Department may centralize assessment if there are sufficient reasons: Bombay High Court upholds transfer order U/s 127
Facts:
1. The petitioner is a Non-Resident Indian (NRI), who is stated to be living in Dubai since 1992. The petitioner is also an Indian assessee having a Permanent Account Number (PAN) and is assessed to income-tax with the jurisdictional income tax officials at Mumbai.
2. The Income-tax department had carried out search proceedings involving the petitioner on 30 June 2019 at New Delhi. It appeared that the petitioner had transactions with Indian citizens being investigated.
3. It was stated that since the cases of all such entities were centralized in Delhi, the case of the petitioner was also proposed to be centralized with the Delhi charge for coordinated investigation.
4. The petitioner was issued a SCN in terms of Sec 127 of the Income Tax Act. The petitioner recorded that the show cause notice merely stated that the case needs to be centralized without any basis in law and the copy of the order for transfer was not provided to him.
5. Petitioner filed a petition with the Bombay High Court.
Hon Bombay HC held as below:
1. The reason mentioned in the order of transfer “decentralization of cases”, satisfies the requirements of Sec 127 of recording the reasons for transfer.
2. A substantive material justifying the transfer was also disclosed to the petitioner in the show cause notice dated 19 March 2021 issued to the petitioner.
3. Search proceedings revealed the petitioner’s involvement in evasion of taxes, abetment and facilitation of the evasion of taxes by various other individuals and companies and that the petitioner had many transactions with persons whose names are set out in the show cause notice.
4. The transfer of case from one place to another is a matter which may disturb some convenience of Assesseee, but if other factors of importance of higher degree are available, an order of transfer otherwise validly passed, is not to be assailed as something which has caused no serious prejudice to Assessee.
5. Thus the writ is rejected.
The copy of the order is attached herewith:
