Sca/7643/2021 Of Kamlesh Rajnikant Shah v. Principal Commissioner Of Income Tax 3, Ahmedabad

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 7643 of 2021 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE J.B.PARDIWALA andHONOURABLE MS. JUSTICE NISHA M. THAKORE ==========================================================1Whether Reporters of Local Papers may be allowedYESto see the judgment ?2To be referred to the Reporter or not ?YES3Whether their Lordships wish to see the fair copyNOof the judgment ?4Whether this case involves a substantial questionNOof law as to the interpretation of the Constitutionof India or any order made thereunder ?==========================================================KAMLESH RAJNIKANT SHAH VersusPRINCIPAL COMMISSIONER OF INCOME TAX 3, AHMEDABAD ==========================================================Appearance:MS PREMLATA BANSAL WITH MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1MR MR BHATT FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1,2,4NOTICE SERVED for the Respondent(s) No. 3========================================================== CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 29/03/2022 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.By this writ application under Article 226 of theConstitution of India, the writ applicant has prayed for the following reliefs: “a. A writ of Certiorari or any other writ, order ordirection in the nature of Certiorari quashingthe impugned order dated 30.09.2020 issuedunder Section 127 of the Act to transfer thejurisdiction to DCIT, Central Circle-8(1), Mumbaifrom Income Tax Officer Ward-4(2)(2),Ahmedabad;direction in the nature of Certiorari quashingthe impugned order dated 30.09.2020 issuedunder Section 127 of the Act to transfer thejurisdiction to DCIT, Central Circle-8(1), Mumbaifrom Income Tax Officer Ward-4(2)(2),Ahmedabad; b. Pending further hearing and final disposal of thispetition, to stay the order u/s. 127 dated30.09.2020 passed by the respondent No.1 andconsequent proceedings u/s. 153C for A.Y.2013-14 to A.Y. 2018-19 initiated by respondent No.4.petition, to stay the order u/s. 127 dated30.09.2020 passed by the respondent No.1 andconsequent proceedings u/s. 153C for A.Y.2013-14 to A.Y. 2018-19 initiated by respondent No.4. c. Pending further hearing and final disposal of thispetition, to stay consequent proceedings u/s.153A for A.Y. 2014-15 to A.Y. 2019-20 initiatedby respondent no.4.petition, to stay consequent proceedings u/s.153A for A.Y. 2014-15 to A.Y. 2019-20 initiatedby respondent no.4. d. Pass any other order(s) as this Hon’ble Courtmay deem fit and more appropriate in order togrant interim relief to the Petitioner;may deem fit and more appropriate in order togrant interim relief to the Petitioner; e. Any other and further relief deemed just andproper be granted in the interest of justice;proper be granted in the interest of justice; f.To provide for the cost of this petition.” 2.The facts giving rise to this writ application may besummarized as under: 2.1The writ applicant claims to be in the business oftrading in vegetables, flowers, fruits, agriculture productsetc. It appears that the Deputy Commissioner of IncomeTax, Ahmedabad, vide notice dated 04.11.2019 informedthe writ applicant that consequent to the search and seizure action undertaken in the case of one Shri GauravKrishna Kant Laddha and others on 17.04.2018 underSection 132(1) of the Income Tax Act, 1961 (for short “theAct, 1961”) by the DCIT (Inv.) Mumbai, it was proposed tocentralize the case of the writ applicant with the DeputyCommissioner of Income Tax, Central Circle-8(1), Mumbaifor the purpose of effective and coordinated investigationand assessment. The writ applicant was called upon tolodge his objections, if any, to such decision to transferthe case under Section 127 of the Act, 1961. seizure action undertaken in the case of one Shri GauravKrishna Kant Laddha and others on 17.04.2018 underSection 132(1) of the Income Tax Act, 1961 (for short “theAct, 1961”) by the DCIT (Inv.) Mumbai, it was proposed tocentralize the case of the writ applicant with the DeputyCommissioner of Income Tax, Central Circle-8(1), Mumbaifor the purpose of effective and coordinated investigationand assessment. The writ applicant was called upon tolodge his objections, if any, to such decision to transferthe case under Section 127 of the Act, 1961. 2.2The writ applicant gave a reply of one line on14.11.2019 to the aforesaid notice stating that he hasobjection for the centralization of his case from the ITO,Ward 4(2)(2), Ahmedabad, to the DCIT CC-8(1), Mumbai. 2.3On 22.09.2020, the office of the PrincipalCommissioner of Income Tax-3, Ahmedabad, gave oneanother notice for transfer of the case, which reads thus: “No.AHD/PCIT3/HQ/CETR’N/KS/GKL Group./2020-21 Date22.09.2020 To,Kamlesh Shah,C-11, Sarvodaynagar,Nr. Sola Railway Crossing,Sola Road,Ghatlodia,Ahmedabad. Sir, Sub : Transfer of your case from erstwhile ITO, Ward-4(2)(2), Ahmedabad to DCIT, Central Circle-8(1), Mumbai – in the case of Shri Gaurav Krishnakant Laddha & Others to centralize the case of Kamlesh Shah, PAN: regarding---------------------------------------------------------- Kindly refer to the above captioned subject. 