SUMANDEEP VIDYAPITH THROU REGISTRAR CHANDRAMANI BHAGWAN MORE V. COMMISSIONER OF INCOME TAX (EXEMPTION)

SCA/11623/2020

AI Insights

The case revolves around the transfer of jurisdiction over the assessment of Sumandeep Vidyapith from ACIT (E), Circle-2, Ahmedabad to DCIT, Central Circle-1, Vadodara, under Section 127(2)(a) of the Income Tax Act, 1961. The writ-applicant challenged the transfer, citing reasons such as the absence of a Document Identification Number (DIN), non-applicability of Sections 153A/153C, and the lack of valid reasons for centralization. The court, after considering the objections and the purpose of the transfer for a coordinated investigation, upheld the transfer order.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 750077 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 22-01-2021
• Assessment Year: misc
• Other Referred Cases: Ajantha Industries vs. Central Board of Direct Taxes, Ramswaroop vs. Commissioner of Income-tax-II, Nagpur, Anuben Lalabhai Bharwad vs. Principal Commissioner of Income-tax-3, Principal Commissioner of Income Tax (Central) vs. Rohtas Project Ltd., Shree Ram Vessel Scrap P. Ltd. vs. Commissioner of Income-tax, 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; MAUNA BHATT
• Assessee Lawyers: DARSHAN PATEL
• Keywords: Centralization of Cases; Coordinated investigation; Income Tax; Show cause notice; Transfer of proceedings
• Section: 153A; 153C; 127(2)(a)

Judgement Text

"C/SCA/11623/2020 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 11623 of 2020 ================================================================ SUMANDEEP VIDYAPITH THROU REGISTRAR CHANDRAMANI BHAGWAN MORE Versus COMMISSIONER OF INCOME TAX (EXEMPTION) ================================================================ Appearance: MR DARSHAN R PATEL for the Petitioner(s) No. 1 MR. M.R.BHATT, SR.ADVOCATE with MRS MAUNA M BHATT for the Respondent(s) No. 1 ================================================================ CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE ILESH J. VORA Date : 22/01/2021 ORAL ORDER (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 following reliefs : “(A) Issue a writ of certiorari and/or a writ of mandamus and/or any other writ, direction or order to quash and set aside the impugned notices dated 16.07.2020 and 29.07.2020 annexed hereto at Annexure-A and Annexure-C respectively along with impugned consequential order under Section 127(2)(a) of the Income Tax Act, 1961, dated 17.08.2020 at Annexure-F; (B) Pending admission, hearing and disposal of this petition, ad-interim relief be granted and the Respondent be ordered to restrain from enforcing compliance of the Page 1 of 28 C/SCA/11623/2020 ORDER impugned notices dated 16.07.2020 and 29.07.2020 annexed hereto at Annexure-A and Annexure-C respectively along with consequential order under Section 127(2)(a) of the Income Tax Act, 1961, dated 17.08.2020 at Annexure-F; (C) Award the costs of this petition. (D) Grant such other and further reliefs as this Hon'ble Court deems fit.” 2. The subject matter of challenge in the present litigation is to the order dated 17th August 2020 of transfer of the proceedings under Section 127(2)(a) of the Income Tax Act, 1961 (for short, 'the Act 1961') from the ACIT (E), Circle-2, Ahmedabad, to the DCIT, Central Circle-1, Vadodara. 3. The show-cause notice dated 16th July 2020, calling upon the writ-applicant to show-cause as to why the proceedings should not be transferred under Section 127(2) of the Act reads thus : “To, M/s.Sumandeep Vidyapeeth Piparia, Waghodia, Vadodara 391760. Sir, Sub: Show Cause notice along with Opportunity letter in respect of proceedings U/s 127(2) of the I.T. Act, 1961 and Centralization of case in connection with Search conducted in M/s Sumandeep Group of Baroda – reg. Page 2 of 28 C/SCA/11623/2020 ORDER 2. In connection with the above, it is to inform you that your case is required to be centralized for completing assessment proceedings U/s. 153A/153C of the I.T. Act, 1961 in connection with the search operation conducted in the case of M/s Sumandeep Group of Baroda. It is therefore proposed to transfer the jurisdiction over your case from the ACIT(E), Cir-2, Ahmedabad to the DCIT, Central Circle-1, Vadodara as well as transfer of your PAN to the DCIT, Central Circle-1, Vadodara. 