Ambika Solvex And Ten Others v. The Commissioner Of Income Tax-I, Ujjainand Five Others

HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE D.B.: HON'BLE MR. SHANTANU KEMKAR AND HON'BLE MR. S. C. SHARMA, JJ WRIT PETITION No. 9244 / 2013 AMBIKA SOLVEX AND TEN OTHERS Vs. THE COMMISSIONER OF INCOME TAX-I, UJJAINAND FIVE OTHERS * * * * * O R D E R( 27/11/2013) PER : S. C. SHARMA, J:- The present Writ Petition has been filed challenging the legality and validity of the order dated 31/5/2013, passed by the Commissioner of Income Tax, Ujjain, under Section 127 of the Income Tax Act, 1961 by which the Commissioner of Income Tax has directed transfer of the assessment cases of the petitioners pending before respondent No.4 at Ratlam to respondent No.3 Dy. Commissioner of Income Tax, Central Circle, Indore. The contention of the petitioners is that on 30/4/2013 and 6/5/2013, the Commissioner of Income Tax – I, Ujjain issued notices to the petitioners for centralisation of their cases from --- 2 --- Ratlam to Indore. The petitioner No.1 filed a reply to the Show Cause Notice on 6/5/13 and stated that no reason has been assigned in the Show Cause Notice and the returns have been filed at Ratlam and, therefore, the cases should not be transferred and consolidated. A similar reply was filed by the other petitioners to the notices. Thereafter another notice was issued on 20/5/2013 u/S. 127 of the Income Tax Act for transferring the assessment cases of the petitioners from Ratlam to Indore and the reason mentioned in the notices was that for administrative convenience and for facilitating coordinated investigation in the group cases with reference to interlinked documents / transactions, the cases are required to be consolidated and transferred from Ratlam to Indore. Petitioner No.1 again filed his objection on 27/5/13 and stated that his earlier reply filed on 6/5/13 should be treated as reply to the new Show Cause Notice. The petitioner also informed that the group cases were already centralised at Ratlam vide order dated 16/5/12 and notices have been issued u/S. 153-A by the Dy. Commissioner of Income Tax, Ratlam. Other petitioners have also submitted their objections and they have adopted the reply filed by the petitioner No.1. The petitioners further stated that --- 3 --- finally an order was passed on 31/5/13 transferring the cases of the petitioners from Ratlam to Indore. The petitioners have raised various grounds while challenging the validity and legality of the order dated 31/5/13. The contention of the petitioners is that proper reasons have not been recorded for such a transfer and cryptic reasons have been assigned in the Show Cause Notice dated 30/4/13 and 20/5/13 and, therefore, the order passed by the respondents dt. 30/5/13 deserves to be set aside. It has also been stated that earlier by the order of the Chief Commissioner dt. 16/4/12, the cases were centralised under respondent No.4 – The Dy. Commissioner of Income Tax, Ratlam and, therefore, the impugned order which has been passed in supersession of the earlier order deserves to be set aside. Petitioners have also raised a ground before this Court stating that they have not earlier objected to the transfer of their cases to Ratlam and they were cooperating with the assessment proceedings and as their Offices and residence were falling within the territorial jurisdiction of Ratlam and as the entire record and the documents were at Ratlam, the order of transferring the cases from Ujjain to Indore is bad in law. A ground has also been raised stating therein that the order passed by the Commissioner of Income Tax, Ujjain is in complete violation of the judicial precedence established by Hon'ble the Supreme Court of India and followed by the M.P. High Court and relied upon by the Andhra Pradesh High Court as well as Delhi High Court and Madras High Court. It has also been argued that while transferring the cases, proper opportunity of hearing and proper reasons should have been assigned by the transferring authority. Learned counsel has also argued before this Court that reasons for transfer of a case should be properly communicated to the assessee and in the present case, frivolous reasons have been assigned by the respondents and, therefore, the impugned order is bad in law in the light of the judgment delivered by the apex Court in the case of Ajanta Industries andothers Vs. Central Board of Direct Taxes and others reported in (1976) 102 ITR 281 (SC). The petitioners have placed reliance upon a judgment delivered in the case of Dr. Ashok Sharma andanother Vs. Commissioner of Income Tax and another reported in (2010) 190 Taxman 19 (MP) and the contention of the petitioners is that the order passed by the respondents is invalid as it is a cryptic and non speaking order. Learned counsel for the petitioners has also placed reliance upon a judgment delivered --- 5 --- by the Calcutta High Court in the case of Naresh KumarAgrawal Vs. Union of India and others reported in (2010) 320 ITR 361 and his contention is that merely stating that transfer is for coordinated investigation and assessment, is not at all sufficient as the assessee should have been intimated about the