2. A search and seizure action u/s. 132(1) of the Income TaxAct, 1961 was conducted in the Shri Gaurav Krishnakant Laddha &Others on 17.04.2018 by DGIT(Inv.) Karnataka & Goa & furtherother search & seizure in your case along with others was carriedout on 07.08.2019 by DGIT(Inv), WB, Sikkim & NER, Kolkatarespectively. In the concurrence between the above two DGITs, it isproposed to centralize your case with the DCIT, Central Circle-8(1),Mumbai under the charge of PCIT(C)-4, Mumbai for the purpose ofeffective and coordinated investigation and assessments. This officeis asked to pass an order under Section 127 of the Act transferringyour case from the erstwhile ITO, Ward-4(2)(2) Ahmedabad to theDCIT, Central Circle-8(1), Mumbai. 3.Due to change in incumbent, I am directed to give you onemore opportunity of being heard before your case is transferred andin this connection, you are required to submit your objections, if anywith specific reasons, against the proposed transfer of your case toDCIT, Central Circle-8(1), Mumbai under the charge of Pr.CIT(Central)-4, Mumbai on or before 30.09.2020. In case nothing isheard from your side by the stipulated date, it will be presumed thatyour have nothing to submit in this matter. Yours faithfully,(Prem Meena) For Principal Commissioner of Income-tax-3,A’bad.” 2.4On the very next day i.e. 23.09.2020, one anothernotice came to be issued by the office of the PrincipalCommissioner of Income Tax, Ahmedabad, which readsthus: “No.AHD/PCIT3/HQ/Cetr’n/KS/GKL Group./2020-21 Date23.09.2020 To,Kamlesh ShahC-11, Sarvodaynagar,Nr Sola Railway Crossing, Sola Road,Ghatlodia, Ahmedabad Sir, Sub: Transfer of your case from erstwhile ITO,Ward-4(2)(2),Ahmedabad To DCIT, Central Circle-8(1), Mumbai- in thecase of Shri Gaurav Krishnakant Laddha & Others tocentralize the case of Kamlesh Shah, PAN: regarding----------------------------------------------------------------- Kindly refer to the above captioned subject. Yours faithfully,(Prem Meena) For Principal Commissioner of Income-tax-3,A’bad.” 2.4On the very next day i.e. 23.09.2020, one anothernotice came to be issued by the office of the PrincipalCommissioner of Income Tax, Ahmedabad, which readsthus: “No.AHD/PCIT3/HQ/Cetr’n/KS/GKL Group./2020-21 Date23.09.2020 To,Kamlesh ShahC-11, Sarvodaynagar,Nr Sola Railway Crossing, Sola Road,Ghatlodia, Ahmedabad Sir, Sub: Transfer of your case from erstwhile ITO,Ward-4(2)(2),Ahmedabad To DCIT, Central Circle-8(1), Mumbai- in thecase of Shri Gaurav Krishnakant Laddha & Others tocentralize the case of Kamlesh Shah, PAN: regarding----------------------------------------------------------------- Kindly refer to the above captioned subject. 2. A search and seizure action u/s. 132(1) of the Income Tax Act,1951 was conducted in the Shri Gaurav Krishnakant Laddha &Others on 17.04.2018 by DGIT(Inv.), Karnataka & Goa & furtherother search & seizure in your case along with others was carriedout on 07.08.2019 by DGIT(Inv), WB, Sikkim & NER, Kolkatarespectively. In concurrence between the above two DGITS, it isproposed to centralize your case with the DCIT, Central Circle-8(1),Mumbai under the charge of PCIT(C)-4,Mumbai, for the purpose ofeffective and co-ordinated investigation and assessments. Thisoffice is asked to pass an order under section 127 of the Acttransferring your case from the erstwhile ITO, Ward-4(2)(2),Ahmedabad to the DCIT, Central Circle-8(1), Mumbai, 3. Due to change in incumbent, I am directed to give you one moreopportunity of being heard before your case is transferred, and inthis connection, you are required to submit your objections, if anywith specific reasons, against the proposed transfer of your case toDCIT, Central Circle-8(1), Mumbal under the charge of Pr.CIT(Central)-4, Mumbai on or before 25.09.2020.This is insuppression of the earlier letter dated 22.09.2020 on thesame subject. In case nothing is heard from your side by thestipulated date, it will be presumed that you have nothing to submitin this matter. Yours faithfully,(Prem Meena)ITO(HQ)-3, A’bad.for Principal Commissioner of Income-tax-3, Abad” 2.5The only difference between the aforesaid twonotices is that in the notice dated 22.09.2020, time wasgiven upto 30.09.2020 to lodge the objections whereas inthe notice dated 23.09.2020, the time period was curtailedand reduced upto 25.09.2020. 2.6The writ applicant filed his reply dated 28.09.2020stating that he is engaged in the business of agricultureproduces and many times in the past, his cash in hugeamount came to be seized by the Department, fromvarious places in different States. In short, what is soughtto be conveyed by the writ applicant is that as he isengaged in a huge business of agricultural products, he has to deal in cash in huge amount. 2.7It is further the case of the writ applicant that he hasnothing to do with the searched persons and therefore, inthe name of effective and coordinated investigation andassessment, his case could not have been transferredfrom Ahmedabad to Mumbai in exercise of powers underSection 127 of the Act. 2.8Ultimately, the final order came to be passed by thePrincipal Commissioner of Income Tax – 3, Ahmedabad,dated 30.09.2020. The same reads thus: “No.PCIT-3/HQ/Centralization/GKLaddha/2020-21 Date: 30.09.2020 ORDER UNDER SECTION 127(2) OF THE INCOME TAX ACT,1961 has to deal in cash in huge amount. 