M/S.mrl Posnet Private Limited(Rep. By Its Chief Financial Officer Mr.b.sundarage-50 Years) v. The Principal Commissioner Of Income Tax, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved On 12.09.2019Delivered On 27.09.2019 CORAM THE HONOURABLE MR. JUSTICE K.RAVICHANDRABAABU W.P.Nos.6334 and 6336 of 2019andW.M.P.No.10771, 7170 and 7172 of 2019 M/s.MRL Posnet Private Limited(Rep. by its Chief Financial Officer Mr.B.SundarAge-50 years),8/17, B Block, 1st Floor,Sunnyside, Shafte Mohammed Road,Nungambakkam,Chennai 600 034,PAN: ... Petitioner in both W.Ps. Vs 1.The Principal Commissioner of Income Tax, Chennai-4, 301, Wanaparthy Block, Aayakar Bhavan, 121, Mahatma Gandhi Road, Nungambakkam, Chennai 600 034. 2.The Deputy Commissioner of Income Tax, Central Circle-1 (1), 3rd Floor, Central Revenues Building, Queen's Road, Bangalore 560 001. ... Respondents in both W.Ps. Prayer in W.P.No.6334/2019:Writ Petition filed under Article 226of the Constitution of India praying to issue a Writ ofCertiorari to call for the records of the first respondentbearingNotificationNo.10/2018-19inC.No.27/Centralisation/PCIT-4/2017-18 dated 13.02.2019 and quashthe same. Prayer in W.P.No.6336/2019:Writ Petition filed under Article 226of the Constitution of India praying to issue a Writ ofCertiorari to call for the records of the second respondentbearing F.No.AAECP7679M/DCIT/CC-1(1)/2018-19 dated 19.02.2019and quash the same. For Petitioner : Mr.Sandeep Bagmar in both W.Ps. For Respondents : Mrs.Hema Muralikrishnan, in both W.Ps. Senior Standing Counsel (I.T.) C O M M O N O R D E R W.P.No.6364 of 2019 is filed challenging the notificationissued by the first respondent dated 13.02.2019, transferringthe petitioner/assessee's case from ITO Corporate WD(4)(1),Chennai-2 DCIT Central Circle (1), Bangalore under Section 127of Income Tax Act, 1961 for the purpose of a coordinatedinvestigation. 2. W.P.No.6336 of 2019 is filed challenging the proceedingsof the second respondent dated 19.02.2019, wherein and whereby,the petitioner/assessee was called upon to produce the books ofaccounts and furnish in writing and verified in the prescribedmanner information called for and on the points or mattersspecified therein. 3. Both these writ petitions are filed by one and the sameassessee. While the first writ petition is filed challengingthe transfer of the assessee's case from Chennai to Bangalore,the second writ petition is filed against the consequentialnotice issued by the Assessing Officer at Bangalore. Therefore,the facts and circumstances warranting the filing of these twowrit petitions are one and the same and they are as follows: The petitioner is a Private Limited Company incorporatedunder the Companies Act, 1956. It is engaged in the business ofproviding point of sale technology infrastructure to banks andconsumer service providers. The petitioner Company was acquiredby the Worldline Group, France through its Singapore subsidiaryi.e. Worldline IT and Payment Services (Singapore) Pte. Ltd.(Worldline Singapore) in October 2017. Prior to theacquisition, one Kishore Kothapalli and Satish P.Chandra wereDirectors of the petitioner Company. They resigned from theDirectorship of the petitioner with effect from 25.10.2017. On01.02.2018, a survey under Section 133A of the Income Tax Act,1961 was conducted at the office premises of the petitioner atChennai. During the course of survey proceedings, thepetitioner had produced share purchase agreement dated29.09.2017, Indemnity escrow agreement dated 29.09.2017 andtransaction escrow agreement dated 29.09.2017 to the AssistantDirector of Income Tax (Inv.) Unit-3, which had been impounded.Pursuant to the said survey, a show cause notice dated 04.06.2018 was issued by the first respondent, asking thepetitioner as to why centralization of the petitioner's caseshould not be done with the Assessing Officer, Bangalore, beingthe second respondent. The first respondent in the said noticebarely stated that there are substantial linkages between thepetitioner and Satish P Chandra and his Company M/s GTPL,without exactly stating as to what those linkages are. Thepetitioner vide its reply dated 13.06.2018, has specificallystated that the said Satish P Chandra, Kishore Kothapalli andM/s.GTPL did not play any part in the management of thepetitioner ever since Worldline Singapore became 100% owner ofthe petitioner. It was specifically submitted that thepetitioner had no connection with those persons. It was alsostated that the petitioner's operations were in Chennai alongwith its registered officer and all its records are also inChennai. Therefore, the petitioner requested that theassessments may be completed at the present jurisdictionaloffice at Chennai, as it would cause immense hardship, if thecase is to be transferred to Bangalore. The first respondentissued a notification dated 26.06.2018, without considering themerits of the petitioner's reply and without providing anyreasons, transferring the petitioner's case from Chennai toBangalore. Pursuant to the said transfer order, a notice dated18.07.2018 was also issued by the second respondent. Aggrievedagainst those proceedings, the petitioner filed W.P.Nos.19415and 19416 of 2018. This Court, by order dated 26.06.2018,quashed the order of transfer and remitted the matter back tothe first respondent to pass fresh order on merits and inaccordance with reasons. In sofaras the consequential noticeissued by the second respondent dated 18.07.2018 is concerned,this Court directed the said notice to be kept in abeyance.Pursuant to the order of this Court, the first respondent passedthe present impugned order of transfer and consequently, thesecond respondent issued the notice under Section 142(1) readwith Section 129 of the said Act. Hence, these present writpetitions are filed. 