reasons in a comprehensive manner in order to enable him to make an effective representation. Learned counsel for the petitioners has further relied upon a judgment delivered by the Delhi High Court in the case of Power Controls and others Vs.Commissioner of Income Tax and othersreported in (2000) 241 ITR 807 (Del.) and again his contention is that non disclosure of specific reasons for transfer will vitiate the order of transfer passed by the Competent Authority. Learned counsel for the petitioners has also placed reliance upon a judgment delivered in the case of General Exporters Vs. Commissioner of Income Taxand anotherreported in (1998) 234 ITR 860 (Mad) and his contention is that in the aforesaid case as the Show Cause Notice was silent and no reasons were disclosed, no opportunity of hearing was afforded to the assessee who had filed objections, the order passed u/S. 127 was quashed and, therefore, in the present case also the order passed in similar circumstances --- 6 --- deserves to be quashed. Learned counsel for the petitioners has also placed reliance upon a judgment delivered by the Calcutta High Court in the case of Lords Distillery Ltd., and another Vs.Commissioner of Income Tax and othersreported in (2007) 294 ITR 147 (Cal.) and his contention is that in the light of the aforesaid judgment, as the requirement of Sec. 127 has not been fulfilled, the impugned notice and the impugned order of transfer deserves to be set aside. A ground has also been raised stating therein that the transferring authority has not applied its mind independently and in fact, the transferring authority has acted pursuant to the instructions received from the higher authority (Commissioner of Income Tax, (Central), Bhopal) and, therefore, as the transferring authority while discharging the judicial or quasi judicial functions has acted at the behest of the higher authority, the impugned order deserves to be set aside. It has also been argued that the impugned order is violative of the principles of natural justice and fair play as the principles of natural justice requires impartial and fair hearing and the respondents have denied the impartial and fair hearing to the petitioners. Lastly, the reliance has been placed upon a judgment delivered in the case of Commissioner of Income Tax Vs. Greenworld Corporationreported in (2009) 23 DTR (S.C.) 185 and the contention of the learned counsel is that a higher authority cannot interfere with the independence of a lower authority and in the present case the transfer has been done at the behest of Commissioner of Income Tax, Bhopal and, therefore, the same deserves to be set aside. The petitioner has prayed for quashment of the order dated 31/5/13 passed by the Commissioner of Income Tax, Ujjain. A reply has been filed and the contention of the respondents is that a proper Show Cause Notice was issued u/S.127 of the Income Tax Act and even if Section 127 was not mentioned in the Show Cause Notice, the order passed u/S.127 cannot be said to be an illegal order and without jurisdiction. It has been stated that the petitioners in response to the Show Cause Notice dt. 30/4/13, 6/5/13 and 20/5/13 submitted detailed and exhaustive reply and the order was passed after granting an opportunity of hearing to the petitioners and, therefore, by no stretch of imagination, it can be said that the order has been passed in violation of principles of natural justice or in violation of the statutory provisions as contained u/S. 127 of the Income Tax Act. The respondents have further stated that the order --- 8 --- passed by them, which is under challenge, has been passed with due concurrence of the Chief Commissioner of Income Tax, Indore and by the impugned order 12 cases have been consolidated. It has been stated that Ambika Solves Ltd., Indore, Narayan Niryat India Pvt. Ltd., Indore, Avalanche Realty Pvt. Ltd., Indore and Narayan Ambika Infrastructure Pvt. Ltd., Indore are having their registered Office at Satyageeta Apartment, 90/47, Sneh Nagar, Main Road, Indore and except for Ambika Solvex Ltd., all other cases were assessed at Indore. Respondents have further stated that the case of Suresh Chandra Garg had the address of Akola but was being assessed at Ratlam; cases of Ms. Rashmi Garg, Shri Kailash Chandra Garg and Shri Pawan Garg had the same address at Indore and the case of Ms. Rashmi Garg was assessed at Indore. The residence of Shri Kailash Chandra Garg, Shri Pawan Kumar Garg and Ms. Rashmi Garg is at 87, Samrat Ashok Nagar, Behind Sapna Sangeeta, Indore and, therefore, contention of the petitioners that their Offices and residences were located within the territorial jurisdiction of Ratlam, is false. The respondents have further stated that the order has been passed by the Competent Authority ie., the Commissioner of Income Tax, Ujjain and the --- 9 --- Commissioner of Income Tax, Ujjain has acted well within his jurisdiction and passed an order for centralisation dated 31/5/2013 as per the provisions of the Income Tax Act, 1961. It has also been stated in the return that notices were issued on 30/4/13 and 6/5/13 and even though Sec. 127 was not expressly mentioned in the said notices, however, the