# Sri Harbhajan Singh Chadha v. Deputy Commissioner Of Income Tax & Ors

- **Citation:** (2016) 8 ILRA 652
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-08-30
- **Bench:** Sudhir Agarwal, Dr. Kaushal Jayendra Thaker
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sri-harbhajan-singh-chadha-v-deputy-commissioner-of-income-tax-ors-44369
- **Pages:** 11

## Text

652 INDIAN LAW REPORTS ALLAHABAD SERIES

(2016) 8 ILRA 652
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.08.2016

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE DR. KAUSHAL JAYENDRA THAKER, J.

Writ Tax No.- 70 Of 2016

Sri Harbhajan Singh Chadha ...Petitioner
Versus
Deputy Commissioner Of Income Tax & Ors. ...Respondents

Counsel for Petitioner:
Suyash Agarwal

Counsel for Respondents:
C.S.C (I.T.Deptt.), Ashok Kumar, Manish Goyal

Income Tax - Transfer of Cases - Section 127(2)(a) of Income Tax Act, 1961 - Opportunity of
Hearing - Recording of Reasons - Phrase "Wherever it is Possible to Do So" - Coordinated
Investigation - Search and Seizure

INCOME TAX ACT, 1961 - Section 127(2)(a) - Transfer of income tax cases from ACIT,
Moradabad to ACIT, New Delhi - Challenge to transfer order - Grounds: no show cause notice,
no opportunity of hearing, no reasons recorded - Held: Section 127(2)(a) contemplates two distinct
requirements: (i) affording Assessee a reasonable opportunity of hearing, wherever it is possible to do so; and
(ii) recording of reasons for passing the transfer order - First requirement of opportunity of hearing is
conditional and not mandatory in all cases - It is subject to the phrase "wherever it is possible to do so" -
However, second requirement of recording of reasons is mandatory and absolute in all cases irrespective of
whether opportunity of hearing was afforded or not - Reasons must not merely be recorded in file but must
be contained in the order itself and communicated to Assessee - Non-communication of reasons renders the
order of transfer bad in law.
(Paras 12, 13, 17 and 28)

INCOME TAX ACT, 1961 - Section 127(2)(a) - Phrase "Wherever it is Possible to Do So" -
Meaning and scope - Held: The phrase "wherever it is possible to do so" qualifies only the requirement of
opportunity of hearing and not the requirement of recording of reasons - Legislature has consciously used
this phrase and it cannot be rendered redundant or ignored - When Authority bona fide and reasonably
concludes that grant of opportunity is not possible in the facts and circumstances of the case, order of transfer
without hearing is not ipso facto vitiated - Authority must act reasonably and bona fide in arriving at such
conclusion - Mere absence of notice to Assessee will not vitiate order of transfer if circumstances justify such
non-affording of opportunity - Requirement of opportunity is not mandatory but discretionary, subject to
feasibility.
(Paras 20, 23, 24 and 25)
8 All. Sri Harbhajan Singh Chadha Vs Deputy Commissioner Of Income Tax & Ors.
653
INCOME TAX ACT, 1961 - Section 127(2)(a) - Sufficiency of Reasons - Transfer order
mentioning centralization of cases of group of Assessees at one place consequent upon search
and seizure operations conducted at various places - Whether sufficient - Held: Yes. Requirement
of reasons under Section 127 does not mean that order must contain a detailed discussion on several grounds
- Requirement of statute stands satisfied if from a bare reading of the order, any person of ordinary
prudence may ascertain the reason which prevailed in the mind of Competent Authority - Such reason must
not be flimsy, imaginary or whimsical and must disclose application of logic and prudence - Centralization of
cases of an entire group of Assessees, where search and seizure operations have been conducted, for
coordinated investigation and assessment by one officer at one place, is a valid and sufficient reason for
passing order of transfer.
(Paras 27, 28, 29, 30 and 31)

INCOME TAX ACT, 1961 - Section 127(2)(a) - Transfer of Cases - Right of Assessee to be
Assessed by Particular Officer - Held: There is no vested right in an Assessee to be assessed by a
particular Assessing Officer - Transfer from one Assessing Officer to another may cause minor inconvenience
but does not infringe any substantial or material right of Assessee - Even after transfer, cases are dealt with
under the normal prescribed procedure - There is no differential treatment occasioned by such transfer and
the same cannot be assailed as causing serious prejudice.
(Para 23)