4. A counter affidavit is filed on behalf of therespondents. The case of the respondents is as follows: The petitioner Company became 100% owned Company byWorldline Group only after purchasing the shares from one SatishChandra, Kishore Kothapalli and M/s.Global Tech Park Pvt. Ltd.The purpose of centralization of cases is to investigate thetransactions among the various related entities during the lastsix previous years to the previous year in which the search andsurvey operations are conducted and to assess the income of allthe persons concerned for the assessment years in question.Since the transfer of shares had happened in October 2017, whichis well within six years prior to previous year, in which surveywas conducted, the transactions needs to be investigated in The petitioner Company became 100% owned Company byWorldline Group only after purchasing the shares from one SatishChandra, Kishore Kothapalli and M/s.Global Tech Park Pvt. Ltd.The purpose of centralization of cases is to investigate thetransactions among the various related entities during the lastsix previous years to the previous year in which the search andsurvey operations are conducted and to assess the income of allthe persons concerned for the assessment years in question.Since the transfer of shares had happened in October 2017, whichis well within six years prior to previous year, in which surveywas conducted, the transactions needs to be investigated in order to have a clear picture before the final assessment ofincome is made. Therefore, it cannot be said that there was nonexus/linkage. Though the nexus/linkage, which may seem to beabsent on the date of survey, the purpose of centralization isnot limited to investigate the transactions, if there existsnexus/linkage on the date of survey only, but of six years priorto the year also, in which search and survey happened.Provisions of Section 127 is only for necessitating the transferof the petitioner for jurisdictional purpose and not foradjudicatingtheissuesinvolved.Moreover,theseized/impounded materials are in the possession of DCIT,Central Circle, Bengaluru and the actual financial, commercialor other relevant nexus will be known only after the coordinatedinvestigation by the DCIT, Bengaluru. The reasons werecommunicated to the petitioner and a speaking order in thisregard has been passed on 13.02.2019. No new facts and reasonshave been given enlarging the scope of the show cause notice.As per the provisions of Section 127(1) and (2) of the IncomeTax Act, 1961, the Principal Commissioner of Income Tax cantransfer any case from one Assessing Officer to any otherAssessing Officer, after giving the assessee a reasonableopportunity of being heard in the matter, wherever it ispossible to do so and after recording his reasons for doing so,by passing an order. In view of the above enabling provision,there is no necessity for the Principal Commissioner of IncomeTax to provide the nature of investigation, as it is out ofscope of the provision. Since the seized/impounded materialsare also in the possession of the second respondent, the natureof investigation could not be provided. As long ascentralization is done in accordance with the provisions of theAct and for coordinated investigation and assessment, the sameis to be construed for the purpose of safeguarding the Revenueand in public interest. The inconvenience, if any to thepetitioner cannot stand in the way of public interest as long asnone of the rights of the petitioner like proper opportunity,right to carry on business etc., are affected. Therefore, boththe impugned proceedings were passed well within law. 5. The petitioner filed a reply to the counter affidavitfiled by the respondents, wherein it is stated as follows:The centralization cannot give unfettered powers to theofficers to investigate transactions, which are admittedlydisclosed and income therefrom is offered to tax. The reasonssupplied by the respondents for transfer did not form part ofthe show cause notice dated 04.06.2018. The impugned order waspassed under assumption that the nexus/linkage may exist inrespect of the six years prior to the year in which search orsurvey conducted. Therefore, the entire action is contrary tothe provisions of Section 127 of the Act. The first respondenterroneously exercised powers under Section 127 of the Act 5. The petitioner filed a reply to the counter affidavitfiled by the respondents, wherein it is stated as follows:The centralization cannot give unfettered powers to theofficers to investigate transactions, which are admittedlydisclosed and income therefrom is offered to tax. The reasonssupplied by the respondents for transfer did not form part ofthe show cause notice dated 04.06.2018. The impugned order waspassed under assumption that the nexus/linkage may exist inrespect of the six years prior to the year in which search orsurvey conducted. Therefore, the entire action is