intent and purpose of the notices was evident from the content of the said notices which the petitioners also understood as they have filed their detailed objection to the proposed centralisation ie., transfer of cases to one Assessing Officer ie., the Dy. Commissioner of Income Tax, (Central), Indore. It was also mentioned in the notice that the centralisation was necessitated due to the newly set up wing called Central Charge, which as per the administrative guidelines is meant for dealing with specifically the search and seizure cases and accordingly these cases were to be assigned to the Central Charge u/S. 127. This fact was also communicated to the petitioners in the notices. In reply to the petitioners' apprehension that independent appreciation of the seized documents would not be possible, the respondents have stated that the administrative set up of Commissioner of Income Tax, (Central), Bhopal functions in the same manner as that of --- 10 --- --- 10 --- any other administrative Commissioner of Income Tax. The cases are to be dealt with by the Dy. Commissioner of Income Tax, (Central) who is under the supervisory control of the Addl. Commissioner of Income Tax, (Central), Bhopal who functions below the Commissioner of Income Tax, (Central), Bhopal. It has also been stated that the seized documents are to be examined by the Dy. Commissioner of Income Tax (Central) and not by the Commissioner of Income Tax (Central). The Commissioner of Income Tax (Central) has no powers to issue any directions to the Assessing Officer, to do an Assessment in a particular manner. It has been stated that the Income Tax Act provides adequate administrative controls to prevent individual biases influencing assessment proceedings. Respondents have also denied that they have passed a cryptic order. It has been stated that they have assigned reasons in the Show Cause Notice as well as in the final order for transferring the cases and the centralisation is for the purpose of coordinated investigation in the light of several interlinked incriminating documents seized from different premises during the course of search and seizure. Respondents have also stated that the judgments relied upon by the learned counsel for the petitioners are distinguishable on facts. Respondents have further stated that the Commissioner of Income Tax (Central), Indore has no statutory role in the framing of assessment and reasons have been communicated vide order dated 31/5/13 while ordering transfer of cases. Respondents have also stated that the order passed by them is in consonance with the statutory provisions and they have placed heavy reliance upon a judgment delivered by the High Court of Chattisgarh in the case of The Commissioner of Income Tax,Raipur Vs. Union of India and others (W.A.No. 27 / 2013, decided on 14/3/2013). The respondents have prayed for dismissal of the Writ Petition. Heard learned counsel for the parties at length and perused the record. The petitioners before this Court are aggrieved by an order passed u/S. 127(2) of the Income Tax Act, 1961 transferring cases of the petitioners from Ratlam to Indore. A Show Cause Notice was issued on 30/4/2013 for centralisation of the cases with Dy. Commissioner of Income Tax (Central) Indore Region, which reads as under : GOVERNMENT OF INDIAMINISTRY OF FINANCE (DEPARTMENT OF INCOME TAX)OFFICE OF THE COMISSIONER OF INCOME TAXAAYAKAR BHAWAN,BHARATPURI,UJJAIN TELEPHONE(0734)2527843,FAX-2515611 --- 12 --- F.No. CIT/UJN/CS./13-14/431 Dated:30.04.2013 TO, Ambika Solves Ltd.,Satyageeta Apartment,90/47, Sneh Nagar,Main Road, Indore. Sir, Sub:-Centralization of your case with DCIT ( Central), Indore-Reg. Pursuant to action under section 132 of the Act, your case was centralized with DCIT-1(1), Ujjain. However, with the creation of the charge of CIT ( Central),Bhopal your case is proposed to centralize with DCIT (m Central), Indore. In case you wish to make statement on the issue, you are directed to do so by attending he office of the undersigned in person or through your authorized representation on or before 06.05.2013, failing which it will be presumed that you have no objection to the proposed action and the matter will be accordingly decided. (Vijyendra Kumar) Dy. Commissioner of Income-Tax(HQrs.) For Commissioner of Income-Tax,Ujjain. Sir, Sub:-Centralization of your case with DCIT ( Central), Indore-Reg. Pursuant to action under section 132 of the Act, your case was centralized with DCIT-1(1), Ujjain. However, with the creation of the charge of CIT ( Central),Bhopal your case is proposed to centralize with DCIT (m Central), Indore. In case you wish to make statement on the issue, you are directed to do so by attending he office of the undersigned in person or through your authorized representation on or before 06.05.2013, failing which it will be presumed that you have no objection to the proposed action and the matter will be accordingly decided. (Vijyendra Kumar) Dy. Commissioner of Income-Tax(HQrs.) For Commissioner of Income-Tax,Ujjain. In case of petitioner No.1, the address reflected in the Show Cause Notice is of Indore itself. In case of petitioner No.2, the address reflected in the Show Cause