3. As per ITBA database, your address is at Waghodia, Vadodara-391760, and ITBA database shows that the assessee is being assessed with ACIT(E), Circle-2, Ahmedabad under the administrative control of Commissioner of Income Tax (E}, Ahmedabad. 4. In light of the above facts, it is to inform you that proceedings to transfer your PAN and passing Order U/s 127(2) of the Act are under progress in your case. In this connection, you are given opportunity of being heard in this matter and requested to either submit your reply through email or speed post or attend before the undersigned in person or through an Authorised Representative on 28/07/2020 at 03:30 P.M. in this office to present your case. In case of non-compliance, it will be presumed that you have no objection to transfer your PAN to the DCIT, Central Circle-1, Vadodara and to pass Order U/s 127(2) of the I.T. Act in your case and the matter will be decided on merits and on the basis of documents available on record. Page 3 of 28 C/SCA/11623/2020 ORDER (RITESH PARMAR) Commissioner of Income Tax (Exemptions), Ahmedabad” 4. The Corrigendum to the aforesaid dated 29th July 2020 reads thus : “To, The Principal Officer, M/s.Sumandeep Vidyapeeth Piparia, Waghodia, Vadodara 391760. Sir, Sub: Opportunity letter alongwith disposal of Objection raised in response to this office letter dated 21/07/2020 in respect of Centralization of case proceedings U/s 127(2) of the I.T. Act, 1961 in the case of M/s Sumandeep Vidyapeeth, Waghodiya, Vadodara - reg, Kindly refer to the above. 2. In connection with the above, it is regret to state that in para-1 of this office letter dated 16.07.2020 bearing No.CIT(E)/Ahd/Sumandeep Gr/127(2)/Order/2020-21 and DIN No.ITBA/COM/S/91/2020-21/1027547982(1) dated 21/07/2020, there is an inadvertent mistake in writing words “....completing assessment proceedings u/s 153A/153C of the I.T. Act 1961 in connection with the search operation conducted in the case of M/s Sumandeep Group of Baroda.” It is accordingly requested to kindly ignore the contents of this para. Page 4 of 28 C/SCA/11623/2020 ORDER 3. Your case is proposed to be centralized with other group cases for co-ordinated investigation and as per provisions of section 127(2)(a) of the I.T. Act, opportunity of being heard in this matter and is hereby provided to you. It is requested to either submit your reply through email or speed post or attend before the undersigned in person or through an Authorised Representative on 06/08/2020 at 03:30 P.M. in this office to present your case. In case of non- compliance, it will be presumed that you have no objection to transfer your PAN to the DCIT, Central Circle-1, Vadodara and to pass Order U/s 127(2) of the I.T. Act in your case and the matter will be decided on merits and on the basis of documents available on record. (RITESH PARMAR) Commissioner of Income Tax (Exemptions), Ahmedabad” 5. The writ-applicant lodged his objections to the above referred show-cause notice vide communication dated 6th August 2020, essentially raising the following issues : (i) Documents issued without Document Identification Number (DIN) are invalid. (ii) Provisions of Section 153A/153C are not applicable in the case on hand. (iii) Absence of valid reason for Centralization. Page 5 of 28 C/SCA/11623/2020 ORDER (iv) Inter-city transfer of cases during Covid-19 pandemic is not permitted by CBDT. (v) Being a Trust case, it should be assessed in the specialized charge of 'Exemptions'. (vi) This High Court has stayed the scrutiny assessments for the Assessment Years 2016-17 and 2017-18. (vii) Inconvenience and hardship would be caused on shifting from Ahmedabad to Vadodara. 6. The aforesaid objections came to be overruled by the Commissioner of Income Tax (Exemption), Ahmedabad, vide communication dated 14th August 2020. 7. Ultimately, the final order under Section 127(2)(a) of the Act came to be passed dated 17th August 2020. The order reads thus : “ORDER UNDER SECTION 127(2)(a) OF THE INCOME TAX ACT, 1961 In exercise of the powers conferred by the sub-section (2) of Section 127 of the Income-tax Act, 1961 and all other powers enabling me in this behalf, I, the Commissioner of Income Tax (Exemptions), Ahmedabad, hereby transfer the case along with its PAN, the particulars whereof are mentioned in Column No. 4 & 5 of the schedule appended hereunder, from the Assessing Officer mentioned at Column No. 4 to the Assessing Officer mentioned at Column No.4 to the Assessing Officer mentioned at Column No.5 thereof. Page 6 of 28 C/SCA/11623/2020 ORDER Sr. No. Name of the Assessee PAN From Assessing Officer To Assessing Officer 1 2 3 4 5 1 M/s Sumandeep Vidyapeeth AAATK4485H ACIT(E), Circle- 2, Ahmedabad [A.O. Code: DLC-CA-209-1] DCIT, Central Circle-1, Vadodara [A.O. Code: DLC-CC-97-1] 2. This order shall take effect from 17/08/2020. 