Wp/12186/2020 Of Lalit Kumar Chhallani v. The Principal Commissioner Of Income Tax 9

W.P.Nos.12186, 12191 and 12194 of 2020andWMP Nos.15032, 14929, 14931, 15034, 15037 and 14934 of 2020 Writ Petition filed under Article 226 of the Constitutionof India praying to issue Writ of Certiorari to call for therecords related to PAN No. of the petitioner from 1[st]and 2[nd] respondents and quashing the order by Notification –17/2019-20inPCIT-9/ITO(HQ)/Notification/2019-20dated23.01.2020 passed by the 1[st] respondent under Section 127 of theIncome Tax Act, 1961 transferring case of the petitioner fromChennai to New Delhi. Writ Petition filed under Article 226 of the Constitutionof India praying to issue Writ of Certiorarified Mandamus to https://hcservices.ecourts.gov.in/hcservices/ call for the records of the 1[st] and 2[nd] respondents pertaining toPAN No.AADPV9237B of the petitioner and quashing the order byNotification-17/2019-20 in PCIT-9/ITO(HQ)/Notification/2019-20dated 23.01.2020 passed by 1[st] respondent under Section 127 ofthe Income Tax Act, 1961 transferring case of the petitionerfrom Chennai to New Delhi. Prayer in W.P.No.12194 of 2020: Writ Petition filed under Article 226 of the Constitutionof India praying to issue Writ of Certiorarified Mandamus tocall for the records of the 1[st] and 2[nd] respondents pertaining toPAN No.ARRPS1721J of the petitioner and quashing the order byNotification-17/2019-20 in PCIT-9/ITO(HQ)/Notification/2019-20dated 23.01.2020 passed by 1[st] respondent under Section 127 ofthe Income Tax Act, 1961 transferring case of the petitionerfrom Chennai to New Delhi. For Petitioners : Mr.Karthik Seshadri for Ms.Yashwini Vijayakumar The petitioners are related and form part of a family.Admittedly, the premises of the petitioners are part of group inwhich proceedings for search were initiated, i.e., in the casesof one Praveen Kakkar, Rajendra Miglani and their associates,Himanshu Sharma, Lalit Challani and Prateek Joshi, all stated tobe connected with Amira Food Pvt. Ltd. The search were conductedon 07.04.2019 by the Income Tax Department in terms of Section132 of the Income Tax Act, 1961 (in short 'Act'). 2. The impugned orders, all dated 23.01.2020, as per whichthe proposal for transfer of PAN of the petitioners has beenconfirmed, was preceded by a notice dated 03.09.2019. Thenotice merely states that the Department proposes to transferthe PANs of the petitioners from Income Tax Officer, NCW 5(2)to Deputy Commissioner of Income Tax/Assistant Commissioner ofIncome Tax, Central Circle 18, New Delhi, and extends anopportunity of hearing to the petitioner to putforth their https://hcservices.ecourts.gov.in/hcservices/ objections, in the absence of which, the transfer would standconfirmed. The petitioners filed their objections dated13.09.2019, also seeking reasons for such transfer and uponconsideration of the same, the impugned orders have come to bepassed. No reasons have been supplied. 3. Before me, the petitioners reiterate that their requestfor the supply of reasons for transfer were never considered.The files were thus called for and the reasons have beensupplied in a sealed cover. A perusal of the same wouldindicate that the transfer is to facilitate a proper assessmentof all the group entities that were subject to searchproceedings and this is in line with Board's Instruction bearingNo.8 dated 14.08.2002, reading as follows: SECTION 127 OF THEINCOME-TAX ACT, 1961 – INCOME – TAXAUTHORITIES – POWER TO TRANSFER CASES CENTRALISATIONOF SEARCH CASESINSTRUCTION No.8, DATED 14-08-2002 In supersession of all existing instructions onabove subject, the Board have decided to centralizethe search cases as under:- 3. Before me, the petitioners reiterate that their requestfor the supply of reasons for transfer were never considered.The files were thus called for and the reasons have beensupplied in a sealed cover. A perusal of the same wouldindicate that the transfer is to facilitate a proper assessmentof all the group entities that were subject to searchproceedings and this is in line with Board's Instruction bearingNo.8 dated 14.08.2002, reading as follows: SECTION 127 OF THEINCOME-TAX ACT, 1961 – INCOME – TAXAUTHORITIES – POWER TO TRANSFER CASES CENTRALISATIONOF SEARCH CASESINSTRUCTION No.8, DATED 14-08-2002 In supersession of all existing instructions onabove subject, the Board have decided to centralizethe search cases as under:- (i) Normally, the search cases shall becentralized in central charges. However, DirectorGeneral of Income-tax (Inv.)