2.7It is further the case of the writ applicant that he hasnothing to do with the searched persons and therefore, inthe name of effective and coordinated investigation andassessment, his case could not have been transferredfrom Ahmedabad to Mumbai in exercise of powers underSection 127 of the Act. 2.8Ultimately, the final order came to be passed by thePrincipal Commissioner of Income Tax – 3, Ahmedabad,dated 30.09.2020. The same reads thus: “No.PCIT-3/HQ/Centralization/GKLaddha/2020-21 Date: 30.09.2020 ORDER UNDER SECTION 127(2) OF THE INCOME TAX ACT,1961 In exercise of the powers conferred by sub-section (2)(a) ofsection 127 of the I.T. Act, 1961 and all other powers enabling mein this behalf, I the Principal Commissioner of Income Tax-3,Ahmedabad hereby transfer the following case, the particulars ofwhich are mentioned in column nos. 2 & 3 of the schedule hereunder, from the Assessing Officer mentioned in column no. 4 to theAssessing Officer mentioned in column no. 5 working under thecharge of Pr. Commissioner of Income Tax mentioned in column no.6 thereof, due to centralization of case of Shri Gaurav KrishnakantLaddha & Shri Kamleshkumar J Prajapati Proprietor Of M/sKamleshkumar Mahendrakumar & Co., keeping in the view theletters of DGIT (Inv), Karnataka & Goa bearing no. DGIT (Inv.)/Ble/Tech/14/Cent/2018-19/14 dated 08.10.2018 & letter No.F.No.14/Centralization/DG/T(Inv.)/2019-20 dtd 23.07.2020 and Pr.CIT(C)-4 Mumbai's letter No. PCIT (C)-A/Centralis/G K Laddha/2019-20 19.03.2020 & letter No. PCIT(C)-4/Centralis/G K Laddha/2019-20dated 27.08.2019. This transfer is made for the purpose of effectiveand coordinated investigation and assessments. :SCHEDULE: C/SCA/7643/2021 JUDGMENT DATED: 29/03/2022 This order shall take effect from 30.09.2020. sd/-Jagdeep Goel Pr. Commissioner of Income-tax-3,Ahmedabad” 2.10 In such circumstances referred to above, the writapplicant is here before this Court with the present writapplication. SUBMISSIONS: 3.We have heard Ms. Premlata Bansal, the learnedsenior counsel assisted by Mr. Hardik Vora, the learnedcounsel appearing for the writ applicant and Mr. M.R.Bhatt, the learned senior counsel appearing for theRevenue. 4.Many fold contentions have been raised on behalf ofthe writ applicant, however, the principal contentionraised on behalf of the writ applicant is that in the absenceof any cogent material to connect the writ applicant withthe search undertaken at Mumbai in the case of Mr.Gaurav Laddha and one Mr. Kamleshkumar J. Prajapati,respectively the Principal Commissioner could not haveexercised his powers under Section 127 of the Act totransfer the case of the writ applicant from Ahmedabad toMumbai. 5.On the other hand, Mr. M.R. Bhatt, the learned seniorcounsel appearing for the Revenue, while opposing thepresent writ application, submitted that there is cogentmaterial on record to prima facie indicate the nexusbetween the incriminating materials recovered during thecourse of the search carried out in the case of Mr. GauravLaddha and Mr. Kamleshkumar J. Prajapati at Mumbai withthe present writ applicant. According to Mr. M.R. Bhatt, thematerials on record would indicate that the writ applicantis an Angadia and is habitually involved in claimingownership of the cash seized at various places across thecountry to be that of his own by filing false affidavits. Mr.Bhatt would submit that the aforesaid is evident from theorder passed by the Principal Commissioner dated30.09.2020 disposing of the objections raised by theassessee with regard to the proposed PAN Migration due to centralization. 6.Mr. Bhatt also invited the attention of this Court tothe following averments made in the affidavit-in-reply filedon behalf of the Revenue. Para 5 to 9 read thus: to centralization. 6.Mr. Bhatt also invited the attention of this Court tothe following averments made in the affidavit-in-reply filedon behalf of the Revenue. Para 5 to 9 read thus: “5.Without prejudice to the above, following factsmay kindly be considered which would justify theorder under Section 127 of the Act dated30.09.2020. A proposal was received from the PCIT Central 4,Mumbai under letter dated 27.09.2019forcentralization of the case of assessee on account ofsearch conducted on 17.4.2018 in cases of Shri G.K.Laddha and Brothers. A.Thereafter, as required under the provisions oflaw, the assessee was given an opportunityunder show-cause dated 4.11.2019.law, the assessee was given an opportunityunder show-cause dated 4.11.2019. B.In response to the show cause notice theassessee file letter dated 14.11.2019 whichreads as under:assessee file letter dated 14.11.2019 whichreads as under: “In this connection I have objection forcentralization of my case from ITO ward4(2)(2) Ahmedabad to DCIT Central Circle(8)(1) Mumbai. Therefore, I am request toyour honour that my case is notcentralized from Ahmedabad to Mumbai.” As can be seen that no other ground /objectionwas raised by the assessee in his letter dated14.11.2019. C.A copy of the objection raised by the assesseewas forwarded to the Principal CIT, CentralCircle 4 Mumbai under letter dated 5.11.2019.was forwarded to the Principal CIT, CentralCircle 4 Mumbai under letter dated 5.11.2019. D.Meanwhile another proposal was received fromPCIT Central 1, Kolkata for centralization of thecase of the assessee with the DCIT CentralCircle 2(3) Kolkata under letter dated23.12.2019. This proposal was in consequenceto the search and seizer action.PCIT Central 1, Kolkata for centralization of thecase of the assessee with the DCIT CentralCircle 2(3) Kolkata under letter dated23.12.2019. This proposal was in consequenceto the search and seizer action. E.As proposal