3. The assessee has opposed the transfer of this case but the submissions made by it were duly considered and rejected. The reasons have been separately communicated vide this office letter No.CIT(E)/Ahd/Sumandeep Gr/127(2)/2020-21 /762 dated 14.08.2020. 4. This order is generated without Document Identification No. (DIN) as the functionality of sending letter/ order to the assesses U/s 127(2)(a) is not available in the ITBA system till date. (RITESH PARMAR) Commissioner of Income Tax (Exemptions), Ahmedabad” 8. In view of the aforesaid, the writ-applicant is here before this Court with the present writ-application. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT : 9. Mr.Darshan Patel, the learned counsel appearing for the writ-applicant, has vehemently submitted that the impugned Page 7 of 28 C/SCA/11623/2020 ORDER order is erroneous in law as the same is based on non-existent facts and incorrect reasons. He would submit that the grounds assigned by the department for transfer of the case are vague. It is submitted that although the reason of coordinated investigation has been assigned by the department to justify transfer, yet the same does not specifically find place or there is no specific reference of the same in the show-cause notice. 10. Mr.Patel, in support of his aforesaid submission, has placed reliance on the following decisions : 1. Ajantha Industries vs. Central Board of Direct Taxes, (1976) 102 ITR 281 (SC); 2. Ramswaroop vs. Commissioner of Income-tax-II, Nagpur, (2016) 70 taxmann.com 5 (Bombay); 3. Anuben Lalabhai Bharwad vs. Principal Commissioner of Income-tax-3, (2016) 72 taxmann.com 178 (Gujarat); 4. Principal Commissioner of Income Tax (Central) vs. Rohtas Project Ltd., (2018) 100 taxmann.com 384 (SC). 11. In such circumstances referred to above, Mr.Patel prays that there being merit in his writ-application, the same be allowed and the impugned order may be quashed and set-aside. SUBMISSIONS ON BEHALF OF THE REVENUE : 12. On the other hand, this writ-application has been vehemently opposed by Mr.M.R.Bhatt, the learned senior Page 8 of 28 C/SCA/11623/2020 ORDER counsel, assisted by Mrs.Mauna Bhatt, the learned senior standing counsel appearing for the Revenue. Mr.Bhatt would submit that under the communication dated 29th July 2020, a Corrigendum was issued clarifying that though there was no search proceedings, the case was proposed to be centralized with the other group cases for coordinated investigation as per the provisions of Section 127(2)(a) of the Act. An opportunity of hearing was granted. All the objections raised by the writ- applicant came to be considered under the communication dated 14th August 2020. The following objections of the writ-applicant have been seriatim considered in the order disposing of the objections : (a) Absence of document identification number (DIN) : The aforesaid aspect has been clarified stating that urgent and important communication cannot be withheld on account of technical problems. (b) Absence of search proceedings : The judgment of this Court rendered in the case of Hindustan M.I. Swaco Limited (2016) 72 taxmann.com 14 (Guj.) (Para 15 of the judgment) has been referred to hold that the transfer of cases for effective investigation and coordination can be resorted to even in the absence of search proceedings. The provisions of Sections 153A/153C respectively of the Act are not applicable in the case on hand. (c) Hardship due to intercity transfer : Page 9 of 28 C/SCA/11623/2020 ORDER The writ-applicant is situated at Vadodara. The writ- applicant's assessment was initially framed by the Exemption Circle at Ahmedabad and now sought to be transferred to the Central Circle, Vadodara. Therefore, no question of hardship. (d) Assessment in specialized charge : The writ-applicant contended that since it was a charitable trust, it was required to be assessed by a specialized jurisdiction, viz. Exemption. This contention was rejected on the ground that it cannot be said that the officers of exemption charge are only capable of undertaking such assessment. It is also incorrect to say that the officers of the central charge where the case was being proposed for transfer are not well versed with the provisions relating to the charitable trusts. It is also recorded that in view of the Faceless Assessment Scheme, 2019, the scrutiny assessments are now to be done either by the Regional E- Assessment Centre or by the central charge and now no assessment could be made by the ACIT (Exemption). 