Thiru.l.r.muralikrishnan v. The Principal Commissioner Of Income Tax, Chennai – 1.Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.06.2017 CORAM THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU W.P.No.847 of 2017 and W.M.P.Nos.871 & 872 of 2017 M/s. Aditya Birla Money LimitedAli Centre, 53, Greams Road,Chennai – 600 006. Represented by its Authorised Signatory Thiru.L.R.Muralikrishnan ... Petitioner Vs. 1.The Principal Commissioner of Income Tax, Chennai – 1.Room NO.701, 7[th] Floor, Wanaparthy Block,Room NO.701, 7[th] Floor, Wanaparthy Block, 121, Uthamar Gandhi Road, Nungambakkam, Chennai – 600 034. 2.The Director General of Income Tax (Investigation),Aayakar Bhavan,Aayakar Bhavan, 108, Nungambakkam High Road,Nungambakkam, Chennai – 600 034.Nungambakkam, Chennai – 600 034. 3.The Deputy Commissioner of Income Tax, Corporate Circle – 1(1),#121, Nungambakkam High Road,Nungambakkam, Chennai – 600 034.Corporate Circle – 1(1),#121, Nungambakkam High Road,Nungambakkam, Chennai – 600 034. 4.The Director General of Income Tax (Investigation),Room No.304, Scindia House,Room No.304, Scindia House, Ballard Estate, Mumbai – 400 038. 5.The Chief Commissioner of Income Tax, Central Circle – 2,Room No.108, Aayakar Bhavan,M.K.Road, Mumbai – 400 020.Room No.108, Aayakar Bhavan,M.K.Road, Mumbai – 400 020. 6.The Deputy Commissioner of Income Tax,Central Circle – 3 (4), Aayakar Bhavan,M.K.Road, Mumbai – 400 020.Central Circle – 3 (4), Aayakar Bhavan,M.K.Road, Mumbai – 400 020. ... Respondents Prayer: Writ petition filed under Article 226 of theConstitution of India praying for issuance of a Writ ofCertiorari,callingfortherecordsinC.No.272-B/4/Centralisation/PCIT-1/2015-16 dated 04.04.2016 on the fileof the first respondent and quash the same. The Petitioner is aggrieved against the order passed by the1[st] respondent dated 04.04.2016, transferring the case of thepetitioner from DCIT,Cor.Cir.1(1), Chennai to DCIT, CentralCircle – 3 (4), Mumbai, by exercising the power conferred underSection 127 of the Income Tax Act, 1961. 2. The petitioner is a stock broking entity registered withSEBI and an assessee before the respondent Department, moreparticularly, on the file of the Deputy Commissioner of IncomeTax, Corporate Circle – 1(1), Chennai, the 3[rd] respondent herein.The petitioner was issued with a notice dated 23.02.2016 callingupon them to file their reply under section 127(2) of the IncomeTax Act for the proposed centralisation of the group case ofRadford Group with Mumbai. By their communication dated02.03.2016, the petitioner, after expressing their stand thatthey have no client registered under the name and style“RADFORD/RADFORD Group, has, however, stated that they have noobjection for centralisation of the above case with Mumbai.Thereafter, the impugned order was passed by the 1[st] respondent,transferring the case of the petitioner from Chennai to Mumbaias stated supra. 3. Mr.M.P.Senthilkumar, learned counsel appearing for thepetitioner submitted that when the petitioner has no connectionwhatsoever with the Radford Group, their consent given forcentralisation of the above Group Case with Mumbai cannot beconstrued as the consent given by them for transferring theirown case from Chennai to Mumbai, in the absence of any specificdetails furnished in the notice dated 23.02.2016 to that effectviz., about the proposal of transferring the petitioner's owncase to Mumbai. He further submitted that when section 127 (2)specifically contemplates that reasons must be recorded inwriting while transferring the case, the first respondent hasnot stated any reason in the impugned order and therefore, thesame is a non-speaking one. 3. Mr.M.P.Senthilkumar, learned counsel appearing for thepetitioner submitted that when the petitioner has no connectionwhatsoever with the Radford Group, their consent given forcentralisation of the above Group Case with Mumbai cannot beconstrued as the consent given by them for transferring theirown case from Chennai to Mumbai, in the absence of any specificdetails furnished in the notice dated 23.02.2016 to that effectviz., about the proposal of transferring the petitioner's owncase to Mumbai. He further submitted that when section 127 (2)specifically contemplates that reasons must be recorded inwriting while transferring the case, the first respondent hasnot stated any reason in the impugned order and therefore, thesame is a non-speaking one. 4. On the other hand, the learned counsel appearing for therespondent Department submitted that the very issuance of noticeunder section 127(2) giving an opportunity to the petitioner tofile their reply would undoubtedly indicate that the Departmentwanted to transfer the petitioner's own case to Mumbai to betagged along with Radford Group cases and therefore, thecontention of the petitioner before this Court is not correct.She further pointed out that the petitioner having given NoObjection for centralisation of the case with Mumbai, is notentitled to maintain this writ petition before this Court. It isher further contention that once the petitioner has given noobjection for transfer, the 1[st] respondent is not expected togive any reason in the impugned order for transferring the casefrom Chennai to Mumbai. 5. Heard both sides. 