contrary tothe provisions of Section 127 of the Act. The first respondenterroneously exercised powers under Section 127 of the Act without recording reasons to justify the necessity ofcoordinated investigation. In the absence of any agreement forthe purpose of transfer under Section 127(2) of the Act betweenthe authorities of equal rank, any transfer made under thisSection is bad in law and illegal. In the present case, thereis no agreement by the first respondent for transfer asrequested by the Principal Commissioner of Income Tax (Central),Bangalore. The very admission of the respondent that the natureof transaction, which requires verification and investigation,is unknown means that the entire exercise is without any basisand without material on record. Therefore, transfer underSection 127 cannot be made merely for facilitating coordinatedinvestigation. 6. Mr.Sandeep Bagmar, learned counsel appearing for thepetitioner submitted as follows: The impugned order is contrary to the scope and ambit of127 (2)(a) of the Income Tax Act. There must be an agreementbetween the two Commissioners and such agreement must bespecifically stated in the order of transfer. In this case, nosuch agreement is referred to or reflected in the order oftransfer. Thus, it violates the mandatory requirement ofSection 127(2)(a). On this aspect, the following decisions arerelied on: i) 2017 (12) SCC 805, Noorul Islam Educational Trust vs. CIT andothers; ii) (2011) 332 ITR 97 (Madras), Noorul Islam Educational Trustvs. CIT and others; b) When the show cause notice refers as though the proposedtransfer was for coordinated investigation, the impugned orderstates reasons beyond the show cause notice. The impugned orderassigns reasons on assumptions without material. Even accordingto the respondents, as spelt out in their counter, nexus will beknown only after investigation. Therefore, it is evident thatas on date, no material, no linkage for transferring the case.No material or transaction is brought down, which necessitatesfor coordinated investigation. While the show cause notice istotally silent anything about the past six years, the impugnedorder refers the same. Therefore, the impugned order is beyondthe scope of show cause notice. In this aspect, the followingcase laws are relied on: i) 1976 (102) ITR 281 (SC); Ajantha Industries vs. CBDT; ii) 2004 (186) CTR 428 (P&H); Rajesh Mahajan vs. CIT; iii) 2016 (387) ITR 223 (Mum); Zodiac Developers (P) Ltd. vs. Pr.CIT; iv) 2015 (234) Taxmann 468, RSG Foods (P) Ltd. vs. Commissioner of Income Tax. 7. Per contra, Mrs.Hema Muralikrishnan, learned SeniorStanding Counsel appearing for the respondents submitted asfollows: i) 1976 (102) ITR 281 (SC); Ajantha Industries vs. CBDT; ii) 2004 (186) CTR 428 (P&H); Rajesh Mahajan vs. CIT; iii) 2016 (387) ITR 223 (Mum); Zodiac Developers (P) Ltd. vs. Pr.CIT; iv) 2015 (234) Taxmann 468, RSG Foods (P) Ltd. vs. Commissioner of Income Tax. 7. Per contra, Mrs.Hema Muralikrishnan, learned SeniorStanding Counsel appearing for the respondents submitted asfollows: a) This is the second round of litigation on the very sameissue of transfer of case. The petitioner has not specificallyraised the question with regard to the agreement between the twoCommissioners either in this writ petition or in the earlierwrit petition. The only objection raised in the earlier writpetition was that the transfer was made without assigningreasons. Therefore, this Court has set aside the order oftransfer and remitted the matter back to the Authority concernedto pass fresh order expressing the reasons for transfer.Consequently, the reasons for transfer are now communicated.Therefore, the learned counsel for the petitioner is estoppedfrom raising the ground with regard to the agreement between thetwo Commissioners, while making his oral submissions. When thisground was not raised in the first writ petition, the samecannot be raised in the second round. Even otherwise, agreementbetween the two Commissioners can be inferred from theirconduct. Therefore, it is not necessary to specifically statein the order of transfer that an agreement was reached betweenthe two Commissioners. On this aspect, (2017) 86 Taxmann.com39 (Guj), Genus Electrotech Ltd. vs. Union of India, is reliedon. b) On the very same day, survey was conducted at thepetitioner's premises and GTPL, Bangalore. GTPL held 24.56shares in the petitioner's Company. This 24.56% shares is soldto the petitioner's owner in the month of October 2017. Thesearch was conducted in February 2018. Records were seized.Therefore, financial implication between the parties out of suchtransfer of shares can definitely be inferred. Merelytransferring the file from one Office to the other Office doesnot cause prejudice to the assessee. Mere inconvenience cannotbe a ground to refuse or reject the transfer. Since there wassearch and survey at GTPL, Bangalore, the Assessing Officer,Bangalore, has power to do block assessment. The impugned orderis not beyond the scope of the show cause notice. On the otherhand, it only gave the reasons. The case laws relied on by thelearned counsel for the petitioner are factually distinguishableand thus, not applicable to the facts and circumstances of thepresent case. 8. Heard the learned counsel for the petitioner and thelearned Senior Standing counsel for the respondents and perusedthe materials placed before this Court. 