WRIT JURISDICTION - ARTICLE 226 - INTERFERENCE - CONDUCT OF PETITIONER -
Petitioner did not raise objection to transfer order at earliest opportunity - Objection raised only
at fag end when cases were about to become time-barred - Assessments already completed -
Appeals pending - Held: Conduct of petitioner shows that objection was raised to frustrate assessment
proceedings - Writ Court should decline to interfere in extraordinary jurisdiction in such circumstances - Not
a fit case for interference under Article 226 of the Constitution of India.
(Para 32)

RESULT:
Writ Petition dismissed. No order as to costs.

Cases Referred:
1. Ajantha Industries v. Central Board of Direct Taxes, (1976) 102 ITR 281 (SC)
2. Panna Lal Binjraj v. Union of India, AIR 1957 SC 397 (SC)
3. Kanshi Ram Agarwal v. Union of India, AIR 1965 SC 1028 (SC)
4. K.P. Mohammed Salim v. Commissioner of Income Tax, Cochin, (2008) 11 SCC 573 (SC)
5. M/s Redwood Hotel (P.) Ltd. v. Chief Commissioner of Income Tax and Others, (2003) 259 ITR
191
6. Bansal Sharevests Services Ltd. and Another v. Commissioner of Income Tax and Another,
(2006) 283 ITR 332 (All.)
7. RPS Associates v. Director of Income Tax (Investigation), (2015) 280 CTR 582 (All.)
8. Vinay Kumar and Another v. Commissioner of Income Tax and Another, (1996) 221 ITR 566
(All.)
9. Sanjay Gupta v. Union of India and Others, Writ (Tax) Petition No. 877 of 2010, decided on
25.11.2010 (All.)
10. Smt. Chandra Prabha Kushwaha and Others v. CIT and Others, Writ Tax Petition No. 16 of
2014, decided on 9.1.2014 (All.)
11. Sahara Hospitality Ltd. and Another v. Commissioner of Income Tax and Others, (2013) 352
ITR 38 (Bom.)
12. Naresh Kumar Agarwal v. Union of India, (2010) 320 ITR 361 (Cal.).
654 INDIAN LAW REPORTS ALLAHABAD SERIES

(Delivered by Hon'ble Sudhir Agarwal, J.
&
Hon'ble Dr. Kaushal Jayendra Thaker, J.)

1. Heard Sri Rakesh Ranjan Agarwal, Senior Advocate assisted by Sri Suyash Agarwal,
learned counsel for petitioner and Sri Manish Goyal, learned counsel for Respondent.

2. Petitioner has challenged order dated 11th September, 2012 passed by Commissioner of
Income Tax, Moradabad (hereinafter referred to as 'CIT') transferring income tax cases of petitioner
from the jurisdiction of Assistant Commissioner of Income Tax, Moradabad [(hereinafter refereed
to as "ACIT(M)"] to Assistant Commissioner of Income Tax, New Delhi [hereinafter referred to as
"ACIT(New Delhi)"] by exercising power under Section 127 (2)(a) of Income Tax Act, 1961
(hereinafter refereed to as 'Act, 1961'). Petitioners have also challenged notices under Sections
153(A) and 276 CC and 277D issued by Assessing Officer at New Delhi, after cases stood
transferred to New Delhi, on the ground that transfer order itself being illegal, all consequential
actions initiated by Assessing Officer at New Delhi are also illegal.

3. The order of transfer has been challenged on the ground that neither any show cause
notice nor opportunity was afforded to petitioner nor the impugned order mentions any reason
which is an obligatory requirement under Section 127, before an order of transfer could have been
passed, in view of law laid down in Ajantha Industries Vs. Central Board of Direct Taxes,
(1976) 102 ITR 281 (SC) and Division Bench judgments of this Court in Bansal Sharevests
Services Ltd. and another Vs. Commissioner of Income Tax and another, (2006) 283 ITR
332 ( All); RPS Associates Vs. Director of Income Tax ( Investigation), (2015) 280 CTR 582;
Bansal Sharevests Services and another Vs. Commissioner of Income Tax and another, (2006)
283 ITR 332; Vinay Kumar another Vs. Commissioner of Income Tax another, (1996) 221
ITR 566; Writ (Tax) Petition No. 877 of 2010, Sanjay Gupta Vs. Union of India and others
decided on 25.11.2010. Writ Tax Petition No. 16 of 2014, Smt. Chandra Prabha Kushwaha
and others Vs. CIT and others, decided on 9.1.2014 and Bombay High Court in Sahara
Hospitality Ltd. and another Vs. Commissioner of Income Tax and others, (2013) 352 ITR 38
(Bom).