Notice is of Mandsaur. In case of petitioner No.3, the address reflected in the Show Cause Notice is again of Indore. In case of petitioner No.5, the address reflected is again Sneh Nagar, Indore. In case of Ms. Rama Devi Garg, the address is of Mandsaur and in case of Mr. Shreyansh Garg, the address is of Mandsaur. In the notice dated 30/4/2013 there was a typographical error and the case was proposed to be centralised with Dy. Commissioner of Income Tax (Central), Indore and, therefore, again a Show Cause Notice was issued on 6/5/2013, the same reads as under : --- 13 --- GOVERNMENT OF INDIAMINISTRY OF FINANCE (DEPARTMENT OF INCOME TAX)OFFICE OF THE COMISSIONER OF INCOME TAXAAYAKAR BHAWAN,BHARATPURI,UJJAIN TELEPHONE(0734)2527843,FAX-2515611 F.No. CIT/UJN/CS./13-14 Dated:06.05.2013 TO, Ambika Solvex Ltd.,Satyageeta Apartment,90/47, Sneh Nagar,Main Road,Indore. Sir, Sub:-Centralization of your case with DCIT ( Central), Indore-Reg. Please refer this office letter dated 30.04.2013. In this said letter due to typing error it was mentioned that your case is presently centralized to DCIT-1(1), Ujjain, instead of ACIT/DCIT-1(1),Ratlam. The error is regrettable. Therefore, in continuation with the same letter you are again being informed that the charge of CIT(Central),Bhopal has been created and your case was proposed to be centralized with DCIT (Central),Indore. Vide this office letter dated 30.04.2013, you were asked to give your comments/ reply on this issue by 06.05.2013. On 06.05.2013 you made the submission wherein you expressed your objection on the proposed centralization. In the light of typing error as mentioned above,you are once again given another opportunity to place your further comments, if any, on the subject matter. You are requested to furnish your reply or appear personally / through Authorized Representatives by 10.05.2013. (Vijyendra Kumar) Dy. Commissioner of Income-Tax(HQrs.) For Commissioner of Income-Tax,Ujjain The petitioners did submit a reply to the Show Cause Notice and raised various grounds and the Competent Authority after considering the reply filed by the petitioners, the Commissioner of Income Tax, Ujjain again issued a letter on 20/5/2013 granting one more opportunity to the petitioners either by appearing in person or through authorised representative or through written statement on 28/5/2013 and the same reads as under : GOVERNMENT OF INDIA --- 14 --- MINISTRY OF FINANCE (DEPARTMENT OF REVENUE)OFFICE OF THE COMISSIONER OF INCOME- TAXAAYAKAR BHAWAN,BHARATPURI,UJJAIN TELEPHONE(0734)2527843,FAX-2515611 F.No. CIT/UJN/CS./13-14 /868 Dated:20.05.2013 TO, Ambika Solvex Ltd.,Satyageeta Apartment,90/47, Sneh Nagar,Main Road,Indore. Sir, Sub:-Centralization of your case with DCIT ( Central), Indore Under section 127-of the Income Tax Act,1961Reg. either by appearing in person or through authorised representative or through written statement on 28/5/2013 and the same reads as under : GOVERNMENT OF INDIA --- 14 --- MINISTRY OF FINANCE (DEPARTMENT OF REVENUE)OFFICE OF THE COMISSIONER OF INCOME- TAXAAYAKAR BHAWAN,BHARATPURI,UJJAIN TELEPHONE(0734)2527843,FAX-2515611 F.No. CIT/UJN/CS./13-14 /868 Dated:20.05.2013 TO, Ambika Solvex Ltd.,Satyageeta Apartment,90/47, Sneh Nagar,Main Road,Indore. Sir, Sub:-Centralization of your case with DCIT ( Central), Indore Under section 127-of the Income Tax Act,1961Reg. Please refer to this office letter dated 30.04.2013 and 06.05.2013 issued to you on this subject matter. Vide this letter you are being provided the broad reason for proposing your case for centralization with DCIT (Central), Indore and also being given one more and final opportunity to make your representation on the subject matter by appearing before this office in person or through your authorized representatives or through written statement by 28.05.2013. The search operation in the Ambika Solvex Group of cases, Indore, was conducted on 19.01.2012 wherein,you were also covered under section 132. This search operation was conducted on different premises of different assessees of this group located at different places such as Indore. Mandsaur, Ratlam, Akola, Mahidpur, etc. These different assessees were being assessed at different places such as Income Tax Office,Indore Income Tax Office, Mandsaur,Income Tax Office, Ratlam, etc, and were being different Assessing Officers. During the search operation as well as on account of post search enquiries several incriminating documents related to different assessees were found and seized from different places. Therefore, with view to carry out coordinated investigation in your case along with all other group cases of Ambika Solvex Group, the cases were centralized to a single officer, i.e. ACIT, Ratlam vide order under Section 127 dated 16.04.2012. However, with the creation of the charge of CIT(Central) , Bhopal,your case along with other group cases is proposed to be centralized with DCIT (Central) Indore. The reason for the same being administrative 'convenience and facilitating coordinated investigation' in the group cases with reference to inter-linked documents / transactions. As already mentioned above, various incriminating documents were seized from different