Mat/141/2023 Of Nouvelle Advisory Services Pvt Ltd v. Assistant Commissioner Of Income Tax Circle 13(1) ,Kol And Ors

Item No.9. IN THE HIGH COURT OF JUDICATURE AT CALCUTTACIVIL APPELLATE JURISDICTIONAPPELLATE SIDE HEARD ON: 17.02.2023 DELIVERED ON: 17.02.2023 CORAM: THE HON’BLE MR. JUSTICE T. S. SIVAGNANAM AND THE HON’BLE MR. JUSTICE HIRANMAY BHATTACHARYYA M.A.T. No. 141 of 2023withI.A. No.CAN 1 of 2023I.A. No.CAN 2 of 2023 Nouvelle Advisory Services Private Limited.Vs. Assistant Commissioner of Income Tax, Circle 13(1), Kolkata & Ors. Appearance:-Mr. Pratyush Jhunjhunwala Ms. Debanjana De … for the appellant. Ms. Smita Das De … for the respondents. JUDGMENT (Judgment of the Court was delivered by T.S. SIVAGNANAM, J.) 1. We have heard Mr. Jhunjhunwala, learned counsel for theappellant/applicant and Ms. Das De, learned standing counsel forthe respondents. We have perused the affidavit filed in supportof the application for condonation of delay and we are satisfiedthat sufficient cause have been shown in preferring the instantappeal. Hence, the delay in filing the appeal is condoned andthe application for condonation of delay being CAN 1 of 2023 isallowed. 2. This intra-Court appeal is directed against the order dated24[th] November, 2022 passed by the learned Single Bench in W.P.A.No.25454 of 2022. The learned Single Bench had entertain thewrit petition, directed the respondents to file affidavit-in-opposition after noting the submissions made by the learnedAdvocate for the appellant. The order reads as follows:- “Heard learned advocates appearing for theparties. I find in this matter that the file of thepetitioner has already been transferred underSection 127 of the Income Tax Act, 1961 to Kanpurjurisdiction sometimes in the year 2021 and as suchat the motion stage this Court cannot pass theinterim order of transferring back the file toKolkata by setting aside the impugned order oftransfer without giving the respondent Income Tax Authority opportunity to file affidavit-in-opposition for final adjudication of the matter. Let the respondents file affidavit-in-opposition within four weeks, petitioner to filereply thereto, if any, within two weeks thereafter.List this matter for final hearing in the monthlylist of February, 2023.At the time of hearing, parties should be readywith the short written notes of arguments. It is clarified that the pendency of this writpetition will not be a bar for the authorityconcerned to proceed with the assessment proceedingin the matter.” 3. The appellant is aggrieved by that portion of the orderwhere the learned Single Bench had observed that the pendencyof the writ petition will not be a bar for the authorityconcerned to proceed with the assessment proceedings in thematter. 4. The learned Senior Advocate appearing for the appellantwould contend that the transfer of jurisdiction passed pursuantto the order dated 29[th] July, 2021 is vitiated on account offailure to follow the mandatory procedure under Section 127 ofthe Act in and by which the assessee is entitled to anopportunity of being heard before the assessment jurisdiction It is clarified that the pendency of this writpetition will not be a bar for the authorityconcerned to proceed with the assessment proceedingin the matter.” 3. The appellant is aggrieved by that portion of the orderwhere the learned Single Bench had observed that the pendencyof the writ petition will not be a bar for the authorityconcerned to proceed with the assessment proceedings in thematter. 4. The learned Senior Advocate appearing for the appellantwould contend that the transfer of jurisdiction passed pursuantto the order dated 29[th] July, 2021 is vitiated on account offailure to follow the mandatory procedure under Section 127 ofthe Act in and by which the assessee is entitled to anopportunity of being heard before the assessment jurisdiction is transferred to the file of a different assessing officer. Infact, this submission has been noted by the learned SingleBench in the impugned order. 5. The order impugned in the writ petition dated 29[th] July, 2021states that consequent to search and survey operation conductedin the case of the appellant, it has been proposed to transferthe jurisdiction of the case from Assistant Commissioner ofIncome Tax / Deputy Commissioner of Income Tax, Circle 13(1),Kolkata to Deputy Commissioner of Income Tax, Central Circle 1,Kanpur, it is the submission of the appellant that no searchand survey operations were conducted on the appellant. Ms.Smita Das De, learned senior standing counsel appearing for therespondents, would submit that nexus has been establishedbetween the assessee on whom search and survey operation havebeen conducted and that of the appellant assessee andtherefore, for administrative convenience, the assessment hadbeen transferred to Central Circle 1, Kanpur. 6. Section 127 of the Act of 1961 gives power to transfercases. It states that the Principal Director General orDirector General or Principal Chief Commissioner or ChiefCommissioner or Principal Commissioner of Commissioner mayafter giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, andafter recording his reasons for doing so, transfer any casefrom one or more Assessing Officers subordinate to him (whetherwith or without concurrent jurisdiction) to any other AssessingOfficer or Assessing Officers (Whether with or withoutconcurrent jurisdiction) also subordinate to him. 7. Thus, the language of Section 127 is clear that the assesseeshould be given a reasonable opportunity of being heard in thematter before the power under Section 127 of the Act isinvoked. The statute is also clear that such opportunity ofbeing heard is to be given wherever it is possible to do so.If the authority proposes to dispense with the opportunity ofhearing, the statute states that reasons have to be reocrde3dfor not providing such an opportunity. On perusal of the orderimpugned in the writ petition dated 29[th] July, 2021, we findthat no such reasons have been recorded by the authority fordispensing with the opportunity of personal hearing as no showcause notice was issued to the assessee prior to order oftransfer. 8. In any event, the learned Single Bench was of the opinionthat the appellant had made out a prima facie case forentertaining the writ petition. But, however, if the assessment proceedings are to be proceeded by the assessingauthority at Kanpur, then the writ petition itself would becomeinfructuous. In any event, we are of the view that since noreasons have been recorded by the authority for dispensing withthe opportunity of being heard, we find that there are no suchreasons to do so. Therefore, the authority is bound to issuenotice to the appellant and afford them a reasonableopportunity of being heard before a decision is taken. 9. For such reason, we are inclined to remand the matter backto the authority for a fresh decision. In the result, theappeal stands disposed of along with the writ petition bydirecting the appellant to treat the order passed by thePrincipal Commissioner of Income Tax-5, Kolkata dated 29[th] July,2021 as a show cause notice and the appellant shall submittheir objection within fifteen days from the date of receipt ofthe server copy of this judgment and order after which thePrincipal Commissioner of Income Tax shall afford anopportunity of hearing to the authorised representative of theassessee and pass a speaking order on merit and in accordancewith law. 10. It appears that consequent upon the order dated 29[th] July,2021, the assessing authority in Kanpur has taken up the re- assessment proceedings and has passed an order dated 30[th] July, 2022 under Section 148A(d) of the Act and also issued a notice under Section 148 dated 30[th] July, 2022. 11. In the light of the above direction issued by us, the order passed under Section 148A(d) of the Act dated 30[th] July, 2022 and the notice issued under Section 148 dated 30[th] July, 2022 shall be kept in abeyance and shall abide by the fresh order that may be passed by the Principal Commissioner of Income Tax –5, Kolkata in terms of the above direction. 12. There shall be no order as to costs. 13. Urgent photostat certified copy of this order, if applied for, be furnished to the parties expeditiously upon compliance of all legal formalities. (T.S. SIVAGNANAM, J) I agree, (HIRANMAY BHATTACHARYYA, J.)