Advs v. Principal Commissioner Of Income Tax-7 &Anr

$~38 *IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 12003/2019, C.M.A PPL. 49112-49113/2019 versus PRINCIPAL COMMISSIONER OF INCOME TAX-7 &ANR. Respondents Through:Mr. Raghvendra singh, Sr. Standingcounsel with Ms. Easha Kadian,Standing counsel. CORAM: HON'BLE MR. JUSTICE VIPIN SANGHIHON'BLE MR. JUSTICE SANJEEV NARULAO R D E R%15.11.2019 CM APPL. 49113/2019 (exemption) 1. Exemption allowed, subject to all just exceptions. 2. The application stands disposed of. W.P.(C) 12003/2019 3. The petitioner has preferred the present appeal to assail the order passedby the Principal Commissioner of Income Tax (PCIT) dated 23.10.2019under Section 127 of the Income Tax Act, 1961 (hereinafter referred as‘Act’) whereby, in exercise of the power conferred by the said provision, thePrincipal Commissioner of Income Tax has transferred the cases of thepetitionerfromtheACIT/DCIT,Circle19(1),NewDelhitotheACIT/DCIT, Central Circle-II, Noida.The impugned order reads as follows: “ORDER UNDFR SECTION 127 OF THE I.T. ACT,1961 Consequent to the search & seizure operations u/s 132 of the I.T.Act. 1961 in Keshav Lal Group (Date of Search: 19.04.2017), thePr. Commissioner of Income Tax (Central), Kanpur vide letter F.No.Pr.CIT(C)/KNP/184/KeshavLal/2018-19/131dated20.05.2019hasgivenconcurrenceandrequestedforcentralization of the following case related to Keshav Lal Groupto DCIT/ACIT Central Circle-II, NOIDA for coordinated postsearch investigation & meaningful assessment. Accordingly, in exercise of power conferred by sub-section (2) ofSection 127 of the Income Tax Act, 1961 and under all otherpowers enabling me in this behalf. I, the Pr. Commissioner ofIncome Tax. Delhi-07. New Delhi hereby transfers the followingcase(s), particulars of which are mentioned hereunder inColumns (2) and (3) from the Assessing Officer mentioned inColumn (4) therein, to the of the Assessing Officer mentioned inColumn (5): This order shall come into force with immediate effect. (Mukesh Mittal)Pr. Commissioner of Income Tax,Delhi-7, New Delhi” 4. The above order reflects that search and seizure operation under Section132 of the Income Tax Act (“Act”) was undertaken in respect of the KeshavLal Group on 19.04.2017. In pursuance thereof the PCIT (Central), Kanpurvide letter dated 20.05.2019 gave its concurrence and requested forcentralization of the cases related to the Keshav Lal Group to DCIT-ACIT,Central Circle –II, Noida “for coordinatedpost search investigation &meaningful assessment.” 5. A show cause notice under Section 127 of the Act was issued to thepetitioners on 03.06.2019 which was responded to on 13.06.2019. It appearsfrom the notice dated 03.06.2019 that the PCIT (Delhi) did not disclose as toin respect of which group, search and seizure operation had been undertakenunder Section 132/133A of the Income Tax Act, 1961 and the petitioneraccordingly, disputed and denied involvement with any group searched, andclaimed that no search and seizure had been undertaken in respect of it.Thereupon, another communication dated 16.08.2019 was issued to thepetitioner, forwarding the copy of the letter dated 10.07.2019 - whichcontained the reasons and the basis for the proposed centralization. Thepetitioner was asked to submit its objections, if any. The communicationdated10.07.2019,issuedbytheDCIT(Noida)tothePrincipalCommissioner of Income Tax, Delhi stated that search was conducted onthe Keshav Lal Group on 19.04.2017. During the search, statements of SmtIndu Shrivastava were recorded under Section 132 (4) of the Income Tax.She claimed that she had received income from the petitioner on account ofdesigning of jewellery. As per statement of Mrs. Indu Shrivastava and herdaughter Ms. Shruti Shrivastava, they did not have any qualification or experience in the matter of designing jewellery. It appeared that from theincome received from the petitioner, they had acquired properties. It alsoappeared that the money received from the petitioner could be an attempt tochannelize the unaccounted money in the guise of the income from M/sOTM Jewellery Pvt. Ltd. for jewellery designing. The communication alsonotes that Indu Shrivastava and Shruti Shrivastava admitted to notmaintaining any books of account or bill book. The old gold was also shownto have been sold to the petitioner-M/s OTM Jewellery Pvt. Ltd by themembers of the said Keshav Lal Group. 6. In the aforesaid context, the centralisation of investigation and assessmentwas proposed so that wholesome view could be taken of not only theactivities and operations of the searched group, but also of the petitionerwhich had substantial transactions with the members of the searched group.Petitioner submitted its objections, which have been perused by us. Aperusal thereof shows that they primarily relate to the contention that thetransactions undertaken with the members of the Keshav Lal Group aregenuine and bona fide. 7. The submission of the learned counsel for the petitioner is that merelybecause the Keshav Lal Group has been searched and assessmentproceedings are underway in respect of the members of the said group, is noreason to centralize and transfer the assessments in respect of the petitionerwith the assessment of the Keshav Lal Group.Learned counsel for thepetitioner submits that the impugned order itself is devoid any of suchreasons. 8. Mr. Raghvendra Kumar Singh, who appears on advance notice, submitsthat in consequence of the search undertaken under Section 132 (2) inrespect of the Keshav Lal Group, notices have already been issued to thepetitionerunderSection153Candthusassessment/re-assessmentproceedings stand undertaken in respect of the petitioner as well, apart fromthe Keshav Lal Group, as a consequence of the search operation. 9. Having heard the learned counsel for the petitioner, we do not find anymerit in the petitioner’s submissions. The reasons for the proposed transferunder Section 127 are clearly set out in the inter department communicationdated 10.07.2019, issued by the office of the DCIT Central Circle –II, Noidato the PCIT (Delhi). The PCIT (Delhi) has consented to the said transfer.There is no denying the fact that transactions were undertaken between themembers of the Keshav Lal Group and the petitioner. Since the petitioner isin the other end of the said transaction undertaken by members of theKeshav Lal Group, which are under investigation, and the petitioner too hasbeen issued notice under Section 153C, it is only reasonable and proper thatthe proceedings are centralized so that a wholesome view could be taken bythe same officer who is undertaking the assessment. In fact, thecentralization, in our view, would be to the advantage to the petitioner aswell, since the petitioner would not have to deal with two sets of officers atDelhi and Noida. The submission that no reasons are to be found in theimpugned order is not correct inasmuch, as, the reasons are contained in theproposal for centralization dated 10.07.2019 which was communicated tothe petitioner and the petitioner’s objections were also called for. Thepetitioner has been granted sufficient opportunity for hearing and has also been apprised of the reasons for the said transfer. 10. In view of the above, we therefore, do not find any merit in this petitionand accordingly, dismiss the same. However, we make it clear that we havenot examined the merit of the petitioner’s defence that the petitioner may setup during the course of assessment in undertaking under Section 153C. VIPIN SANGHI, J NOVEMBER 15, 2019Pallavi SANJEEV NARULA, J