions, whereby as an angadia is found to be habitually claiming ownership of cash seized at various places across the country. In fact, the request seeking transfer has been made from two offices of the department ie. PCIT, Mumbai and Kolkata. It appears from the materials on record that the main purpose of transfer on the ground of centralization of cases is to investigate the dubious transactions of the writ-applicant with various related entities during the relevant period. At this stage, we may refer to the order disposing of the objections raised by the assessee with regard to transfer passed by the Principal Commissioner dated 30.09.2020, which reads thus: “In consequence to search and seizure action u/s. 132(3) of Page 25 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 the IT Act conducted in the case of Shri Gauray Krishnakant Laddha & Shri Kamleshkumar) Prajapati, Proprietor of M/s Kamleshkumar Mahendrakumar & Co. on 17.04.2018 by the DGIT(Inv), Mumbal centralization of above mentioned assessee with DCIT, Central Circle-8(1), Mumbai in the charge of Pr.CIT(Central)-4, Mumbai was proposed to facilitate proper inquiry and coordinated investigation. Accordingly, this office vide letter No PCIT-4/HQ/Centralization/KS/G K Laddha Group/2019-20 dtd 04.11.2015 gave an opportunity of being heard to the assessee conveying the proposed transfer of his case. 2 In response to the above letter dtd 04112019, the assessee submitted his reply dated 14.11.2019 objecting to the proposal of pan transfer. Further, due to change of incumbent, one more opportunity was offered to the assessee vide letter No No AHD/PCIT3/HQ/Cent’n /KS /G K L Group./2020-21 dtd 23.09.2020 to furnish his submission by 25.09.2020 The assessee submitted his reply via email dtd 28.09.2020, again objecting to the proposal of centralization of his case with DCIT, Cent. Cir-8(1), Mumbal under the charge of PCT(C)-4, Mumbai. 4. The objection raised by the assessee has been considered but the same is not acceptable. It is seen that the assessee is an angadia and involved in practice of claiming ownership of the cash intercepted at various places as his own by submitting false affidavits. In such circumstances, the objection of the assessee that the case may not be centralized as his accounts and other relevant documents are at Ahmedabad is not acceptable. The case is being centralized at one place i.e. with PCIT(Central)-4, Mumbai to facilitate proper inquiry and coordinated investigation. 5 In view of the above facts, the objection raised by the assessee against the proposal for PAN migration hereby stands rejected.” 23. We may only observe that the transfer order passed under Section 127 of the Act is more in the nature of an administrative order rather than a quasi-judicial order and the assessee cannot have any right to choose his Assessing Authority, as no prejudice can be said to have been caused to the assessee depending upon which authority of the department passes the Assessment Order. The assessee can Page 26 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 only be concerned with getting an opportunity of hearing before the concerned Assessing Authority and adduce his evidence and make his submissions before the concerned Assessing Authority. The Income Tax department has recently introduced a scheme of Faceless Assessments with a view to avoid personal hearing and physical interaction of the assessee and the Assessing Authority altogether. The assessee need not even know the name of the Assessing Authority who will deal with his case. 24. The learned counsel appearing for the writ applicant placed strong reliance on a decision of this High Court in the case of Anuben Lalabhai Bharwad Vs. Principal Commissioner of Income Tax reported in 2016 (289 CTR 49) (Guj.), wherein this Court took the view that not only a reasonable opportunity of hearing should be given, there should be sufficient materials on record to show some nexus of the assessee with any group at whose premises search is undertaken. There need not any debate as regards the principles of law explained by this Court. In the case on hand also there is material to show nexus of the writ applicant with the related entities. 25. Having regard to the position of law as discussed above and also the other materials on record, we are of the view that we should not interfere with the impugned order of transfer passed by the respondent in exercise of powers under Section 127(2) of the Act. The power of transfer of cases may have to be exercised in proper case when sufficient materials on record justify such action. As held by this Court in the case of Hindustan M.I. Swaco Limited (2016) 72 taxmann.com 14 (Guj.), “this is, Page 27 of 28 C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 however, not to suggest that the transfer of cases for effective investigation and coordination can be resorted to only in cases of assessee, who are subjected to search operation. Such requirement may arise in other circumstances also”. 26. Before we close this judgment, we must observe that the question whether circumstances warrant transfer or not is a matter for consideration and the decision by the Commissioner. The Commissioner in the case on hand upon due consideration of all the relevant aspects of the matter is satisfied that the case of the writ applicant should be transferred for the purpose of effective and coordinated investigation and assessment. Thus, we are of the opinion that looking to facts and circumstances of the case, where administrative exigencies can be adequately/ comprehensively addressed, such a discretion should not be interfered with under Article 226 of the Constitution. We do not find any patent error of law or any error apparent on the face of the record. The impugned order cannot be said to be ex facie perverse. In the result, this writ application fails and is hereby rejected. Notice is discharged. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) Y.N. VYAS Page 28 of 28 "