As The Investigation Against M/S. Falcon Marine Private Ltd., Exports Private Ltd., Requires A Coordinated Effort And For That Purpose One Assessing Officer Was v. Central Board Of Direct Taxes, New Delhi And Others[1] And Judgment Of Madras High Court In Snj Breweries Pvt. Ltd. V. The Principal Director Of Income Tax And

APHC010470702024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3516] TUESDAY, THE FOURTH DAY OF MARCH TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE B KRISHNA MOHAN THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY WRIT PETITION NO: 24184/2024 Between: Bhogireddy Venkata Satya Hanuman ...PETITIONER AND The Principal Commissioner Of Income Tax Central ...RESPONDENT(S)and Others Counsel for the Petitioner: 1.C SANJEEVA RAO Counsel for the Respondent(S): 1.ANUP KOUSHIK KARAVADI The Court made the following: THE HONOURABLE SRI JUSTICE B. KRISHNA MOHAN AND THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY WRIT PETITION NO.24184 of 2024 ORDER:(Per Hon’ble Sri Justice Nyapathy Vijay) 1. The present Writ Petition is filed questioning the Proceedings issued by Respondent No.1 dated 17.01.2024 under Section 127 of the Income Tax Act, 1961 in transferring the case of the Petitioner from Central Circle-2, Bhubaneswar to Central Circle-1, Bhubaneswar. 2. The Petitioner pleaded that he is a Fish Commission Merchant and doing business. While so, search and seizure under Section 132 and survey operations under Section 133A of the Act were conducted at various locations of M/s. Falcon Marine Private Ltd., and others, who were engaged in shrimp sale, manufacturing of Iron and Steel, mining and excavation of Iron Ore and Manganese etc., at Odisha, Chattisgarh, West Bengal and Andhra Pradesh on 01.06.2023. Pursuant to the aforesaid search, the Petitioner’s case was also brought under Section 132 of the Act. On 04.07.2023 summons were issued under Section 131(1A) of the Act, wherein the Petitioner was called upon to produce books of account or documents to be produced. 3. While so, the Respondent No.1 issued a notice dated 26.10.2023 under Section 127 of the Act calling for objections from the Petitioner for the proposed centralization of the case of the Petitioner from Central Circle-2, Bhubaneswar to Central Circle-1, Bhubaneswar. In the said notice, it was mentioned that all cases pertaining to M/s. Falcon Marine Private Ltd., and Group were to be centralized to DC/ACIT, Central Circle-1, Bhubaneswar to carry on coordinated investigation and detailed analysis of seized material. 4. The Petitioner submitted his objections on 14.11.2023 stating that as the central circle proceedings are physical in nature, it would be difficult to travel and attend personal hearings and submit replies at Bhubaneswar, which is at a distance from their business. The Respondent No.1 overruled the objections and transferred the case of the Petitioner to Central Circle-1, Bhubaneswar, in exercise of powers under Section 127 of the Act. Questioning the same, the present Writ Petition is filed on two grounds i.e. that the impugned order is a non-speaking order contrary to the very provision and that no incriminating material was found by the Income Tax Department. 5. The Respondent No.1 filed Counter Affidavit stating that search and seizure under Section 132 and survey operations under Section 133A of the Act were conducted against M/s. Falcon Marine Private Ltd., and others on 01.06.2023 in four different States i.e. Odisha, Chattisgarh, West Bengal and Andhra Pradesh. In the course of search operations, the Petitioner had business and financial transactions with M/s. Falcon Marine Private Ltd., and others. It was stated that certain incriminating material was found during the search operations under Section 132 of the Act between M/s. Falcon Marine Private Ltd., and the Petitioner, which were marked as HO-18 and HO-19. 5. The Respondent No.1 filed Counter Affidavit stating that search and seizure under Section 132 and survey operations under Section 133A of the Act were conducted against M/s. Falcon Marine Private Ltd., and others on 01.06.2023 in four different States i.e. Odisha, Chattisgarh, West Bengal and Andhra Pradesh. In the course of search operations, the Petitioner had business and financial transactions with M/s. Falcon Marine Private Ltd., and others. It was stated that certain incriminating material was found during the search operations under Section 132 of the Act between M/s. Falcon Marine Private Ltd., and the Petitioner, which were marked as HO-18 and HO-19. 