premises at different places. The documents are inter- connected and thus, for proper analysis and --- 15 --- investigation into all the documents found,all of these case are centralized to a single officer. Further, on account of change in the administrative set-up for dealing with search & seizure cases,your case is proposed to be centralized with the newly created Central Circle, Indore(i.e. DCIT (Central) Indore) which has been created for dealing with search& seizure cases involving number of inter- linked group cases. Thus, your case is proposed to be centralized with DCIT (Central), Indore. (Vijyendra Kumar) Dy. Commissioner of Income-Tax(HQrs.) For Commissioner of Income-Tax,Ujjain The petitioners did submit their reply to the aforesaid notices which was an exhaustive notice and finally an order has been passed on 31/5/2013. The order passed by the Commissioner of Income Tax is in fact, a very exhaustive order and it contains all minute details of the proceedings which have taken place and also the Commissioner has dealt with all the objections raised by the petitioners. The order passed u/S. 127 of the Income Tax Act, 1961 reads as under : OFFICE OF THE COMISSIONER OF INCOME TAX,AAYAKAR BHAWAN,BHARATPURI,UJJAIN Office (0734) 2527204 / FAX: (251561 Order u/s 127 I.T. Act,1961 Dated 31.05.2013 (Vijyendra Kumar) Dy. Commissioner of Income-Tax(HQrs.) For Commissioner of Income-Tax,Ujjain The petitioners did submit their reply to the aforesaid notices which was an exhaustive notice and finally an order has been passed on 31/5/2013. The order passed by the Commissioner of Income Tax is in fact, a very exhaustive order and it contains all minute details of the proceedings which have taken place and also the Commissioner has dealt with all the objections raised by the petitioners. The order passed u/S. 127 of the Income Tax Act, 1961 reads as under : OFFICE OF THE COMISSIONER OF INCOME TAX,AAYAKAR BHAWAN,BHARATPURI,UJJAIN Office (0734) 2527204 / FAX: (251561 Order u/s 127 I.T. Act,1961 Dated 31.05.2013 Search &Seizure operating was carried out on 19.01.2012 in the Ambika Solvex Group of Mandsaur & Indore. The 28 cases of the group were centralized with the DCIT, Ratlam, vide order u/s 127 dated 10/16.04.2012. Thereafter notice dated 30.04.2013, 06.05.2013 & 20.05.2013 were issued in all the 28 cases proposing to centralize these cases with the newly created O/o DCIT (Central),Indore under the newly created set- up of CIT (Central), Bhopal. The notices were duly served. In response to the said notices in the following cases the assessee requested for further time to file its reply in response to first notice dated 30.04.2013. Accordingly further time was given but no reply was file din response to the same. --- 16 --- 01.Narayan Trading Co. 02.Shri Yojesh Hotwani. 03.Shri Shiv Kumar Hotwani. 04.Ninnku Exports Pvt. Ltd. 05.Shri Arjun Das Hotwani. 06.Shri Bhagwan Das Hotwani. 07.Shri Rupchand Hotwani. 08.Shri Laxmandas Hotwani. 09.Shri Jethanand Hotwani. 10.Ambika Dehydrates. In view of the fact that in spite of sufficient opportunities to response has been received from the above assessees, it is deemed that they no objection to the proposed centralization. Accordingly these cases are directed to be centralized with the DCIT ( Central),Indore. In the following cases the assessee submitted that they have no objection to the proposed centralization. Accordingly these cases are directed to be centralized with the DCIT ( Central), Indore. 1.Keshav Industries Pvt. Ltd. 2.Ambika Refinery. 3.Shri Vinod Kumar Garg 4.Shri Arun Garg 5.Shri Ajay Kumar Garg In the following cases the assessee have raised objection to the proposed centralization. 01.Ambika Solvex, Ratlam. 02.Suresh Chandra Garg,Ratlam (PAN ) 03.Suresh Chandra Garg,Ratlam( PAN ) 04.Narayan Niryat India Pvt. Ltd. Indore. 05.Avalanche Realty Pvt. Ltd. Indore. 06.Narayan Ambika Infrastructure Pvt. Ltd. Indore. 07.Ramkrishna Solvex Pvt. Ltd. Indore. 08.Ms. Rashmi Garg, Indore. 09. Kailash Chandra Garg, Mandsaur. 10. Pawan Kumar Garg, Mandsaur. 11. Ramadevi Garg,Mandsaur. 12.Shreyansh Garg, Mandsaur. In all the above cases common submissions have been made and the gist of the said contentions is that no incriminating documents have found & seized according to them and that there was no stipulation in the notification notifying the jurisdiction of CIT ( Central),Bhopal that search & seizure cases are to be assessed by Central Circle . It was also contended that the accounts of the group as well as accountants/Tax consultant are situated at Jaora, Mandsaur & Neemuch and due to company not doing well most employees from Indore are relieved and so there is lack of sufficient staff at Indore while staff of Jaora & Mandsaur would conveniently manage affairs at Ratlam so centralization at Indore will cause grave hardship. Out of the 12 cases , the cases at Sl. No. 1,4,5,6 had the same address at Indore and out of them only one case was previously assessed at Ratlam that of Ambika Solvex. The case at Sl. No.2 had address of Akola but was being assessed at Ratlam. Cases at Sl. No. 8, 9 & 10 have the same address at Indore Out of the 12 cases , the cases at Sl. No. 1,4,5,6 had the