4. Sri Manish Goyal, learned counsel for respondents, per contra, submitted that search and
seizure operation was carried out at different places of petitioner on 1st February, 2012 which
continued up to 3rd February, 2012. Petitioner challenged search and seizure proceedings and
warrant of authorization in Writ (Tax) No. 451 of 2012, Harbhajan Singh Chadha and others Vs.
Director of Income Tax and others. When aforesaid writ petition was pending, having regard to
incriminating material and other valuable items and cash found in search and seizure, Director of
Income Tax (Intelligence and Criminal Investigation), New Delhi [(hereinafter referred to as
"DIT(ICI)"] requested vide letter dated 1.5.2012 to Chief Commissioner of Income Tax (Central)
New Delhi (hereinafter referred to as 'CCIT (Central)' that all cases need be centralized and
assessments be made by one Assessing Officer in Central Circle, Delhi so that coordinated
investigation leading to meaningful conclusion may be carried out. Consequent thereto, and
8 All. Sri Harbhajan Singh Chadha Vs Deputy Commissioner Of Income Tax & Ors.
655
finding request to be genuine, CCIT (Central) vide letter dated 18/21 May, 2012, communicated to
Commissioner of Income Tax (Central) Circle-III, New Delhi (hereinafter refereed to as 'CIT
(Central-III)'; his administrative approval for centralization of cases under his charge. He also
advised, since some of the cases of the Group were being assessed by Assessing Officer under
Central Range-6 so functionally it would be convenient to allocate cases preferably to an officer
working with Additional Commissioner of Income Tax, Central Range-6, New Delhi, keeping in
mind equitable distribution of work.

5. Accordingly, CIT (Central-III) vide letter dated 3rd September, 2012 informed CIT that
CCIT (Central) has conveyed approval for centralization of cases at New Delhi for coordinated
investigation and hence CIT ( Central-III) is conveying concurrence for transfer of cases to
Assessing Officer at New Delhi by issuing an order under Section 127 of Act, 1961. A request was
made to take an expeditious decision in the matter. Thereafter, CIT passed impugned order dated
11.9.2012. It is mentioned in the transfer order that in view of request for centralization of twelve
cases of Chadha Group of Moradabad which include petitioner also, and concurrence granted by
CIT ( Central-III) for centralization of these cases, necessary order of transfer under Section 127 for
coordination and investigation of cases is being passed. Stand taken by respondents is that looking
to urgency and objective of coordinated investigation at one place, centralization of all cases was
found necessary.

6. Manish Goyal, counsel for respondent urged that Section 127 contemplates reasonable
opportunity of hearing "wherever it is possible to do so" and not in all cases. In the present case
looking to above facts, authorities found utmost expediency to pass immediate order hence
opportunity was not found feasible. Further, disclosure of detailed reasons could have defeated the
purpose of transfer and may have come in the way of proper and effective enquiry, hence detailed
reasons were not furnished in the order.

7. Before proceeding further, we may place on record certain additional facts which have
emerged from record. After order of transfer was passed, Assessing Officer at Delhi issued notice
under Section 153A to petitioner on 8th April, 2013 for filing returns for Assessment Years 200607 to 2011-12. Petitioner filed objection dated 30.4.2013 requesting that photocopy of seized
material has not been provided and, in absence thereof, it is not possible to file return. He,
therefore, prayed for supply of copy of seized material. He also pointed out that challenging
aforesaid search and seizure, a writ petition is pending in High Court, hence time to file return be
extended till the date of disposal of writ petition or till the date of supply of seized material,
whichever is later.