6. It was also pleaded that during the course of simultaneous search under Section 132 of the Act against Petitioner and his father Sri D. Pitchaiah, certain digital data was seized and was marked as A-BVSH-BMV-RES-69. Further plea was that there was suppression of purchases of Rs.9,33,97,666/- by the petitioner for the Financial Year 2021-22 and this discrepancy was not explained in the Statement under Section 131(1A). 7. As the investigation against M/s. Falcon Marine Private Ltd., Exports Private Ltd., requires a coordinated effort and for that purpose one Assessing Officer was appointed to handle all group cases, so that he gets a bird’s view of the entire investigation. Accordingly, the case of the Petitioner was transferred to Central Circle-1, Bhubaneswar vide impugned orders after due opportunity. The Petitioner filed rejoinder and relied on the Judgment of Ajantha Industries and Others v. Central Board of Direct Taxes, New Delhi and Others[1] and Judgment of Madras High Court in SNJ Breweries Pvt. Ltd. v. The Principal Director of Income Tax and Others[2]. 8. The Respondents filed a Memo, wherein Proceedings of the Department dated 19.06.2023, 09.10.2023, 19.10.2023 and 17.01.2024 pertaining to centralization of cases of M/s. Falcon Marine Private Ltd., were filed. As per the proceedings dated 19.10.2023 passed by the Respondent No.1 as many as 28 cases of various individuals were transferred to Central Circle-1, Bhubaneswar, with whom M/s Falcon Marine Private Ltd., had financial transactions, were transferred to Central Circle-1 to DCIT, Bhubaneswar. 9. Heard Sri C. Sanjeeva Rao, learned counsel for the Petitioner and Sri Anup Koushik Karvadi, learned Standing Counsel for Income Tax appearing for the Respondents. Heard Sri C. Sanjeeva Rao, learned counsel for the Petitioner and 10. The principal contention of the counsel for the Petitioner was that the impugned order was passed without giving the Petitioner a reasonable opportunity of being heard and after recording reasons. 11. The Standing Counsel appearing for the Respondents contended that the impugned order was a conscious decision taken by the Respondent No.1 following the Central Board of Direct Taxes Circular and pursuant to that decision, the investigation was centralized to DCIT, Bhubaneswar and a number of cases were transferred to the said office. It was further contended that no special treatment can be given to the Petitioner. 1 (1976) 1 SCC 1001 2 2024 SCC OnLine Mad 5606 12. This Court having seen the impugned order is of the opinion that since a number of cases were transferred to DCIT, Bhubaneswar regarding investigation against M/s. Falcon Marine Private Ltd., there would not be any difference even if the Petitioner is physically heard and such hearing would alter the result and would be a useless formality. In such a situation, courts need not issue directions to comply with the ritual of hearing as held in Ashok Kumar Sonkar v. Union of India.[3] “A court of law does not insist on compliance with useless formality. It will not issue any such direction where the result would remain the same, in view of the fact situation prevailing or in terms of the legal consequences.” 1 (1976) 1 SCC 1001 2 2024 SCC OnLine Mad 5606 12. This Court having seen the impugned order is of the opinion that since a number of cases were transferred to DCIT, Bhubaneswar regarding investigation against M/s. Falcon Marine Private Ltd., there would not be any difference even if the Petitioner is physically heard and such hearing would alter the result and would be a useless formality. In such a situation, courts need not issue directions to comply with the ritual of hearing as held in Ashok Kumar Sonkar v. Union of India.[3] “A court of law does not insist on compliance with useless formality. It will not issue any such direction where the result would remain the same, in view of the fact situation prevailing or in terms of the legal consequences.” 13. As regards the non-mentioning of the reasons, the show cause notice dated 26.10.2023P gives the reasons for the proposed transfer i.e. centralisation of cases against M/s Falcon Marine and group for coordinated investigation and detailed analysis of the material and it is for that reason the impugned order was passed. Therefore, this Court does not find any reason to interfere with the impugned order. dated 26.10.2023P gives the reasons for the proposed transfer 14. In view of the above, we do not find any merit in the Writ Petition and the same is accordingly dismissed. There shall be no order as to costs. As a sequel, pending applications, if any, shall stand closed. the same is accordingly dismissed. There shall be no order as to costs. ____________________ B. KRISHNA MOHAN, J Date: .02.2025 IS __________________ NYAPATHY VIJAY, J IS THE HONOURABLE SRI JUSTICE B. KRISHNA MOHAN AND THE HONOURABLE SRI JUSTICE NYAPATHY VIJAY WRIT PETITION NO.24184 of 2024 Date: .02.2025