was already received forcentralization of the case of the assessee atMumbai therefore, the clarificatory letter waswritten to the DCIT (Inv) Kolkata and also toCCIT Central (1), Mumbai in relation to the placeat where the case was required to becentralized.centralization of the case of the assessee atMumbai therefore, the clarificatory letter waswritten to the DCIT (Inv) Kolkata and also toCCIT Central (1), Mumbai in relation to the placeat where the case was required to becentralized. F.The PCIT Central (4) Mumbai under his letterdated 19.3.2020 conveyed that the case isrequired to be centralized at Mumbai. However,as the letter dated 19.3.2020 was not clarifyingas to whether the consent of DCIT (Inv) WestBengal/ Kolkata was taken or not, a letter dated30.06.2020 was written to the PCIT, Central (4),dated 19.3.2020 conveyed that the case isrequired to be centralized at Mumbai. However,as the letter dated 19.3.2020 was not clarifyingas to whether the consent of DCIT (Inv) WestBengal/ Kolkata was taken or not, a letter dated30.06.2020 was written to the PCIT, Central (4), Mumbai with a request to furnish copy ofconsent letter /NOC given by the DCIT (Inv),West Bengal/Kolkata. F.The PCIT Central (4) Mumbai under his letterdated 19.3.2020 conveyed that the case isrequired to be centralized at Mumbai. However,as the letter dated 19.3.2020 was not clarifyingas to whether the consent of DCIT (Inv) WestBengal/ Kolkata was taken or not, a letter dated30.06.2020 was written to the PCIT, Central (4),dated 19.3.2020 conveyed that the case isrequired to be centralized at Mumbai. However,as the letter dated 19.3.2020 was not clarifyingas to whether the consent of DCIT (Inv) WestBengal/ Kolkata was taken or not, a letter dated30.06.2020 was written to the PCIT, Central (4), Mumbai with a request to furnish copy ofconsent letter /NOC given by the DCIT (Inv),West Bengal/Kolkata. G.The ADIT (Inv) HQ Technical 1, Kolkata underhis Email dated 12.08.2020 conveyed that DCIT(Inv) West Bengal/ Kolkata had concurred forcentralization of cases at Mumbai. A reply fromDCIT (Inv) Karnataka and Goa was also receivedunder letter dated 24.08.2020, conveying NOCfrom DGIT (Inv.) Karnataka. A letter dated24.08.2020 intimating that objection raised bythe assessee were considered by DCIT (Inv)Panji and it was requested that the case may becentralized with Central Circle, Mumbai. his Email dated 12.08.2020 conveyed that DCIT(Inv) West Bengal/ Kolkata had concurred forcentralization of cases at Mumbai. A reply fromDCIT (Inv) Karnataka and Goa was also receivedunder letter dated 24.08.2020, conveying NOCfrom DGIT (Inv.) Karnataka. A letter dated24.08.2020 intimating that objection raised bythe assessee were considered by DCIT (Inv)Panji and it was requested that the case may becentralized with Central Circle, Mumbai. 6.Thus the procedure contemplated under theprovisions of the Act has been fully complied withand assessee was given due opportunity to raiseobjections which were disposed of under order dated30.09.2020. 7.It is submitted that subsequent to 27.08.2019(letter at Annexure R.1) on account of restructuringof the department no further action was taken till theissue of notice dated 23.09.2020. Thus, a show-cause notice dated 23.09.2020 was issued to theassessee requesting to file his objections by25.09.2020. Finally an order dated 30.09.2020 waspassed centralizing the case of the assessee withPCIT Central (4), Mumbai. Thus, a detailed orderdated 30.09.2020 was passed considering theobjection as to why the case of the assessee isrequired to be centralized. Thus, the contention ofthe assessee that no reasons were provided isfactually incorrect. 8.It is submitted that the contention of thepetitioner that the order dated 30.09.2020 was notcommunicated is factually incorrect as the same hadreceived and part of the present petition. 9.It is submitted that as per the settled legal position transfer of case u/s 127 of the Act for thepurpose of effective and coordinated investigationand assessment is the sufficient and proper reason.Therefore the contention of the assesse that theorder u/s 127 is without any reason is not correct.” 7.In such circumstances referred to above, Mr. Bhattprays that there being no merits in this application, thesame may be rejected. ANALYSIS: 8.Having heard the learned counsels appearing for theparties and having gone through the materials on record,the only question that falls for our consideration iswhether the writ applicant is entitled to claim any relief inthe present writ application. 9.Section 124 of the Act relates to the jurisdiction of theAssessing Officer. Sub-section (1) of Section 124 reads asunder : “124(1)Where by virtue of any direction or orderissued under sub-section (1) or sub-section (2) of section120, the Assessing Officer has been vested withjurisdiction over any area, within the limits of such area,he shall have jurisdiction-- 7.In such circumstances referred to above, Mr. Bhattprays that there being no merits in this application, thesame may be rejected. ANALYSIS: 8.Having heard the learned counsels appearing for theparties and having gone through the materials on record,the only question that falls for our consideration iswhether the writ applicant is entitled to claim any relief inthe present writ application. 