8. Heard the learned counsel for the petitioner and thelearned Senior Standing counsel for the respondents and perusedthe materials placed before this Court. 9. The petitioner is aggrieved against the transfer of thecase from Chennai to Bangalore. Earlier similar order oftransfer under Section 127 of the Income Tax Act was passedtransferring the petitioner's case from ITO, Corporate Ward 4(1), Chennai to DCIT, Central Circle 1 (1), Bangalore. The saidorder dated 26.06.2018 was put to challenge before this Courtby the petitioner in W.P.No.19415 of 2018. The only objectionraised therein against transfer was that the order impugnedtherein did not assign specific reasons for transfer exceptstating that the objections raised by the assessee cannot be thebasis for non centralising the case and that the materials,which were seized and impounded, need to be furtherinvestigated. This Court, after hearing both sides, allowed thewrit petition and set aside the said order dated 26.06.2018 andremitted the matter back to the first respondent to pass a freshorder on merits and in accordance with law with reasons within aperiod of two weeks. This Court passed the said order only onthe ground that the first respondent has to record his reasonsfor transferring the case, as required under Section 127(1) ofthe Income Tax Act, by specifically observing that the reasonsstated in the show cause notice are only prima facie view of theAuthority and therefore, subsequent order passed shouldnecessarily state the reasons. It is to be noted, at thisjuncture that except raising the above objection, the petitionerdid not raise any other objections, as has been raised in thiswrit petition. It is not the case of the petitioner that thequestion now raised by them with regard to agreement between twoCommissioners was not available at the time of filing theearlier Writ Petition. It is not a new event which had come intoexistence after the filing and disposal of the earlier WritPetition. On the other hand, this issue was very much availableto the petitioner even at that time and however, they have notchosen to raise the same. It is well settled that when achallenge is made against an order, all the grounds availableand legally sustainable should be raised at the first instance.Piece meal raising of grounds one after another in successivewrit petitions, in respect of the very same challenge is notpermissible, since such kind of practice, if allowed, would onlyresult in entertaining successive writ petitions on the sameissue by the same party. 10. Keeping the above position in mind, let me consider thecase further. Consequent upon the said order made inW.P.No.19415 of 2018 dated 11.12.2018, a fresh order dated13.02.2019 in Notification No.10/2018-2019 was issued by thefirst respondent, which is impugned in this writ petition.Perusal of the said detailed order would show that the firstrespondent has considered the objections raised by thepetitioner, dealt with the same and thereafter, chosen to pass the order of transfer of the petitioner's case once again fromITO, Corporate Ward 4(1), Chennai to DCIT, Central Circle 1(1),Bangalore under Section 127 of the Income Tax Act, 1961, for thepurpose of a coordinated investigation, which is necessary forproper assessment of the income. 11. A careful perusal of the said order would show thatapart from saying that the transfer is made for the purpose ofcoordinated investigation, the first respondent has observed atparagraph No.9.2 as follows: "...9.2 The objections raised above are dealt as under: the order of transfer of the petitioner's case once again fromITO, Corporate Ward 4(1), Chennai to DCIT, Central Circle 1(1),Bangalore under Section 127 of the Income Tax Act, 1961, for thepurpose of a coordinated investigation, which is necessary forproper assessment of the income. 11. A careful perusal of the said order would show thatapart from saying that the transfer is made for the purpose ofcoordinated investigation, the first respondent has observed atparagraph No.9.2 as follows: "...9.2 The objections raised above are dealt as under: 1) So far as objection of non-existentnexus/linkage between the assessee and others (Mr.SatishChandra, Mr.Kishore Kothapalli and M/s.Global Tech ParkLtd) on the date of survey is concerned the fact is thatthe assessee company became 100% owned company byWorldline Group only after purchasing the shares fromMr.Satish Chandra, Mr.Kishore Kothapalli and M/s.GlobalTech Park Pvt Ltd. before the date of survey. Theacquisition of the assessee company by Worldline Grouphappened in October 2017 by way of transfer of shares byMr.Satish Chandra, Mr.Kishore Kothapalli and M/s.GlobalTech Park Pvt Ltd. The purpose of centralization ofcases is to investigate the transactions among thevarious related entities during the last six previousyears prior to the previous year in which search andsurvey are conducted in addition to the previous year inwhich the search and survey operations are conducted andto assess income of all the persons concerned for theassessment years in question. Since, the transfer ofshares happened in October 2017 which is well within 6years prior to previous year in which survey wasconducted, the transactions need to be investigated inorder to have a clear picture before the finalassessment of income is made in all the related cases.Hence, it cannot be said that there was no nexus/linkageas claimed by the assessee. In fact there is indeed anexus/linkage which may seem to be absent on the date ofsurvey, but as mentioned earlier the purpose ofcentralization is not limited to investigate thetransactions if there exists nexus/linkage on the dateof survey only, but of six years prior to the year also,in which search and survey happen. Since the basis ofobjection itself is not in conformity with theprovisions of law, this objection is rejected. 