8. Assessing Officer at New Delhi vide order dated 10.10.2013 informed petitioner that
there is no restraint order in pending Writ Petition No. 451 (Tax) of 2012, therefore, petitioner
should file return since time to complete assessment would expire on 31st March, 2014.
656 INDIAN LAW REPORTS ALLAHABAD SERIES

9. For the first time, vide letter dated 18.10.2013, petitioner took objection with regard to
transfer of cases stating that no transfer order has been served upon him and, therefore, Assessing
Officer at New Delhi should inform as to how jurisdiction stood conferred upon him.

10. Assessing Officer at New Delhi then issued a notice dated 2nd January, 2014 for
proceeding under Section 276 CC and 272 (3). This notice was replied by petitioner through his
Chartered Accountant on 16th January, 2014, stating that Assessee attended office of Assessing
Officer on 18th October, 2013 i.e. the date fixed for hearing with notice under Section 142(1) and
also filed written submission through his counsel along with Vakalatnama. Fundamental objection
raised therein was regarding jurisdiction of Assessing Officer at New Delhi, since no order of
transfer was served upon petitioner. We have also been informed by counsel for parties that
Assessing Officer at New Delhi has already made assessment after transfer of cases. Against orders
of assessment, petitioner has filed appeals which are pending.

11. Now we proceed to examine respective issues raised in this petition. Power of transfer
has been exercised in this case under Section 127(2)(a) which reads as under : -

"where the Directors General or Chief Commissioners or Commissioners to whom
such Assessing Officers are subordinate are in agreement, then the Director General or Chief
Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after
giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to
do so, and after recording his reasons for doing so, pass the order;"

(emphasis added)

12. Provision is very clear, Order of transfer can be passed after complying two
requirements; (i) after giving Assessee, a reasonable opportunity of hearing wherever it is possible
to do so; and (ii) recording of reasons for doing so.

13. Statute says that opportunity of hearing is necessary in such cases where it is possible to
do so meaning thereby it is not necessary to be observed invariably in each and every case,
whenever orders transferring cases are passed. However, second requirement that reasons shall be
recorded is applicable in all the cases irrespective of the fact whether order of transfer has been
passed after giving opportunity of hearing or not. Statute is clear and in emphatic terms requires
that reasons shall be recorded by Competent Authority. Not only that but reasons must be
communicated to Assessee, otherwise very purpose of recording reasons would be frustrated. When
it is said that order shall be passed after recording reasons, in our view, reasons cannot be recorded
and kept in file but the order itself must contain reasons for transfer and communicated to Assessee.

14. Respondents in this case have taken defence that grant of opportunity was not found
feasible, therefore, referring to the words "wherever it is possible to do so", used in Section
127(2)(a), submission is that present case is one where grant of opportunity to petitioner was not
possible and hence it will not vitiate impugned order of transfer.
8 All. Sri Harbhajan Singh Chadha Vs Deputy Commissioner Of Income Tax & Ors.
657
15. We find that in various authorities wherein validity of order of transfer under Section
127(2)(a) has been dealt with, consensus view is that, opportunity of hearing if not afforded or
reasons not recorded, order of transfer would be bad. However, no authority has been placed before
us wherein this phrase "wherever it is possible to do so", has been considered in the context of
Section 127 of Act, 1961. No authority is cited to show meaning of the words "wherever it is
possible to do so" and how and in what manner, the aforesaid phrase would dilute or mitigate,
otherwise mandate of legislature, of affording a reasonable opportunity of being heard to Assessee,
before passing order of transfer.

16. In Sanjay Gupta Vs. Union of India (supra), notices were issued to Assessee inviting
objections Assessee actually filed objections and thereafter transfer order was passed. Basic issue
was, where objection has been filed but neither grounds taken in the objections are discussed nor
reasons are given in the order of transfer, can it be said that reasonable opportunity was given to
Assessee and order contain reason. Court held that mere mention of words that transfer is required
for "administrative convenience and coordinated investigation", is not sufficient, particularly when
Assessee has made objections raising grounds which have not been considered at all. For this
purposes Court also relied and followed Calcutta High Court's judgment in Naresh Kumar
Agarwal Vs. Union of India, (2010) 320 ITR 361.

17. In Ajantha Industries Vs. Central Board of Direct Taxes (supra), a notice was
served upon Assessee, proposing transfer to facilitate investigation whereagainst Assessee filed
objection and thereafter order of transfer was passed. It was challenged on the ground that no
reasons were given or communicated in the order of transfer. Revenue took a defence that reasons
were mentioned in the show cause notice, therefore, order of transfer for absence of reasons would
not be bad. This argument of Revenue was not accepted. Court said that Section 127 has been
introduced in Act, 1961 and even substituted Section 127 by Finance Act, 1976 emphasizes upon
"recording of reasons". Once an order is passed transferring a case of an Assessee to another area,
order containing reasons has to be communicated. Communication of order is absolutely essential
requirement since Assessee is then made aware of reasons which impelled authority to pass order of
transfer. Assessee shall have an opportunity to approach High Court under Article 226 of
Constitution of India. Court thus said that "we are clearly of opinion that the requirement of
recording reasons under Section 127(1) is a mandatory direction under the law and noncommunication thereof is not saved by showing that the reasons exist in the file although not
communicated to Assessee". Court specifically overruled an otherwise judgment of Delhi High
Court in Sunanda Vs. Union of India, (1975) 99 ITR 391. Court said, when law requires reasons
to be recorded in the order affecting prejudicially, interests of any person, who can challenge such
order in Court, it ceases to be a mere administrative order and the vice of violation of principles of
natural justice on account of omission to communicate reasons is not expiated.

18. In Smt. Chandra Prabha Kushwaha and others Vs. CIT and others ( supra) neither
any opportunity was afforded to Assessee nor reasons were communicated. Revenue admitted this
flaw and did not take defence that opportunity was not possible in that matter. Court therefore
followed the decision in Ajantha Industries Vs. Central Board of Direct Taxes ( supra) and
658 INDIAN LAW REPORTS ALLAHABAD SERIES

earlier Division Bench decision of this Court in Vinay Kumar Jaiswal Vs. CIT, (1996) 221 ITR
568 ( All); Ashok Kumar Jain Vs. Commissioner of Income Tax and others Writ Tax No. 620
of 2010 decided on 7.7.2014 and held that there is an admitted case of denial of opportunity and
lack of reason hence order of transfer is bad. Revenue in the relied on cases also did not take any
defence that opportunity was not possible in the facts of the cases.

19. Propositions of law with respect to application of principles of natural justice, when
specifically incorporated in a statute, and requirement of recording of reasons, distinguished from
conclusions, are well established.

20. However, in this particular case, looking into the facts, we have to examine, whether
respondents are justified in contending that non issue of notice and giving reasonable opportunity to
Assessee, would not vitiate order of transfer in view of the fact that the requirement of notice is
qualified with the phrase "wherever it is possible to do so" and, therefore, in every case, law does
not require that opportunity is must" and also "whether this defence is available in this case".

21. Phrase "wherever it is possible to do so" as such could not be shown to have been used
in any other statute and came up for consideration before Court, but a similar phrase "as far as
possible" has been used in several statutes and considered by Court's time and again.

22. Section 127 is a procedural provision for ascertaining liability of an Assessee to
determine in a fair, impartial and effective manner, so that no one is unduly benefited and wherever
competent authority, having power of transfer under section 127 or any Assessee has apprehension,
or for other administrative reason, it is found necessary that case should be transferred from
jurisdiction of one authority to another, the same may be done. Statute also incorporates
requirement of principles of natural justice as also recording of reason but simultaneously has used
phrase "whenever it is possible to do so". This has been noticed by a Constitution Bench in Kanshi
Ram Agarwal Vs. Union of India, AIR 1965 SC 1028. Reading Section 127, Court has said that
Section 127(1) imposes an obligation on the authority exercising its power under the said Section to
record its reasons for directing transfer of a case from one Income Tax Officer to another. It further
requires that whenever power conferred by Section 127 is intended to be exercised, an opportunity
should be given to Assessee, "whenever it is possible to do so" and reasons have to be recorded for
making the order of transfer. Court thus held that opportunity to Assessee shall be offered
"whenever it is possible to do so" but order must contain reasons for transfer. Court further held
that "requirement that opportunity should be given, cannot be said to be on obligatory, because it
has been left to discretion of authority to consider whether it is possible to give such opportunity to
Assessee". This is of course, true, in coming to the conclusion, that Authority must act reasonably
and bona-fide; but if Authority comes to conclusion that it is not possible to give a reasonable
opportunity to Assessee, same can be dispensed with. However, it is not so with regard to
requirement that reasons must be recorded for making transfer. So far as Section 127(1) is
concerned, there is no dispute about this position. The twin requirement under Section 127 has
some reasons. It is true that under Act, 1961 i.e. Section 120 read with Section 124, Assessing
Officer is vested with jurisdiction over an area where any person carrying on the business or
8 All. Sri Harbhajan Singh Chadha Vs Deputy Commissioner Of Income Tax & Ors.
659
profession resides. Therefore, in normal course, an Assessee is entitled to be assessed by Assessing
Officer having jurisdiction as stated in the aforesaid provisions, but there is no such vested right in
an Assessee to be assessed by a particular Assessing Officer. In given case, Competent Authority
may transfer a matter from one Assessing Officer to another, may be having effect of change of
place also but that will not affect any substantial right of Assessee.

23. On this aspect, we find support from judgment in Panna Lal Binjraj Vs. Union of
India, AIR 1957 (SC) 397, wherein Court held that infringement of right to be assessed by
Assessing Officer having jurisdiction in a particular area by transferring case to another cannot be
said to be an infringement, material in nature. It is only a deviation of a minor character from
general standard and does not necessarily involve a denial of equal rights for simple reason. Even
after such transfer, case is dealt with under the normal procedure which is prescribed in the Act.
Production and investigation of books of account, enquiries to be made by Income Tax Officer are
same in a transferred case as in others which remain with Assessing officer of area in which other
Assessee resides or carries on business. There is thus no differential treatment and no scope for
argument that particular Assessee is discriminated with reference to other Assessees similarly
situated whose cases are not transferred, therefore, 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 serious prejudice to Assessee. An attempt on the part of learned
counsel for Assessee that mere fact that opportunity was not given shall vitiate order of transfer, in
our view, cannot be accepted for reason that statute does not make requirement of opportunity
mandatory but it is subject to condition "wherever it is possible to do so" and in a given case, the
mere fact that notice was not given to Assessee, will not vitiate order if the circumstances do justify
such non affording opportunity.

24. A careful reading of Section 127(2)(a) leads no manner of doubt that requirement of
"reasonable opportunity" to Assessee is subjected and conditional i.e. "whenever it is possible to do
so". Department may proceed to pass an order of transfer without giving such opportunity if
opportunity is not possible.

25. When a phrase has actually been used by Legislature in a statute, we cannot either
ignore it or omit or render it redundant by reading that in every case an opportunity is must, else
order of transfer is rendered bad. The words used by legislature have to be read and given due
meaning and effect and that is the basic principle of interpretation. Each and every word used by
legislature has some meaning or consequence and whenever an statute is considered, every word
must be given its logical meaning and consequence unless there appears to be some inconsistency
or conflict resulting in consequences to be disturbing or there are other compelling reasons showing
that some part does not convey the same meaning as it ought to be or the same is redundant or is
inconsistent with rest of the provisions. However that is not so particular in this case and from
judgment of Constitution Bench in Panna Lal Binjraj Vs. Union of India (supra), we find that
requirement of opportunity has not been held mandatory, and mandate is available only for
requirement of recording of reason.
660 INDIAN LAW REPORTS ALLAHABAD SERIES

26. Absence of opportunity to Assessee has been explained on the ground that there is a
large number of Assessees' who were under different Assessing Officers and some of the matter
were already assigned to Assessing Officer under Central Range-6, New Delhi. Thus for
coordinated assessment by an authority who has a complete information with him, transfer of cases
from Moradabad which was under one Commissioner, to Delhi which was under another
Commissioner, was found expedient and since time was short as a period would have expired on
31st March, 2012, Competent Authority in its wisdom found it a case of urgency to transfer cases
without giving any opportunity. In our view, looking to the entire facts as noted above, it is not a fit
case where impugned order of transfer deserves to be interfered on the ground that no reasonable
opportunity was granted to Assessee.