9.Section 124 of the Act relates to the jurisdiction of theAssessing Officer. Sub-section (1) of Section 124 reads asunder : “124(1)Where by virtue of any direction or orderissued under sub-section (1) or sub-section (2) of section120, the Assessing Officer has been vested withjurisdiction over any area, within the limits of such area,he shall have jurisdiction-- (a)in respect of any person carrying on a business orprofession, if the place at which he carries on hisbusiness or profession is situate within the area, or wherehis business or profession is carried on in more placesthan one, if the principal place of his business orprofession is situate within the area, and (b)in respect of any other person residing within thearea.” 10.Section 127 of the 1961Act corresponds to section 5(7A) of the Income-tax Act, 1922 (briefly “the old Act”) .Section 5(7A) may be set out: "The Commissioner of Income-tax may transfer anycase from one Income-tax Officer subordinate to himto another, and the Central Board of Revenue maytransfer any case from any one Income-tax Officer toanother. Such transfer may be made at any stage ofthe proceedings, and shall not render necessary there- issue of any notice already issued by the Income-tax Officer from whom the case is transferred". 11.The successor section under the Income-tax Act,1961 is section 127 and the same may be set out: "Transfer of cases from one Income-tax Officer toanother:- (1) The Commissioner may, after giving theassessee a reasonable opportunity of being heardin the matter, wherever it is possible to do so, andafter recording his reasons for doing so, transferany case from one Income- tax Officer subordinateto him to another also subordinate to him, and theBoard may similarly transfer any case from oneIncome- tax Officer to another. Provided that nothing in this sub-section shall bedeemed to require any such opportunity to begiven where the transfer is from one Income- taxOfficer to another whose offices are situated in thesame city, locality or place. (2) The transfer of acase under sub-section (1) may be made at anystage of the proceedings, and shall not rendernecessary the re-issue of any notice already issueby the Income-tax Officer from whom the case istransferred. Explanation:-In this section and in sections 121and125, the word 'case' in relation to any personwhose name is specified in any order or directionissued thereunder, means all proceedings underthis Act in respect of any year which may be pending on the date of such order or direction orwhich may have been completed on or before suchdate, and includes also all proceedings under thisAct which may be commenced after the date ofsuch order or direction in respect of any year". 12.The section was amended by section 27 of Finance(No. 2) Act, 1967, and Section 127 since then stands asunder: (1) "The Commissioner may, after giving theassessee a reasonable opportunity of being heard inthe matter, where ever it is possible to do so, andafter recording his reasons for doing so, transfer anycase from any Income-tax Officer or officers alsosubordinate to him and the Board may similarlytransfer any case from any Income-tax Officer orIncome-tax Officers to any other Income-tax Officeror Income-tax Officers. pending on the date of such order or direction orwhich may have been completed on or before suchdate, and includes also all proceedings under thisAct which may be commenced after the date ofsuch order or direction in respect of any year". 12.The section was amended by section 27 of Finance(No. 2) Act, 1967, and Section 127 since then stands asunder: (1) "The Commissioner may, after giving theassessee a reasonable opportunity of being heard inthe matter, where ever it is possible to do so, andafter recording his reasons for doing so, transfer anycase from any Income-tax Officer or officers alsosubordinate to him and the Board may similarlytransfer any case from any Income-tax Officer orIncome-tax Officers to any other Income-tax Officeror Income-tax Officers. Provided that nothing in this subsection shall bedeemed to require any such opportunity to be givenwhere the transfer is from any Income-tax Officer orIncome-tax Officers to any other Income-tax Officeror Income-tax Officers and the offices of all suchIncome- tax Officers are situated in the same city,locality or place: Provided further that where any case has beentransferred from any Income-tax officer or Income-tax Officers to two or more Income-tax Officers, theIncome-taxers to whom the case is so transferredshall have concurrent jurisdiction over the case andshall perform such functions in relation to the saidcase as the Board or the Commissioner (or anyInspecting Assistant Commissioner authorised by theCommissioner in this behalf) may, by general orspecial order in writing, specify for the distributionand allocation of the work to be performed". (2) The transfer of a case under subsection (1) maybe made at any stage of the proceedings, and shall not render necessary the reissue of any noticealready issued by the Income-tax Officer or Income-tax Officers from whom the case is transferred. Explanation:-In this section and in sections 121, 123,124 and 125, the word 'case' in relation to anyperson whose name is specified in any order ordirection issued thereunder means all proceedingsunder this Act in respect of any year which may bepending on the date of such order or direction orwhich may have been completed on or before suchdate, and includes also all proceedings under this Actwhich may be commenced, after the date of suchorder or direction in respect of any year." 13.Subsequently, Section 127 has newly been substituted bythe Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), forthe then existing Section 127, with effect from 01.04.1988.Thereafter, by Finance (No.2) Act, 2014, (25 of 2014), bySection 4, Section 127 has been amended (w.e.f. 01.06.2013)consequent upon re-designation of and introduction of, IncomeTax Authorities. The same reads as under: “127. (1) The Principal Director General or DirectorGeneral or Principal Chief Commissioner or ChiefCommissioner or Principal Commissioner orCommissioner 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 oneor more Assessing Officers subordinate to him(whether with or without concurrent jurisdiction) toany other Assessing Officer or Assessing Officers(whether with or without concurrent jurisdiction) alsosubordinate to him. (2)Where the Assessing Officer or AssessingOfficers from whom the case is to be transferred andthe Assessing Officer or Assessing Officers to whomthe case is to be transferred are not subordinate to the same Principal Director General or DirectorGeneral or Principal Chief Commissioner or ChiefCommissioner or Principal Commissioner orCommissioner,— (2)Where the Assessing Officer or AssessingOfficers from whom the case is to be transferred andthe Assessing Officer or Assessing Officers to whomthe case is to be transferred are not subordinate to the same Principal Director General or DirectorGeneral or Principal Chief Commissioner or ChiefCommissioner or Principal Commissioner orCommissioner,— (a)where the Principal Directors General orDirectors General or Principal Chief Commissioners orChief Commissioners or Principal Commissioners orCommissioners to whom such Assessing Officers aresubordinate are in agreement, then the PrincipalDirector General or Director General or PrincipalChief Commissioner or Chief Commissioner orPrincipal Commissioner or Commissioner from whosejurisdiction the case is to be transferred may, aftergiving the assessee a reasonable opportunity ofbeing heard in the matter, wherever it is possible todo so, and after recording his reasons for doing so,pass the order; (b)where the Principal Directors General orDirectors General or Principal Chief Commissioners orChief Commissioners or Principal Commissioners orCommissioners aforesaid are not in agreement, theorder transferring the case may, similarly, be passedby the Board or any such Principal Director Generalor Director General or Principal Chief Commissioneror Chief Commissioner or Principal Commissioner orCommissioner as the Board may, by notification inthe Official Gazette, authorise in this behalf. (3)Nothing in sub-section (1) or sub-section (2)shall be deemed to require any such opportunity tobe given where the transfer is from any AssessingOfficer or Assessing Officers (whether with or withoutconcurrent jurisdiction) to any other AssessingOfficer or 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) orsub- section (2) may be made at any stage of theproceedings, and shall not render necessary thereissue of any notice already issued by the AssessingOfficer or Assessing Officers from whom the case is transferred. Explanation.—In section 120 and this section, theword "case", in relation to any person whose name isspecified in any order or direction issued thereunder,means all proceedings under this Act in respect ofany year which may be pending on the date of suchorder or direction or which may have beencompleted on or before such date, and includes alsoall proceedings under this Act which may becommenced after the date of such order or directionin respect of any year.” 14.Upon bare comparison of the aforesaid two provisions ofthe Act, one cannot loose sight of the difference between theaforesaid Sections. Section 124 is a provision defining “Jurisdiction ofIncome-Tax Officer”, wherein Sub-section (1) provides forspecifications, by the Commissioner, of areas or persons, orclasses of person or income or classes of income or cases orclasses of cases over which an Income Tax Officer or a groupof Income Tax Officers shall have jurisdiction. Whereas Section 127 can be attracted only when it is feltby the Commissioner of the CBDT or the authority competentthat it is proper or appropriate to exercise power under theprovisions in the interest of the Revenue and for properadjudication of the tax liability or collection thereof. Moreover, the conferment and / or requirement ofjurisdiction under Section 124(1) is made, inter alia withreference to certain cases or class of cases whereas Section127(1) is necessarily made in connection with a ‘case’ and for particular “assessee”. Whereas Section 127 can be attracted only when it is feltby the Commissioner of the CBDT or the authority competentthat it is proper or appropriate to exercise power under theprovisions in the interest of the Revenue and for properadjudication of the tax liability or collection thereof. Moreover, the conferment and / or requirement ofjurisdiction under Section 124(1) is made, inter alia withreference to certain cases or class of cases whereas Section127(1) is necessarily made in connection with a ‘case’ and for particular “assessee”. 