same address at Indore and out of them only one case was previously assessed at Ratlam that of Ambika Solvex. The case at Sl. No.2 had address of Akola but was being assessed at Ratlam. Cases at Sl. No. 8, 9 & 10 have the same address at Indore but out of them only 1 case was at Indore and 2 were Mandsaur. This shows that assessee has adequate set- up at Indore including the residence at 87, Samrat Ashok Nagar at which Shri kailash Garg. Shri Pawan Garg & Smt.Rashmi Garg are based and only Smt. Rashmi Garg was filing return at Indore. The other two were filing at Mandsaur. The fact of closing of Indore office had not been communicated to the department earlier. The distance between Indore & Ratlam is not so as to cause any hardship and other concerns of the group who are based at Mandsaur which is further then Ratlam, from Indore have expressed no such hardship in the matter. It is further to be noted that in the region there was no separate set- up for dealing with search & seizure case which by their very nature required in depth study of seized material hence such cases were centralized with other Aos of the charge. With the setting up of the CIT (Central), Bhopal this lacuna has been taken care of. In order to facilitate in depth analysis and appreciation of the seized documents co-ordinated investigation of interlinked group cases, the cases are proposed for centralization with DCIT ( Central) from DCIT,Ratlam. This is also with a view to equitable distribution of workload as apart from the search cases the DCIT Ratlam, has other cases to deal with resulting into better administration and administrative convenience. The assessee has also made reference to the judicial pronouncements in the case of Power Controls & ORS Vs. CIT (241 ITR 807), Delhi, V.K. Steel Industries ( P) Ltd. Vs. ACIT [(187 ITR 403 (AP)] & Ajantha Industries & ORS Vs. CBDT [102 ITR 281 (SC)]. In this context, reference is necessary to the decision of the High Court of Chhattisgarh in the case Mahamaya Group of Companies wherein the Court has held as under. 1.Section 127 (2) of the Act provides that transfer can be done only if opportunity is afforded to an assessee and after recording reasons. But merely for this reason it cannot be said to be quasi- judicial in nature. 2.The transfer order does not deciding the right of the parties in the assessment. 3.The ultimate order deciding the right is the order of the assessment which decides the basis and the tax to be paid. This order is a judicial order. The transfer order is merely for administrative reason and it cannot be said that nature of power is judicial. 4.It was not disputed that the search took place in the premises of Mahamaya group of companies , as well as residential and official premises of its direction and its employees, at different places, where incriminating documents were seized. 5.The documents were inter- connected and affected the assessment of the parties. It was necessary to see their overall effect on the assessments. It could only be done after analyzing and investigation into all the documents found at different places and not separately, for which a co-ordinated investigation was necessary. Thus, the words 'coordinated investigation' were not vague. 6. The notice had indicated the reason for transfer as ' centralization' for 'coordinated' investigation'. It was for this reason that order for transfer were made. There was no denial of reasonable opportunity to the assessee. Another objection which the assessee has raised is that the charge of CIT ( Central), Bhopal is presently with an officer who was actively involved in planning & execution of search operation hence if cases are centralized justice may be denied. Such an argument cannot be a ground at this stage as the post of CIT( Central) is merely being held as an Addl. Charge only. Further the cases involved in planning & execution of the search. --- 18 --- 6. The notice had indicated the reason for transfer as ' centralization' for 'coordinated' investigation'. It was for this reason that order for transfer were made. There was no denial of reasonable opportunity to the assessee. Another objection which the assessee has raised is that the charge of CIT ( Central), Bhopal is presently with an officer who was actively involved in planning & execution of search operation hence if cases are centralized justice may be denied. Such an argument cannot be a ground at this stage as the post of CIT( Central) is merely being held as an Addl. Charge only. Further the cases involved in planning & execution of the search. --- 18 --- In view of the above after duly considering the objections the above cases are directed to be centralized with the DCIT (Central), Indore for co- ordinated investigation and better administrative control of the work. The list of cases centralized hereby is as per enclosed annexures force w.e.f. 03.06.2013. (M.S. Pawar) Commissioner of Income Tax,Ujjain copy to: 1.The Chief Commissioner of Income -Tax, Indore2.The Director on Income-Tax ( Inv.),Bhopal2.The Director on Income-Tax ( Inv.),Bhopal 3.The Commissioner of Income Tax( Central),Bhopal 4.The Commissioner of Income-Tax-I&II,Indore 5.The Addl. Director