2) So far as objection of no major document foundis concerned it must be mentioned here that thematerials found during search and survey are consideredand investigated during assessment proceedings only. In any case this cannot be taken as basis to objectcentralization, because the centralization is done inthe public interest to safeguard the revenue. And whileinvoking the provisions of section 127 i.e. at thisstage of order of centralization, consideration ofdocuments and giving 'detail' reasons are not needed ashas been held by various courts. 3) So far as inconvenience in attending proceedingsat Bangalore is concerned, the objection is notacceptablebecausetheassesseecompanyissupported/assisted by learned counsels. And in any casethis cannot be taken as objection by the assesseebecause the centralization being an administrativeprocess is being done in the public interest tosafeguard revenue. On all the above issues the relevant observationsof Gujarat High Court in case of Shree Ram Vessel ScrapPvt. Ltd. Vs. Commissioner of Income Tax-VI (SpecialCivil Application No.16883, 16886, 16888 & 16896 of2012) dated 23/01/2013 are worth mentioning which arereproduced as under: 3) So far as inconvenience in attending proceedingsat Bangalore is concerned, the objection is notacceptablebecausetheassesseecompanyissupported/assisted by learned counsels. And in any casethis cannot be taken as objection by the assesseebecause the centralization being an administrativeprocess is being done in the public interest tosafeguard revenue. On all the above issues the relevant observationsof Gujarat High Court in case of Shree Ram Vessel ScrapPvt. Ltd. Vs. Commissioner of Income Tax-VI (SpecialCivil Application No.16883, 16886, 16888 & 16896 of2012) dated 23/01/2013 are worth mentioning which arereproduced as under: "The contention of the petitioner that theDepartment should have furnished information with them(as claimed by them in their reply) is not at all soundas the Department cannot be compelled or required at theinitial stage to disclose the "material" or"information" as it may "embarrass or prejudice" theassessment. The legal position is crystal clear andsettled by a catena of the decisions of this Court andthe apex court on this issue. This Court cannot go intothe "sufficiency" of the reasons." "Undoubtedly, the order of transfer of assessmentfile of an assessee to a far off place puts the assesseein a great inconvenience and ought not to be orderedunless necessary in public interest to safeguard revenuebycentralisationofcasesforco-ordinatedinvestigation. Such an order cannot be passedarbitrarily and can be justified only if there are validreasons. The principles of natural justice as well asthe statutory provision require that the reasons must berecorded in writing in the order itself and disclosed tothe assessee to enable the assessee to take its remediesagainst such an order. At the same time, the powerconferred for transfer cannot be interfered with havingregard to the object for which such power is conferred." 12. Perusal of the reasons stated at paragraph 9.2 of theimpugned order undoubtedly indicate that the transfer is madenot simply by stating that it was made for coordinatedinvestigation and on the other hand, the above reasons speak forthemselves justifying such intended coordinated investigation.As the reasons stated at paragraph 9.2 are in respect of factualaspects of the matter and that the investigation is yet to becompleted, any discussion on the above reasons and renderingfindings on the same, as regard to correctness or otherwise ofthose reasons, will not be proper at this stage, as it wouldamount to giving a finding in respect of those issues evenbefore the completion of the investigation. Therefore, thisCourt is of the firm view that the reasons stated in theimpugned proceedings are in conformity with the show causenotice already issued and therefore, the petitioner is notentitled to state that the reasons stated are beyond the scopeof the show cause notice. 13. The learned counsel for the petitioner relied on 1976102 ITR 281 (SC) (Ajantha Industries vs. CBDT). Perusal of thefacts of the said case would show that the assessee thereinquestioned the validity of the order of transfer passed by theCentral Board on the ground of violation of principles ofnatural justice, since before passing such order, no reasonswere given nor communicated to the assessee therein. The factsof the present case are totally different as discussed supra.Therefore, the above decision of the Apex Court is notapplicable to the present case. 13. The learned counsel for the petitioner relied on 1976102 ITR 281 (SC) (Ajantha Industries vs. CBDT). Perusal of thefacts of the said case would show that the assessee thereinquestioned the validity of the order of transfer passed by theCentral