15.Thus, Section 124(1) of the Act lays down thejurisdiction of the Assessing Officer, whereas under sub-section (1) of Section 127 of the Act, it is open to theconcerned authority to transfer any case of an assesseefrom one Assessing Officer subordinate to him to anyother Assessing Officer or Officers also subordinate tohim. Section 124 (1) prescribes the jurisdiction of theassessing Officer in respect of an assessee on givenprinciples and grounds mentioned therein, whereassection 127 is an exception to the aforesaid provision ofsection 124. Section 124 is a provision defining thejurisdiction in normal circumstances, whereas section 127can be attracted only in circumstances where theCommissioner or the Central Board of Direct Taxes or theauthority competent finds that it is proper to orappropriate to exercise power under the said provision inthe interest of revenue and for proper adjudication of thetax liability or collection thereof. Thus, as a sequel of theaforesaid principle, it follows that the transfer of cases canbe ordered for facilitating the task of effectiveinvestigation and for best and coordinated assessment. 16.Now, this power of the authority is hedged underSection 127(1) by two requirements which are that suchorder can be passed only after giving the assessee areasonable opportunity of being heard and recording hisreasons for doing so, wherever possible. Under clause (a) of sub-section (2) of Section 127,where the Assessing Officer or the officers from whom thecase is to be transferred and the Assessing Officer or theofficers to whom the case is to be transferred are notsubordinate to the same Principal Directors General,Director General, Principal Chief Commissioners,Chief Commissioners or Principal Commissioners orCommissioners, the transfer of case would be onlywhen such authorities to whom the Assessing Officersconcerned are subordinate are in agreement. In such acase, the Principal Director General, Director General,Principal Chief Commissioner or Chief Commissioner orCommissioner from whose jurisdiction the case is to betransferred would pass an order after giving the assesseea reasonable opportunity of being heard and afterrecording the reasons wherever it is possible. As per subsection (3) of Section 127 however, theopportunity of hearing would not be necessary where thetransfer of a case is from one Assessing Officer to anotherAssessing Officer and such officers are situated in thesame city, locality or place. 17.Also, Section 127 of the Act is founded on threeprinciples. First, is the requirement of transferring the assessment inappropriate cases which would have the element of public interest. As per subsection (3) of Section 127 however, theopportunity of hearing would not be necessary where thetransfer of a case is from one Assessing Officer to anotherAssessing Officer and such officers are situated in thesame city, locality or place. 17.Also, Section 127 of the Act is founded on threeprinciples. First, is the requirement of transferring the assessment inappropriate cases which would have the element of public interest. Secondly, the assessee cannot choose his AssessingOfficer. It is evident that Section 124 of the Act which laysdown the jurisdiction of the Assessing Officers ensures properadministrationofassessmentsgivingconsistency,transparency and predictability on the question of whichAssessing Officer would deal with which assessments.Nevertheless, an assessee cannot choose his Assessing Officer.At the same time, it is also recognised that transferring theassessment of an assessee at a far away place would lead tohardship and cause prejudice. It is in this context that thesection 127 requires giving of a reasonable opportunity ofbeing heard to the assessee and to record reasons fortransferring the assessment. The Courts have also recognisedthat transferring an assessment of an assessee at a far awaydistance would certainly cause inconvenience and prejudice. Itis in this respect that under sub-section (3) of Section 127, therequirement of hearing and recording of reasons fortransferring an assessment is not made applicable when theassessment is being transferred from one Assessing Officer toanother Assessing Officer, both being situated in the same city,locality or place. The third important element of Section 127 is when anassessment is being transferred from one Assessing Officer toanother Assessing Officer, both of whom are not subordinate tothe same head, the same could be done only with theagreement of the respective heads and if there is no suchagreement, only by the Board or the authority that the Boardmay authorise in this behalf, by issuing notification in the official Gazette. This last requirement would ensure that thereis no discordance between the heads of the two AssessingOfficers from where the assessment is transferred to where itis being transferred and in case there is a disagreement, suchpowers can be exercised only by the Board or an officer soauthorised by the Board. While we are on the requirement ofagreement between the two authorities, as referred to inclause(a) of sub-section (2) of Section 127, we may also noticethat upon such agreement being achieved, it is the authorityfrom whose jurisdiction the case is to be transferred, has togrant a reasonable opportunity of being heard to the assesseeand then pass an order recording his reasons. Thisrequirement would have two significant elements. One is thatthe authority under whose jurisdiction the assessment is beingtransferred has merely to show his agreement ordisagreement, as the case may be. It is the