13. In such circumstances referred to above, Mr.Bhatt prays that there being no merit in this writ-application, the same may be rejected. ANALYSIS : 14. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether the authority Page 10 of 28 C/SCA/11623/2020 ORDER concerned committed an error in passing the order of transfer under Section 127 of the Act. 15. Section 124 of the Act pertains 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.” 16. Section 127 of the Act pertains to the power to transfer cases. It reads as under : “127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner Page 11 of 28 C/SCA/11623/2020 ORDER 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 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; Page 12 of 28 C/SCA/11623/2020 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 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 Page 13 of 28 C/SCA/11623/2020 ORDER 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.” 17. 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. This power is hedged 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. As per sub-section (3) of Section 127 however, the opportunity of hearing would not be necessary where the transfer of a case is from an Assessing Officer to another Assessing Officer and such officers are situated in the same city, locality or place. 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 Page 14 of 28 C/SCA/11623/2020 ORDER an order after giving the assessee a reasonable opportunity of being heard and after recording the reasons wherever it is possible. 18. 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 interest. Secondly, the assessee cannot choose his Assessing Officer. 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 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 Page 15 of 28 C/SCA/11623/2020 ORDER 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 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.)] Page 16 of 28 C/SCA/11623/2020 ORDER 19. We have already noted the reasons for the transfer of assessment. We may refer to a decision rendered by a 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 coordinative 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 Page 17 of 28 C/SCA/11623/2020 ORDER 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 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 Page 18 of 28 C/SCA/11623/2020 ORDER 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 mala fide either in fact or in law.” 20. In the case of Aamby Valley Ltd. vs. Commissioner of Income-tax, reported in (2014) 41 taxmann.com 15 (Bombay), a Division Bench of the Bombay High Court 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 Page 19 of 28 C/SCA/11623/2020 ORDER 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 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 mala fide this Court would not interfere with the reasonable exercise of discretion.” 21. 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, Page 20 of 28 C/SCA/11623/2020 ORDER 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.” 22. 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 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. 23. 