/Chief Commissioner ofIncome-tax (Central) may take a decision not tocentralize a search case in central charges because ofheavy work load in central charges and/or lowinvestigation potential/tax impact. (ii) Search cases in the region where there is nocentral charge and where the search cases are notcentralized in central charges shall be centralized inother charges in consultation with Chief Commissioner(s) of Income-tax having jurisdiction over core casesof the Group.' 4. Thus, as a matter of policy, the Central Board of DirectTaxes has decided upon centralisation of all search assessmentsin one charge granting discretion to the concerned DirectorGeneral of Income Tax (Inv.)/Chief Commissioner of IncomeTax(Central) to deviate from such a decision (not to centralize asearch case) on account of work load, low investigationpotential or tax impact of any of the entities of the group. 5. A policy decision such as the above, is in publicinterest and intended to facilitate proper assessment of searchcases, as it is expected that the issues arising from thesematters may be intertwined or inter-connected. I find no reasonto interfere in this policy. 6. As far as post search assessments are concerned, I amgiven to understand that the assessments will continue to beframed by the Officer to whom charge is entrusted uponcentralization. It stands to reason that the central charge isdecentralised as soon as possible in order that normalcy mayresume. 7. Learned counsel for the petitioners relies upon adecision of the Andhra Pradesh High Court in the case ofVijayasanthi Investments Pvt. Ltd. V. Chief Commissioner ofIncome Tax and others (187 ITR 405) drawing my attention toparagraph 13, wherein the Division Bench states that where atransfer of assessment is proposed, the authority proposing suchtransfer must, whereever it is possible, give the assessee areasonable opportunity of being heard in order to effectivelyshow cause against the proposed transfer. 8. It is a settled proposition that in case of transfer,such opportunity has to be extended. However, two distinguishingfactors would be that in the case of Vijayasanthi (supra), theentity in question was not part of the group of entites searchedbut a standalone assessee whose assessment was proposed to betransferred. The second distinguishing factor is the decisionwas rendered on 15.11.1990 prior to the issuance of instructionsby the Central Board of Direct Taxes in the year 2002. 9. With the aforesaid observations, these Writ Petitionsare dismissed. No costs. Connected Miscellaneous Petitions arealso dismissed. sl Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar To 1. The Principal Commissioner of Income Tax – 9 Chennai, 2[nd] Floor, Tower – 1, BSNL Building, 16, Greams Road, Chennai – 600 006. Chennai, 2[nd] Floor, Tower – 1, BSNL Building, 16, Greams Road, Chennai – 600 006. https://hcservices.ecourts.gov.in/hcservices/ 2. Income Tax Officer (Hqrs )-1 Officer of the PCIT -9, Chennai, 9. With the aforesaid observations, these Writ Petitionsare dismissed. No costs. Connected Miscellaneous Petitions arealso dismissed. sl Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar To 1. The Principal Commissioner of Income Tax – 9 Chennai, 2[nd] Floor, Tower – 1, BSNL Building, 16, Greams Road, Chennai – 600 006. Chennai, 2[nd] Floor, Tower – 1, BSNL Building, 16, Greams Road, Chennai – 600 006. https://hcservices.ecourts.gov.in/hcservices/ 2. Income Tax Officer (Hqrs )-1 Officer of the PCIT -9, Chennai, 2[nd] Floor, Tower – 1, BSNL Building, 16, Greams Road, Chennai – 600 006. 3. Deputy Commissioner of Income Tax Central Circle – 18, New Delhi. +1cc to Ms.Yashwini Vijayakumar, Advocate, S.R.No.20272 +1cc to Mrs.Hema Muralikrishnan, Advocate, S.R.No.19462 W.P.Nos.12186, 12191 and 12194 of 2020and WMP Nos.15032, 14929, 14931, 15034,15037 and 14934 of 2020RLD(CO)CS/16/06/2021