Board on the ground of violation of principles ofnatural justice, since before passing such order, no reasonswere given nor communicated to the assessee therein. The factsof the present case are totally different as discussed supra.Therefore, the above decision of the Apex Court is notapplicable to the present case. 14. The next decision relied on is reported in 2004 (186)ITR 428 (Rajesh Mahajan vs. CIT) of the Punjab and Haryana HighCourt. Perusal of the facts and circumstances of the said casewould also show that the impugned order of transfer therein onlystated that the transfer of assessment proceedings of theassessee therein was made for a coordinated investigation. Inthis case, I have already pointed out that paragraph 9.2 of theorder of transfer has clearly spelt out certain reasons.Therefore, it is to be noted that in the present case, thetransfer is made not by simply stating for a coordinatedinvestigation, but by furnishing the reasons as well in supportof such investigation. Hence, the above decision is alsofactually distinguishable. 15. 2015(234) Taxman 468 (RSG Foods (P) Ltd. vs.Commissioner of Income Tax), again a decision of the Punjab andHaryana High Court is relied on by the petitioner's counsel tocontend that mere suspicion cannot be sufficient for takingrecourse to action under section 127 of the said Act. I do notthink that the above decision, which is again factually distinguishable, would help the petitioner in any manner. Inthis case, it is evident that the impugned order was not madebased on mere suspicion. On the other hand, such suspicion isbased on the transactions entered between the parties, as isreferable to the documents seized. No doubt, the correctness orotherwise of such suspicion is a matter for investigation andtherefore, before concluding the investigation, it is better torefrain from expressing any view on such suspicion. Accordingly,I find that the above case law is also not applicable to thepresent case. 16. The decision of the Mumbai High Court reported in 2016(387) ITR 223 (Zodiac Developers (P) Ltd. vs. Pr.CIT relied onis also factually distinguishable, since the facts of the saidcase would show that the notice and the consequential order oftransfer are bereft of any particulars except to state that thetransfer is required for the sake of coordinated investigationalong with another connected case for administrativeconvenience. As discussed supra, in this case, the facts aredifferent and therefore, the above decision is also notapplicable to the present case. 17. Further contention of the petitioner that no material ortransaction is brought down which necessitates for coordinatedinvestigation, is also liable to be rejected for the reason thatthe petitioner is not entitled to get all those material detailsin respect of the transactions, which are sought to beinvestigated by way of coordinated investigation even before thecompletion of such investigation. In my considered view,disclosing those materials at this stage, that too, in the orderof transfer, would certainly affect and hamper the investigationprocess. Therefore, I find that the above contention of thepetitioner also cannot be sustained. 18. Main contention raised by the learned counsel for thepetitioner is that there is no agreement between the twoCommissioners. In other words, according to him, no agreementas required under Section 127(2)(a) of the Act was arrivedbetween the Bangalore Commissioner and Chennai Commissioner fortransferring the file from Chennai to Bangalore. Therefore, hecontended that in the absence of such agreement, the transfer isbad. 18. Main contention raised by the learned counsel for thepetitioner is that there is no agreement between the twoCommissioners. In other words, according to him, no agreementas required under Section 127(2)(a) of the Act was arrivedbetween the Bangalore Commissioner and Chennai Commissioner fortransferring the file from Chennai to Bangalore. Therefore, hecontended that in the absence of such agreement, the transfer isbad. 19. Before answering the above issue, it is relevant to noteat this juncture that this point was not at all raisedspecifically by the writ petitioner in the present writpetition. It is also to be noted that even in the earlier writpetition filed in W.P.No.19415 of 2018, this issue was notraised. However the learned counsel for the petitioner soughtto raise this issue first time before this Court orally by contending that it is a question of law based on mandatorystatutory requirement under Section 127(2)(a) and therefore,this Court can go into such issue and decide. 