of Income-Tax ( Inv.) ,Indore 6.The Addl. Commissioner of Income -Tax Range-1/2,Ujjain 7.The joint Commissioner of Income-Tax,Ratlam Range,Ratlam 8. The Dy. Commissioner of income-Tax-1(1)/2(1),Ujajin 9.The Dy. Commissioner of Income-Tax,Ratlam 10.The concerned assesse (Vijyendra Kumar) Dy. Commissioner of Income-Tax(Hqrs.) For – Commissioner of Income-Tax, Ujjain The order passed by the Commissioner of Income Tax makes it very clear that large number of assessees are either resident of Indore or they are having their offices at Indore and in order to facilitate coordinated investigation and in order to ensure better administrative control of the work, the impugned order has been passed. As many as 28 cases have been consolidated by the impugned order by the Commissioner of Income Tax, Ujjain. Sec. 127 of the Income Tax Act, 1961 reads as under : 127. Power to transfer cases (1) The Director General or Chief Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in thematter, wherever it is possible to do so, --- 19 --- and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner, — (a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub- (b) where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub- section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation.—In section 120 and this section, the word “case”, in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. Keeping in view the aforesaid statutory provisions, in the present case, it can never be said that the principles of natural justice have been violated by the respondents. Exhaustive Show Cause Notices were issued to the petitioners and they have filed reply to the Show Cause Notices. It has been argued that the reason “for effective and co-ordinate investigation” cannot be said to be sufficient ground for transfer. Learned counsel for the petitioner has placed heavy reliance upon a judgment delivered in the case of AjantaIndustries and others Vs. Central Board of Direct Taxes andothersreported in (1976) 102 ITR 281 (SC) and his contention is that violation of principles of natural justice and fair play makes an order of transfer to be an invalid order. This Court has carefully gone through the aforesaid case and in the aforesaid case, reasons were not recorded in the order passed u/S. 127 of the Income Tax Act, 1961 and reasons were recorded by the Central Board prior to the passing of the impugned order therein in the file. The apex Court in those circumstances has held that the requirement of recording reasons u/S. 127 (1) is a mandatory direction under the law and non communication thereof is not saved by showing that the reasons existed in the file although not communicated to the assessee. In the present case, the reasons have been recorded and they have been communicated to the assessee that too after granting an opportunity of personal hearing to the assessees and, therefore, the judgment relied upon by the learned counsel for the petitioners is distinguishable on facts. Learned counsel for the petitioners has also placed reliance upon another judgment delivered by this Court in the case of Dr. Ashok Sharma and another Vs. Commissioner ofIncome Tax and anotherreported in (2010) 190 Taxman 19 (MP). This Court has again gone through the aforesaid judgment and it was a case where a total cryptic and non speaking order was passed and the reasons were also not recorded and in those circumstances the order passed u/S. 127(1) was set aside with a liberty to the CIT to pass a fresh order u/S. 127(1) whereas, in the present case, opportunity of hearing has been granted to the assessee. Again reasons have been assigned in the order passed u/S. 127 of the Income Tax Act and, therefore, again the judgment relied upon by the learned counsel for the petitioners is of no help. Learned counsel for the petitioners has further relied upon a judgment delivered by the Calcutta High Court in the case of Naresh Kumar Agrawal Vs. Union of India and others reported in (2010) 320 ITR 361. In the aforesaid case, the Calcutta High Court was again dealing with the transfer of cases u/S./ 127 of the Income Tax Act. The reason assigned in the proposed transfer was “coordinated investigation and assessment”. In the aforesaid case the written objections filed by the petitioner therein were not at all dealt with by the Competent Authority and, therefore, in those circumstances the order passed u/S. 127 of the Income Tax Act was set aside, whereas, in the present case, though the reason assigned is certainly “coordinated investigation and assessment”, the objection of the assessees have been dealt with by the Competent Authority and, therefore, taking into account the judgment delivered by the High Court of Gujarat in the case of Shree Ram Vessel Scrap (P) Ltd., Vs.Commissioner of Income Tax reported in (2013) 215 Taxman 203 (Gujarat) as opportunity of hearing has also been granted to the petitioners, their objections have been considered, the judgment relied upon by the learned counsel for the petitioners is again of no help. Learned counsel for the petitioners has also placed reliance in the case of Power Controls and others Vs.Commissioner of Income Tax and othersreported in (2000) 