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, Page 21 of 28 C/SCA/11623/2020 ORDER we may refer to the reasons assigned by the Commissioner of Income Tax (Exemption) for centralization while disposing of the objections raised by the writ-applicant. “Vide your above referred letters, you have brought to attention the provisions of section 127(1) which contain a clear mandate to record valid and justifiable reasons for transfer of cases. In this regard, you have relied upon various judicial pronouncements including the judgment of Apex Court in the case of PCIT (Central) vs. Rohtas Project Limited (100 Taxman 384). The Judgments cited by you are not discussed in this letter as none of these judgments have been contravened. There are valid and justifiable reasons as per I.T. Act for transfer of your case which is mentioned in subsequent Para Nos. 4.1 to 4.7. Further, following the principles of natural justice, you were provided opportunity of being heard before finalization of proceedings U/s 127(2) (a) of the Act. 4.1 According to you, the reason of co-ordinated investigation in your case is vague. It is claimed that you were not carrying out any business activities and the trustees are not connected with any group (including any Sumandeep Group} as they are not involved in the functioning of Sumandeep University. For countering your claim, it would be appropriate to discuss the background of your case. It is pertinent to mention that information was received from the Office of the Director in-charge and Special Director, ACB Gujarat, Ahmedabad that a raid by Anti- Corruption Bureau in the case of Sumandeep Vidhyapith Page 22 of 28 C/SCA/11623/2020 ORDER was carried out on 27/02/2017. It was also intimated that two agents of Dr.Mansukhbhai Shah, the trustee and president of Sumandeep Vidhyapith Trust were caught red handed accepting the bribe of Rs.20 lakh in cash from the parent of a final year medical student. Accordingly, the ACB, Gujarat has communicated to this office and the office of the Pr.CCIT(Guj), Ahmedabad for consideration to cancel the registration of the K.M.Shah Trust, Managing Sumandeep Vidhyapith (deemed University). 4.2. It was also highlighted by the office of the Director in- charge and Special Director, ACB Gujarat, Ahmedabad that during the course of search action, certain incriminating records i.e. possession of FDRs of Rs.43,63,70,961/- and blank signed cheques of Rs.101,57,42,360/- and also other documents were found. It was also intimated that during post search investigation, it was further found that Shri Mansukh Shah and his family members have earned profits from stock market by trading in penny stocks, Such tax exempt capital gains amounted to Rs.27.57 crores from F.Y. 2012-13 to F.Y. 2015-16. In view of above, it was referred to the Investigation Wing of Income Tax Department at Vadodara for necessary investigation. 4.3. Necessary enquiry was carried out by the Investigation Wing of Income Tax Department at Vadodara on the Incriminating materials found (during the course of search carried out by ACB, Gujarat), The DDIT (Inv,), Vadodara reported that in respect of issue of Long Term Capital Gains shown by Shri Mansukhbhai Shah, the Page 23 of 28 C/SCA/11623/2020 ORDER trustee and President of Sumandeep Vidhyapith and his family members in various years was examined and found that the individuals of the assessee group had made the sham transactions. The unaccounted money in the guise of exempted long term capital gain had been credited in the books of accounts. He further informed that the total bogus LTCG of Rs 42.16 crore (shown in the cases of various individual cases from F.Y. 2012-13 to 2016-17) was suggested to be treated as unexplained cash credits u/s. 68 of the I.T. Act, 1961. 4.4 It is pertinent to note that the assessee had challenged the action of ACB, Gujarat before the appellate authorities and the issue was finally settled against the assessee by the Hon'ble Supreme Court. While deciding the criminal case registered by ACB, Gujarat, vide Prevention of Corruption Act against the Trustees of Sumandeep Vidhyapeeth, Hon'ble Supreme Court vide Criminal Appeal No.989 of 2018, 27/04/2020 has allowed the appeal of the Gujarat State. Relevant paras of said judgment are extracted as under : “51. In the present case, on a prima-facie evaluation of the statements of the Gaurav D. Mehta (the Vice- Chancellor); Mr.Pragneshkumar Rameshbhai Trivedi (account officer of Sumandeep Vidhyapith University) and other witnesses it appears that the present respondent was the final authority with regard to the grant of admission, collection of fees and donation amount. Page 24 of 28 C/SCA/11623/2020 ORDER 52. The charge sheet specifically discloses that the respondent allegedly was collecting certain extra amount over the prescribed