authority fromwhose jurisdiction the case is being transferred, in addition toagreeing to transfer would have to grant an opportunity ofhearing to the assessee and pass a reasoned order. Thesecond element is that his agreement for transfer of the casecannot be equated with the decision to transfer. The decisioncan be reached only after hearing the assessee. He can form afinal opinion that the case is to be transferred only afterhearing the assessee, failing which, his decision would be ex-parte. Without the representation or involvement of theassessee, the requirement of hearing would then be renderedinto an empty formality. [See Genus Electrotech Ltd. vs. Unionof India and Others, (2018) 402 ITR 221 (Guj.)] 16.We have already noted the reasons for the transfer ofassessment. We may refer to a decision rendered by a 16.We have already noted the reasons for the transfer ofassessment. We may refer to a decision rendered by a Coordinate Bench of this Court in the case of Shree Ram VesselScrap P. Ltd. vs. Commissioner of Income-tax, reported in(2013) 355 ITR 255 (Guj), wherein this Court had upheld thestance of the Revenue that for effective and coordinatedinvestigation, if otherwise established on the record, the samecan be a good ground for transfer of a case. It was observed asunder : “20. Section 127 of the Act, as already noticed, pertainsto power to transfer cases. Sub-section (1) empowers theDirector General, Chief Commissioner or theCommissioner after giving the assessee a reasonableopportunity of being heard wherever it is possible to doso and after recording his reasons, transfer any casefrom one more or more Assessing Officers subordinate tohim to any other Assessing Officer or Assessing Officersalso subordinate to him. Likewise, under sub-section (2)of Section 127 after following similar proceduralrequirements, it is open for the Director General, ChiefCommissioner or Commissioner to transfer a case fromone Assessing Officer to another who is not subordinateto him in agreement with the authority to whom he maybe subordinate. Sub-section (3) of Section 127 providesthat nothing contained in sub-section (1) or sub- section(2) shall be deemed to require giving of any suchopportunity where the transfer is from any AssessingOfficer to another and offices of all such officers aresituated in the same city, locality or place. Sub-section(4) of Section 127 provides that the transfer of a caseunder sub-section (1) or sub-section (2) may be made atany stage of the proceedings and shall not rendernecessary the re-issuance of any notice already issued bythe Assessing Officer from whom the case is transferred. 21.Exercise of power under sub-section (1) and sub-section (2) of the Act comes with certain proceduralrequirements namely, of granting a reasonableopportunity of being heard in the matter wherever it ispossible to do so, of recording of reasons for passingsuch order and as provided by the Supreme Court inAjanta Industries (supra) communicating such reasonsalso to the assessee. Subject to fulfillment of suchprocedural requirements, the authority under Section127 enjoys considerable discretion while exercising the 21.Exercise of power under sub-section (1) and sub-section (2) of the Act comes with certain proceduralrequirements namely, of granting a reasonableopportunity of being heard in the matter wherever it ispossible to do so, of recording of reasons for passingsuch order and as provided by the Supreme Court inAjanta Industries (supra) communicating such reasonsalso to the assessee. Subject to fulfillment of suchprocedural requirements, the authority under Section127 enjoys considerable discretion while exercising the power contained in sub-section (1) or sub- section (2)thereof. Such discretion of course has to be exercised forachieving the public purpose and not for any arbitrary orirrelevant consideration. On the other hand, it can alsobe seen that transfer of a pending case from oneAssessing Officer to another outside of a city, locality orplace is likely to cause considerable inconvenience to anassessee. Therefore, even though an assessee may nothave a vested right to insist that his assessment becompleted only at one place or by a particular AssessingOfficer, nevertheless, the reasons for transfer must beweighty enough to offset against such personalinconvenience of an assessee. In exercise of power underSection 127 thus we are concerned with larger publicinterest on one hand and personal inconvenience on theother. However, as long as such powers are exercisedbona fide, for public purpose and in the interest ofRevenue, the role of the Court to dissect such reasonsand to come to a different conclusion would be extremelylimited. It is by now well settled that judicial reviewagainst the administrative order in exercise of writjurisdiction, the Court is concerned with the decisionmaking process and not the final decision itself. Unlessthe reasons which prompted the competent authority totransfer the case can be stated to be wholly irrelevant orarbitrary, the Court would not interfere with suchreasons. Of course an order of such nature can and needto be quashed if it is demonstrated that same is passedeither without jurisdiction or is actuated by malafideeither in fact or in law.” 18. We may also refer to and rely upon the judgment in the caseof General Exporters v. CIT[2000]241 ITR 845 (Mad.), whereinthe Madras High Court after a