6. Admittedly, the petitioner is an assessee on the file ofthe 3[rd] respondent herein namely, the Deputy Commissioner ofIncome Tax, Corporate Circle – 1(1),Chennai. It is not indispute that except the notice dated 23.02.2016, no othercommunication was issued to the petitioner indicating theproposal of transferring the petitioner's own case from Chennaito Mumbai. Thus, the only communication dated 23.02.2016 givenunder section 127(2) of the Income Tax Act, which is availablebefore the petitioner,reads as follows: “ToM/s. Aditya Birla Money Ltd55, Ali Tower,Greams Road,Chennai – 600 006.Sir / Madam,Sub: Centralisation of search & seizurecases – your own – M/s.Radford groupcases – reg. ----Consequent on the search/survey conductedin the above group case, the DGIT (Inv.), Chennai hasgranted approval for centralization of the abovegroup case with Mumbai. Accordingly, you are herebygiven an opportunity u/s.127(2) to file your reply. I am directed to request you to file your replyin this regard by 01.03.2016. Yours faithfully, K BASKARANIncome Tax Officer (Hqrs)O/o. Pr. Commissioner of Income taxChennai-1, Chennai-34.” “ToM/s. Aditya Birla Money Ltd55, Ali Tower,Greams Road,Chennai – 600 006.Sir / Madam,Sub: Centralisation of search & seizurecases – your own – M/s.Radford groupcases – reg. ----Consequent on the search/survey conductedin the above group case, the DGIT (Inv.), Chennai hasgranted approval for centralization of the abovegroup case with Mumbai. Accordingly, you are herebygiven an opportunity u/s.127(2) to file your reply. I am directed to request you to file your replyin this regard by 01.03.2016. Yours faithfully, K BASKARANIncome Tax Officer (Hqrs)O/o. Pr. Commissioner of Income taxChennai-1, Chennai-34.” 7. A perusal of the above said communication does notanywhere indicate the intention of Department to transfer thepetitioner's own case from Chennai to Mumbai. On the other hand,a careful perusal of the said notice would only show that therespondent Department sought to centralize the Radford Groupcase with Mumbai, for which, they sought a reply from thepetitioner under Section 127 (2) of the said Act. No doubt, thepetitioner has stated in their reply dated 02.03.2016 that theyhave no objection for centralization of the above cases withMumbai. As rightly pointed out by the learned counsel for thepetitioner, a thorough perusal of the reply dated 02.03.2016would undoubtedly indicate that the petitioner has given theirno objection for centralization of the Radford case with Mumbai,also by specifically stating that they have no clientregistered under the name and style “RADFORD/RADFORD GROUP. Inother words, it seems that the petitioner has given such noobjection only for centralization of the Radford Group cases atMumbai and there is no indication whatsoever in their replyexpressing their willingness for transferring their own casefrom Chennai to Mumbai. Therefore, I am of the view that thevery notice issued under section 127 (2) to the petitioner dated23.02.2016 is bereft of material particulars indicatingspecifically that the petitioner case is sought to betransferred from Chennai to Mumbai to be tagged along with theRadford Group cases. In the absence of such materialparticulars, I do not think that the No Objection given by thepetitioner, that too, for centralization of the Radford Groupcases can have any barring or relevance on the impugned transferorder. Apart from the above said fact, it is curious to notethat the 1[st] respondent, while passing the order on 04.04.2016has not at all referred to the reply given by the petitioner on02.03.2016. Hence, it is the bounden duty of the 1[st] respondentto record the reasons for transfer, especially, when section 127(2) contemplates the recording of such reasons. In this case, ithas not been done so. 8. Considering all these aspects, I am of the view that thematter has to go back to the 1[st] respondent for passing freshorder after issuing notice to the petitioner with materialparticulars and after hearing their objections. Accordingly,,the writ petition is allowed and the impugned order of 1[st]respondent dated 04.04.2016 is set aside. Consequently, thematter is remitted back to the 1[st] respondent for passing freshorders after issuing due notice to the petitioner. The 1[st]respondent shall issue such notice to the petitioner within aperiod of two weeks from the date of receipt of a copy of thisorder. On receipt of the said notice, the petitioner shall givetheir reply within a period of two weeks thereafter. On receiptof such reply, the 1[st] respondent shall pass an order under section 127 (2) within a period of three weeks thereafter, aftergiving an opportunity of personal hearing to the petitioner. Itis made clear that this Court is not expressing any view on themerits on the matter, touching upon the reasons for transferringthe petitioner's case from Chennai to Mumbai, as it is for the1[st] respondent to consider and decide after considering theobjections raised by the petitioner. No costs. Consequentlyconnected miscellaneous petitions are also closed. Sd/- Assistant Registrar(CS V) //True Copy// Sub Assistant RegistrarVsi/cgiTo1.The Principal Commissioner of Income Tax, Chennai – 1.Room No.701, 7[th] Floor, Wanaparthy Block,# 121, Uthamar Gandhi Road,Nungambakkam, Chennai – 600 034.2.The Director General of Income Tax (Investigation),Aayakar Bhavan,# 108, Nungambakkam High Road,Nungambakkam, Chennai – 600 034.3.The Deputy Commissioner of Income Tax, Corporate Circle – 1(1),#121, Nungambakkam High Road,Nungambakkam, Chennai – 600 034.4.The Director General of Income Tax (Investigation),Room No.304, Scindia House,Ballard Estate, Mumbai – 400 038. 5.The Chief Commissioner of Income Tax, Central Circle – 2,Room No.108, Aayakar Bhavan,M.K.Road, Mumbai – 400 020.Room No.108, Aayakar Bhavan,M.K.Road, Mumbai – 400 020. 6.The Deputy Commissioner of Income Tax,Central Circle – 3 (4), Aayakar Bhavan,M.K.Road, Mumbai – 400 020.Central Circle – 3 (4), Aayakar Bhavan,M.K.Road, Mumbai – 400 020. +1cc to Mr.G.Baskar, Advocate Sr.39803 +1cc to M/S.Hemamurali Krishnan, Advocate Sr.40231 W.P.No.847 of 2017 nrjk[co]srg 19/06/2017