fees on the pretext of allowing the students to fill up their examination forms. Therefore, paying the respondent the alleged amount was a condition precedent before filling up the forms, to appear for the examinations. Specifically, in the complaint, it was alleged that the respondent had demanded an amount of Rupees Twenty Lakhs to be paid to the co-accused Bharat Savant, failing which the daughter of the complainant would not have been permitted to appear in the examination. In our opinion, the fact that there were a large number of cheques which were found during the raid is more than sufficient to establish a grave suspicion as to the commission of the alleged offence. 53. The respondent has vehemently stressed upon the fact that he is admittedly a trustee of the “Sumandeep Charitable Trust” and has no connection with the “Sumandeep University”. But, it ought to be noted that the courts below have failed to analyze the connection between the trust and the University, as well as the relationship of the respondent with the university. Prima facie, a grave suspicion is made out that the respondent was rendering his service by dealing with the students and the examination aspect of the University. But a detailed appreciation of evidence is called for before one can reach a Page 25 of 28 C/SCA/11623/2020 ORDER conclusion as to the exact position of the respondent vis-a-vis the University.” From above, it is clearly evident that even the Apex Court has decided the issue against the assessee and has highlighted the nexus of various persons intrinsically linked with the activities of the Trust. Such observation of Apex Court itself calls for co-ordinated investigation in this case. In view of above, centralization of assessee trust is required to be made for coordinated investigation. 4.5. From the above, it is prima facie evident that transactions of assessee trust and trustees including Shri Mansukhbhai Shah are interlinked (with Sumandeep Vidhyapeeth). Such transactions can be analysed and investigated by examining the documents and through bank and other enquiries together and not separately at different places. Therefore, a co-ordinated investigation is necessary in this case. The word 'co-ordinated' means harmonious in action. All the cases should be considered together at one place so that harmonious investigation be undertaken to arrive at just assessment. The words 'co-ordinated investigation' of the case are therefore, not vague and centralization of the cases with one assessing officer is essential for better co-ordinated investigation. 4.6. Further, it is not out of place to mention here that the purpose of centralization of cases is to investigate the transactions among the various related entities during the relevant period and to assess income of all the persons Page 26 of 28 C/SCA/11623/2020 ORDER concerned for the assessment years in question. The purpose of a Section 127 transfer is not to subject the concerned assessees to any tax liability, or even undergo any other obligation (onerous or otherwise), but rather, only to direct that the regular assessment (as is carried out in the usual course of events) will be conducted by an AO other than the jurisdictional AO in order to ensure coordinated investigation only. Indeed, the very purpose of the Section 127 order in this case is to ensure that an orderly and coordinated investigation takes place while conducting the assessment of the various (and possibly related) entities involved. Provisions of Section 127 are only for necessitating the transfer of the assessee trust for jurisdictional purpose and not for adjudicating the issues involved.” 24. 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 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. Page 27 of 28 C/SCA/11623/2020 ORDER 25. We have also looked into the judgments relied upon by Mr.Darshan Patel, the learned counsel appearing for the writ- applicant. However, none of the judgments are of any avail to the writ-applicant. 26. In the overall view of the matter, we are convinced that no case is made out for interference. 27. In the result, this writ-application fails and is hereby rejected. Notice stands discharged. Interim relief, if any, earlier granted, stands vacated forthwith. (J. B. PARDIWALA, J.) (ILESH J. VORA, J.) /MOINUDDIN Page 28 of 28 "