Wp v. Comissioner Of Income-Tax-7 And 2 Others

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONWRIT PETITION NO.2414 OF 2008 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2414 OF 2008 M/s.Oasis Distilleries Ltd. ..Petitioners. V/s. Commissioner of Income Tax & Ors. ..Respondents. Mr.N.M.Porwal for petitioners. Mr.Suresh Kumar for respondents. CORAM : P.B.MAJMUDAR ANDJ.P.DEVADHAR, JJ. DATED : 24TH NOVEMBER, 2008. CORAM : P.B.MAJMUDAR AND J.P.DEVADHAR, JJ. DATED : 24TH NOVEMBER, 2008. P.C. :- P.C. :- 1. By filing this petition, the petitioners have challenged the order dated 27/6/2008 passed by the Commissioner of Income Tax under section 127(2) of the Income Tax Act, 1961 by which the case, particulars of which have been given in the order, has been transferred from the DCIT, Mumbai to ACIT-7 New Delhi. Before exercising the said powers, a show cause notice was served on the petitioners on 4/01/2008. While opposing the same, the petitioners have given detailed reply to the said show cause notice. The petitioners gave reply on all the points which are from page 36 onwards of the compilation. 2. The Commissioner of Income Tax, Mumbai - = : 2 : = - thereafter, after considering the objection of the petitioners in detail has passed the impugned order under section 127(2) of the Act. It has been found that though the petitioners had a registered office at Indore, they have not filed their returns at Indore. The Directors and the Managing Director of the petitioners are residing at Delhi. The incriminating documents were seized at Delhi. The Commissioner of Income Tax has given detailed reasoning in para Nos.3.0, 3.1 and 3.2. It has been observed by the Commissioner in the said paragraphs as under :- "3.0 I have considered the objections raised by the assessee as above. As regards the first objection, the Registered office of the assessee company is at Indore and, accordingly, the assessee should have filed its return with the Assessing Officer at Indore. In this regard, the assessee has gone by its own convenience stating that the services of some of the best tax consultants are available in Mumbai. It is also stated that Mumbai is convenient from business point of view for purchase of raw material as well as supplying "spirit" manufactured by the assessee to the parties in Maharashtra. The reasons as stated cannot be accepted because the assessee should have gone by the jurisdiction in any case or the registered office should have been changed. Thus, even otherwise, the assessee was not filing return as per correct jurisdiction. 3.1 The next objection is as to whether the centralization of the case is necessary for making assessment of income. The ACIT, Central Cirle-7, New Delhi has sent his comments vide letter dated 18-6-2008, the relevant part of which is reproduced as under:- " In this regard, it is submitted that a search and seizure operation was conducted of hand baggage, check in baggage and person of Sh. Gautam Malhotra who was carrying money on 23-08-2006 at the I.G.I. - = : 3 : = - Airport, Delhi. During the courses of search and survey operation conducted at the business premises, some incriminating documents were found and seized. M/s. Oasis Distilleries Ltd. is the one of the company of this group (PAN AAACO 3509 R) is assessed with ACIT, Circle 7(1), Mumbai. The proposal of centralization of this case with CIT Central 1, New Delhi has been initiated by the Investigation Wing, New Delhi. The reason of centralization for the proposal is that the main persons running this company as directors of beneficiaries are residents of Delhi. The of hand baggage, check in baggage and person of Sh. Gautam Malhotra who was carrying money on 23-08-2006 at the I.G.I. - = : 3 : = - Airport, Delhi. During the courses of search and survey operation conducted at the business premises, some incriminating documents were found and seized. M/s. Oasis Distilleries Ltd. is the one of the company of this group (PAN AAACO 3509 R) is assessed with ACIT, Circle 7(1), Mumbai. The proposal of centralization of this case with CIT Central 1, New Delhi has been initiated by the Investigation Wing, New Delhi. The reason of centralization for the proposal is that the main persons running this company as directors of beneficiaries are residents of Delhi. The proposal has been moved for co-ordinated investigations and meaningful assessment in the group cases. " From the above it is clear that apart from seizure of cash, some incriminating documents were also found and seized from the business premises in Delhi and assessee being one of the main concerns of the group, it was necessary that the documents seized and further information collected as a result of enquiry is properly used in a meaningful and co-ordinated manner in assessment of the group cases, including the assessee. An affidavit from Shri Gautam Malhotra dated 4th February, 2008 has been filed before me in which he has admitted that he has been assisting in his father’s business of M/s. Oasis Distilleries Ltd. for last several years. 3.2 The next objection taken by the assessee is that the centralization will result in dislocation and incurring of extra expenditure and also that the services of qualified tax consultants will not be available. This objection is not valid of qualified Delhi is as big as Mumbai and the asessee can easily get the services of qualified tax consultants in Delhi. Incurring of extra expenditure or dislocation is not a factor because Directors and the Managing Director are already residing in Delhi and the assessee is in a better position to manage its affairs in Delhi. " 3. Learned counsel for the petitioners vehemently submitted that before the transfer, a show notice is required to be given and objection of the - = : 4 : = - petitioners should have been invited. In order to substantiate his argument, he has relied upon certain Judgments of various High Courts. So far as the factual aspect of this case is concerned, it is not in dispute that a show cause notice has already been issued to the petitioners. In fact, the petitioners have given a detailed objection on merits of each and every point and after considering the same, a reasoned order has been passed by the Commissioner after proper application of mind. Under these circumstances, the order of the Commissioner of Income Tax cannot be said to be contrary to law in any manner. 4. Learned counsel for the petitioners has also relied upon the Division Bench Judgment of this Court in the case of One-up Shares & Stock Brokers One-up Shares & Stock BrokersPvt. Ltd. V/s. R.R.Singh, Commissioner of IncomeTax & Ors. reported in (2003) 262 I.T.R. 275. This Pvt. Ltd. V/s. R.R.Singh, Commissioner of Income Tax & Ors. Court has held that if there is a prima facie case for transfer of the matter, the High Court should not interfere under Article 226 of the Constitution of India against the said order of transfer. Learned counsel for the petitioners further submitted that on merits the respondents have no case. In our view, this submission cannot be considered by us in this petition as we are not required to decide other issues touching the merits of the main proceedings. If there - = : 5 : = - is a prima facie case for transfer and as per the detailed reasoning given by the Commissioner of Income Pvt. Ltd. V/s. R.R.Singh, Commissioner of Income Tax & Ors. Court has held that if there is a prima facie case for transfer of the matter, the High Court should not interfere under Article 226 of the Constitution of India against the said order of transfer. Learned counsel for the petitioners further submitted that on merits the respondents have no case. In our view, this submission cannot be considered by us in this petition as we are not required to decide other issues touching the merits of the main proceedings. If there - = : 5 : = - is a prima facie case for transfer and as per the detailed reasoning given by the Commissioner of Income Tax, there is a case for transfer, this Court would not to like to exercise its jurisdiction under Article 226 & 227 of the Constitution of India. We do not find any substance in the petition and the same is dismissed with no order as to costs. (P.B.MAJMUDARJ.) (P.B.MAJMUDAR (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.)