Wp(C)/302/2013 Of Continental Milkose India Ltd v. Commissioner Of Income Tax, Dibrugarh And 6 Ors

WP(C) 302/2013BEFOREHON’BLE THE CHIEF JUSTICE MR. A.K. GOELHON’BLE MR. JUSTICE A.K. GOSWAMI (A.K.Goel, CJ) This petition seeks quashing of order dated 20.12.2012 passed by the Commissioner of Income-Tax, Dibrugarh under section 127(2)(a) of the Income-Tax Act, 1961 transferring the cases of assessment of the petitioner from Dibrugarh to New Delhi for effective coordinated investigation and administrative convenience. According to the impugned order, a search and seizure operation was carried out in Continental Milkose (India) Group on 9.3.2012 at New Delhi and, thereafter, notice dated 30.8.2012 was issued by the Commissioner of Income-Tax, Dibrugarh requiring Managing Director of M/s Continental Milkose (India) Ltd. givingan opportunity against the proposed transfer of assessment cases to New Delhi. The said Company submitted its reply dated 30.10.2012 to the effect that all theDirectors of the Company were residing at Dibrugarh and the whole group was being assessed at Dibrugarh since inception and the attending proceedings at New Delhi will entail huge expenditure and difficulties. After consideration of the said reply, the impugned order dated 20.12.2012 was passed. It was observed that the Company had registered office at New Delhi with business activities in Noida.The Directors of the Company were living at A-73, New Friends Colony for quite long time. Specific evidence had been gathered regarding tax evasion by the group at New Delhi. Further enquiries were required to be conducted at New Delhi andto some extent in North East. Since major business activities are in and aroundDelhi and the control is also in Delhi, the cases were required to be centralized at Delhi for effective coordinated investigation and administrative convenience. Grievance in the petition is that the exercise of power by way of the impugned order is ultra-vires Section 127(a) of the Income Tax Act, 1961 as there was disagreement between the Chief Commissioner of Income-Tax, Shillong under whose jurisdiction the assessment was being made and the Director General of Taxes(Investigation), New Delhi, as reflected in the letters dated 25.5.2012 and 25.7.2012. It was also submitted that since the case does not fall under Section 127(2)(a), the power of transfer, if at all, would be exercised under Section 127(2)(b) by such officers who may be specially authorized by the CCIT, which has not been done in this case. Learned counsel for the Revenue opposed the above submission and points out that though an opinion was expressed by the Chief Commissioner of Taxes, Shillong, finally a decision has been taken, on which there is no disagreement. A show cause notice was duly given vide letter dated 30.8.2012 by the Commissionerof Income Tax, Dibrugarh and reply of the petitioner thereto was duly considered and, thereafter, final order dated 20.12.2012 has been passed. Question for consideration is whether the impugned order is liable to beinterfered with on the ground that the same is beyond the scope of Section 127(2)(a). Upon due consideration, we are of the view that no interference is called for. There is no allegation of personal malafides. The order has been passed by the Commissioner of Income-Tax, Dibrugarh for transfer of cases to New Delhi. The Commissioner of Income-Tax, New Delhi has expressed its concurrence for suchcentralization vide letter dated 9.7.2012. The opinion expressed by the Chief Commissioner of Taxes, Shillong has been duly considered in letter dated 20.6.2012, the Director General of Income-tax (Investigation), New Delhi, a copy of which has been handed over by learned counsel for the petitioner during arguments, s Question for consideration is whether the impugned order is liable to beinterfered with on the ground that the same is beyond the scope of Section 127(2)(a). Upon due consideration, we are of the view that no interference is called for. There is no allegation of personal malafides. The order has been passed by the Commissioner of Income-Tax, Dibrugarh for transfer of cases to New Delhi. The Commissioner of Income-Tax, New Delhi has expressed its concurrence for suchcentralization vide letter dated 9.7.2012. The opinion expressed by the Chief Commissioner of Taxes, Shillong has been duly considered in letter dated 20.6.2012, the Director General of Income-tax (Investigation), New Delhi, a copy of which has been handed over by learned counsel for the petitioner during arguments, s tating that number of enquires are required to be conducted at Delhi and to someextent in North East. It may not be possible for an Assessing Officer in regular charge to undertake the kind of detailed and co-ordinated investigations whichwas required. This was possible only in a central charge. Though the head office of the petitioner was in Dibrugarh where it was being presently assessed, the registered office of the company and business activities of the group are mostly around New Delhi. It was further observed that some negative impact on the revenue in the return was also not correct as in the last three years tax due was Rs.24.23 lacs, Rs.18.98 lacs and Rs.15.47 lacs while amount to its credit in TDS was Rs.2.60 crores, Rs.1.66 crores and Rs.1.00 crores. Though the Chief Commissioner of Income-Tax, Shillong again wrote letter dated 25.7.2012, the Commissioner of Income-Tax, Dibrugarh issued the impugned notice on 30.8.2012, after which the Chief Commissioner of Income Tax, Shillong did not disagree with the same. Thus, it cannot be held that there was any lack of agreement between theCommissioner of Income Tax, Dibrugarh from whose jurisdiction the case is transferred or any higher authority with the Delhi Commissioner. The show cause itself was issued by the Commissioner of Income-Tax, Dibrugarh from where the proceedings have been transferred and the impugned order has also been passed by theCommissioner of Income-tax, Dibrugarh with due concurrence of the Commissioner of Income-Tax, New Delhi. From the material on record, it cannot be held that the opinion formed by the Commissioner of Income Tax, Dibrugarh is in any manner vitiated. There is material to show that there was search and seizure at Delhi and there is allegation of tax evasion at Delhi which is being investigated at Delhi. It cannot be held that the order transferring the cases is beyond the scope of statutory powerunder section 127 of the Act. Thus, we find no ground to interfere. The petition is dismissed. It is made clear that this order will not debar the petitioner from seeking re-transfer of its cases at appropriate stage, by making out a case.