20. On the other hand, it is the contention of the learnedSenior Standing Counsel for the respondents that when the aboveissue has not been specifically raised either in the earlierwrit petition or in the present writ petition, the learnedcounsel for the petitioner is not entitled to raise the same,since there was no opportunity for the Revenue to deny suchcontention in their counter pleadings. I have already observedsupra that the grounds cannot be raised in piece meal insuccessive writ petitions in respect of the very same challenge.Admittedly, the above issue is not raised in the affidavit filedin support of the writ petition, except to say that the impugnedorder was passed in contrary to the relevant provision.However, this Court is not inclined to leave this issue at thisstage and on the other hand, would like to deal with such issueand answer the same as discussed hereunder, since it is raisedas a question of law. 21. Section 127 of the Income Tax Act, 1961 deals withPowers to transfer cases, which reads as follows: "127.Power to transfer cases: (1) The [Principal Director General or] DirectorGeneral or [Principal Chief Commissioner or] ChiefCommissioneror[PrincipalCommissioneror]Commissioner may, after giving the assessee areasonable opportunity of being heard in the matter,wherever it is possible to do so, and after recordinghis reasons for doing so, transfer any case from one ormore Assessing Officers subordinate to him (whetherwith or without concurrent jurisdiction) to any otherAssessing Officer or Assessing Officers (whether withor without concurrent jurisdiction) also subordinate tohim. (2) Where the Assessing Officer or AssessingOfficers from whom the case is to be transferred andthe Assessing Officer or Assessing Officers to whom thecase is to be transferred are not subordinate to thesame [Principal Director General or] Director Generalor [Principal Chief Commissioner or] Chief Commissioneror [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 aresubordinate are in agreement, then the [Principal Director General or Director General] or [PrincipalChief Commissioner or] Chief Commissioner or [PrincipalCommissioner or] Commissioner from whose jurisdictionthe case is to be transferred may, after giving theassessee a reasonable opportunity of being heard in thematter, wherever it is possible to do so, and afterrecording his reasons for doing so, pass the order ; (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 aresubordinate are in agreement, then the [Principal Director General or Director General] or [PrincipalChief Commissioner or] Chief Commissioner or [PrincipalCommissioner or] Commissioner from whose jurisdictionthe case is to be transferred may, after giving theassessee a reasonable opportunity of being heard in thematter, wherever it is possible to do so, and afterrecording his reasons for doing so, pass the 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 ordertransferring the case may, similarly, be passed by theBoard 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 theOfficial Gazette, authorise in this behalf. (3) Nothing in sub-section (1) or sub-section (2)shall be deemed to require any such opportunity to begiven where the transfer is from any Assessing Officeror Assessing Officers (whether with or withoutconcurrent jurisdiction) to any other Assessing Officeror Assessing Officers (whether with or withoutconcurrent jurisdiction) and the offices of all suchofficers are situated in the same city, locality orplace. (4) The transfer of a case under sub-section (1)or sub-section (2) may be made at any stage of theproceedings, and shall not render necessary the re-issue of any notice already issued by the AssessingOfficer or Assessing Officers from whom the case istransferred. Explanation : In section 120 and this section, the word“case”, in relation to any person whose name isspecified in any order or direction issued thereunder,means all proceedings under this Act in respect of anyyear which may be pending on the date of such order ordirection or which may have been completed on or beforesuch date, and includes also all proceedings under thisAct which may be commenced after the date of such orderor direction in respect of any year." 22. Perusal of the above provision of law would show that acase can be transferred from one Assessing Officer to the otherAssessing Officer or Assessing Officers, after giving theassessee reasonable opportunity of being heard and afterrecording the reasons for transfer. However, if the AssessingOfficer, from whom the case is to be transferred and the Assessing Officer, to whom the case is to be transferred, arenot subordinate to the same Commissioner, the Commissioner fromwhose jurisdiction, the case is to be transferred, would passorder after giving the assessee, a reasonable opportunity ofbeing heard and after recording his reasons, if the transferringCommissioner and the Commissioner, within whose jurisdiction thecase is transferred, are in agreement for such transfer. Acareful perusal of Section 127(2)(a) would show that only whenthose two Commissioners are in agreement, the transferringCommissioner would issue notice to the assessee and pass ordersby giving reasons, that too after giving the assessee areasonable opportunity of being heard. Therefore, it is evidentthat only when there is an agreement between the twoCommissioners, the event of issuing show cause notice itselfwould arise from the transferring Commissioner. In other words,the very conduct of the transferring Commissioner in issuing theshow cause notice itself is enough for drawing a legal inferencethat both Commissioners are in agreement to transfer the case. 23. Further, Section 127(2)(a) of the Act does not stipulateanywhere or indicate in any manner as to how or in whatmanner/format such agreement has to be arrived at or recorded.On the other hand, this Court is of the considered view that thelanguage of the above provision of law has been carefully coinedto infer the presence of such agreement by conduct, once theshow cause notice is issued by the transferring Commissioner tothe assessee. 