241 ITR 807 (Del.) and his contention is that merely by mentioning that the cases are to be transferred for coordinated investigation, does not mean that proper reasons has been assigned by the --- 24 --- Competent Authority. His contention is in the aforesaid case the impugned order passed u/S. 127 was set aside. This Court has again gone through the aforesaid judgment and in the aforesaid case out of four petitioners only in one case it was mentioned that the proposed transfer is for coordinated investigation. In the present case, specific and cogent reasons have been assigned to all the assessees and it is not a case where disclosure has not been done on the part of the Competent Authority transferring the case. Not only this, the Show Cause Notice read with the reply makes it very clear that the petitioners were aware of the reasons for the proposed transfer and they have filed detailed and exhaustive reply to the Show Cause Notice and thereafter with due application of mind a reasoned order has been passed transferring the cases to Ujjain and, therefore, the judgment relied upon is again of no help to the petitioners. Learned counsel for the petitioners has placed reliance upon a judgment delivered by the Madras High Court in the case of General Exporters Vs. Commissioner of Income Tax andanotherreported in (1998) 234 ITR 860 (Mad.). In the aforesaid case it has been held that a Show Cause Notice containing the reasons for the proposed transfer should be given to the assessee and after affording an opportunity of hearing, a speaking order should be passed. In the present case, a Show Cause Notice for proposed transfer containing the reasons was served to the assessees / petitioners and after considering their objections a speaking order has been passed and, therefore, the judgment relied upon is again of no help to the petitioners. Learned counsel for the petitioners has placed reliance upon a judgment delivered by the Madras High Court in the case of General Exporters Vs. Commissioner of Income Tax andanotherreported in (1998) 234 ITR 860 (Mad.). In the aforesaid case it has been held that a Show Cause Notice containing the reasons for the proposed transfer should be given to the assessee and after affording an opportunity of hearing, a speaking order should be passed. In the present case, a Show Cause Notice for proposed transfer containing the reasons was served to the assessees / petitioners and after considering their objections a speaking order has been passed and, therefore, the judgment relied upon is again of no help to the petitioners. Learned counsel for the petitioners has also placed reliance upon a judgment delivered by the Chattisgarh High Court in the case of Ram Gopal Agrawal Vs. Union of India andAnotherreported in (2013) 21 ITJ 675 (CG) and his contention is that in case the reasons have not been communicated to the assessee, the order passed u/S. 127 is bad in law. This Court has carefully gone through the aforesaid judgment and in the aforesaid case the reason assigned in the Show Cause Notice was coordinated investigation and it was stated by the respondents that there are other reasons also recorded in the file but they were not communicated to the assessee, whereas, in the present case, it is not a case where there were other reasons recorded in the file and not communicated to the assessee. The reasons necessary for transfer were communicated to the assessees to which the assessees have filed detailed and --- 26 --- exhaustive reply and while passing an order u/S. 127 the reply filed by the assessees have been considered by the Competent Authority and, therefore, again the judgment relied upon by the learned counsel for the petitioners is of no help to the petitioners. The respondent – Income Tax Department, on the other hand, has placed reliance upon a judgment delivered by the Gauhati High Court in the case of Continental Milkose (India)Ltd., Vs. Commissioner of Income Tax and others reported in (2013) 351 ITR 292 (Gauhati). It was a case of assessment pursuant to search and seizure operation and the case of the petitioner therein was transferred from Dibrugarh to New Delhi for effective coordinated investigation and administrative convenience. The Division Bench of the Gauhati High Court has held the reason to be a valid reason while upholding the order passed u/S. 127 of the Income Tax Act. In the present case also a similar reason has been assigned for transferring the cases to Indore and, therefore, this Court is of the considered view that no interference is called for in the peculiar facts and circumstances of the case. The issue relating to transfer on the ground of effective --- 27 --- and co-ordinated investigation has been dealt with in depth by the Division Bench of the High Court of Gujarat in the case of Shree Ram Vessel Scrap (P) Ltd., Vs. Commissioner of IncomeTaxreported in (2013) 215 Taxman 203 (Gujarat). The Division Bench of the Gujarat High Court, in paragraphs 17 to 25 has held as under : 17.We would therefore, like to express our opinion on the issue. The issue relating to transfer on the ground of effective --- 27 --- and co-ordinated investigation has been dealt with