24.It is to be noted at this juncture that power to transfercases within the jurisdiction of the same Commissioner from oneAssessing Officer to another Assessing Officer, if both aresubordinate to him, is dealt with under Sub Section (1) ofSection 127. In the case, where both the Assessing Officers arenot subordinated to the same Commissioner, procedure to transferis dealt with under sub Section (2) of Section 127, whichcontains two eventualities. While sub clause (a) of 127(2)deals with transfer of cases, when there is an agreement betweenthe two Commissioners, sub clause (b) of Section 127(2) dealswith transfer of cases by the Board or any such Officer as theBoard may, by notification, authorise in this behalf, where thetwo Commissioners are not in agreement to transfer the case.While carefully perusing the provision under Section 127(2)(a),it is evident that the word "agreement" referred to therein isto be construed as an agreement by conduct and not necessarilyan agreement in writing. The above emphasis is made based onthe word "then" referred to under Section 127(2)(a) after theword "agreement". Therefore, it is apparent that only whenthere is an agreement between the two Commissioners, then thetransferring Commissioner has to issue show cause notice andpass orders thereon. If no agreement is reached between the two Commissioners, there is no occasion for the transferringCommissioner to issue show cause notice at all. Therefore, theword "then" assumes significance, only to indicate that theissuance of the show cause notice itself is enough to drawinference of such statutory compliance viz., existence of anagreement between the two Commissioners. Only when there is nodisagreement between the two Commissioners, such disagreementmust be reflected in writing, so as to invoke the power of theBoard to transfer as contemplated under Section 127(2)(b). 25. Keeping the above statutory position in mind, if thefacts and circumstances of the present case are looked into, itwould show that the Chennai Commissioner has passed the impugnedorder of transfer, after issuing show cause notice to theassessee and after giving them an opportunity of being heard aswell. Therefore, I find that the statutory requirement underSection 127(2)(a) is fully complied with in this case. In otherwords, the very conduct of the respective Commissioners wouldshow that there is an agreement between them for transfer andtherefore, it cannot be contended otherwise, merely because itis not so stated in the impugned order. Very issuance of theshow cause notice followed by passing an order of transferwould, on the face of those proceedings, reflect the agreementof the Chennai Commissioner for transferring the case to theBangalore Commissioner. 26. At this juncture, it is relevant to quote the DivisionBench decision of the Gujarat High Court reported in (2017) 86Taxmann.com 37 (Guj), Genus Electrotech Ltd. vs. Union of India,wherein at paragraph No.18, it has been observed as follows:"18. Thus clearly the Principal Commissioner ofIncome-tax, Lucknow, had shown his agreement to thecase of the petitioner being transferred andcentralised before ACIT, Central Circle, Moradabadalong with other group cases. It is true that no suchformal letter has been written by the PrincipalCommissioner of Ahmedabad indicating his agreement.However, the record would suggest that previously hehad passed the order dated 30.12.2015 transferring theassessment of the petitioner. Before passing thisorder, he issued a notice asking the petitioner toremain present. As noted, this order was struck down byjudgment dated 18.7.2016. Thereafter, the saidauthority issued fresh notices dated 3.11.2016 and23.11.2016 calling upon the petitioner to participatein the hearing and indicating the grounds on which heproposed to transfer the assessment. After consideringthe opposition of the petitioner, the said authoritypassed the order which is impugned in the presentpetition. The agreement of the Principal Commissioner, Ahmedabad, to transfer the case, therefore, can beculled out from the record. Clause(a) of sub-section(2)of section 127 of the Act refers to the agreement ofthe two heads of the jurisdiction from where asassessment is transferred to where it is beingtransferred. There is no format in which such agreementmust be recorded or conveyed. As noted, the additionalduty of the authority from whose jurisdiction theassessment is being transferred is to give a reasonableopportunity of being heard to the assessee and then topass an order citing reasons. This would necessarily beafter he agrees to allowing the assessment to betransferred. When therefore, Principal Commissioner ofAhmedabad had issued notices to the petitioner on moreoccasions than one proposing to transfer theassessment, his agreement for such transfer was writlarge on the face of the record. Had this been a casewhere the authority to whom the assessment was beingtransferred and whose agreement is not found on record,the issue would have to be seen in a different light.We cannot put the requirement of clause(a) to sub-section(2) to section 127 of the Act in such astraight-jacket formula that even when the competentauthority grants a hearing to the assessee and,thereafter, passes a reasoned order transferring theassessment, his action would fail merely because inwriting he did not record his