27. Then comes the question "whether order of transfer contains any reason and mandatory
requirement of recording of reason is satisfied or not". Only reason mentioned in the order is
"centralization of cases at one place" since some other cases were already being assessed by
Assessing Officer under Central Range-6, New Delhi .

28. Requirement of reason under Section 127 has a basic idea that before causing some
inconvenience or prejudice to Assessee, Competent Authority passing order of transfer must show,
from order of transfer, a conscious application of mind on its part that transfer order is not in
mechanical exercise. Requirement of reasons does not mean that order must contain a detailed
discussion on several grounds for justifying order of transfer, but requirement of statute stands
satisfy if from a bare reading of order, any person of ordinary prudence may come to know as to
what is the reason which has prevailed in the mind of Competent Authority to exercise power of
transfer and such reason or ground is not flimsy, imaginary, whimsical. It must disclose that
patently, logic and prudence has been applied before passing it.

29. In M/s Redwood Hotel ( P.) Limited Vs. Chief Commissioner of Income Tax and
others, (2003) 259 ITR 191, a similar reason for transfer of cases under Section 127(2) was held
valid. Court observed that Section 127 only provides for an administrative arrangement authorizing
Chief Commissioners to transfer files from one officer to another for better and more efficient
handling of files. When group of cases are handeled, it is always desirable to have one officer
handling all assessments together so that related transactions can be better appreciated by officer.
Court further held that it is for Department to consider consolidation of all files of firms and
companies and partners and directors, including those who are now assessed at different places so
as to be assessed at one place.

30. In K.P. Mohammed Salim Vs. Commissioner of Income tax, Cochin, (2008) 11
SCC 573, considering Section 127, Court said, order of transfer is passed for the purpose of
assessment of income. It serves a larger purpose. Such an order has to be passed in public interest.
It may transfer cases involving more than one assessment year. Power of transfer in fact provides
for a machinery provision and it must be given its full effect. It must be construed in a manner so as
to make it workable. It should be construed to effectuate a charging section so as to allow the
8 All. Sri Harbhajan Singh Chadha Vs Deputy Commissioner Of Income Tax & Ors.
661
authorities concerned to do so in a manner wherefor statute was affected. Power of transfer can be
exercised for regular assessment as well as block assessment.

31. In the present case, reason of centralized assessment as a result of search and seizure
conducted at entire group of Assessee, in our view, is justified cause for transferring all the cases so
that the same may be handled by one officer at one place.

32. We find some other reasons also to non suit the petitioner. When petitioner received
notice from Assessing Officer to whom cases were transferred, at the earliest opportunity, he did
not raise any objection that cases have been transferred without complying requirement of Section
127. It is only at the fag end when there remains a short time, rendering his cases time barred, he
raised this objection obviously to frustrate the assessment. Lastly, we are also informed that
assessments have already been made and petitioner has filed appeals, which are pending. These
facts, in our view, also justify to decline interference in writ jurisdiction under Article 226 of
Constitution of India. Thus, this is not a fit case where interference by this Court in extraordinary
jurisdiction would be justified.

33. In result, writ petition fails and is hereby dismissed accordingly. There is no order as to
cost.
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662 INDIAN LAW REPORTS ALLAHABAD SERIES

(2016) 8 ILRA 662
ORIJINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.08.2016

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE DR. KAUSHAL JAYENDRA THAKER, J.

Writ Tax No.- 773 Of 2013

Commissioner Of Income Tax, Central Circle, Kanpur ...Petitioner
Versus
Income Tax Settlement Commissioner, IV Floor & Anr. ...Respondents

Counsel for Petitioner:
Ashok Kumar(S.S.C.in.Tax), Bharat Ji Agarwal, S. Chopra, Manish Goel

Counsel for Respondents:
S.D. Singh, Ashish Bansal, Nishant Mishra, S.K. Garg

Legislation referred to : Income Tax Act, 1961 - Ss. 132(1), 145, 153A, 153B, 153C, 245B, 245C,
245C(1), 245C(1A)-(1E), 245D, 245D(1), 245D(2B), 245D(2C), 245D(4), 245F, 271(1)(a), 273; Income Tax
Rules, 1962 - R. 9; Finance Act, 2007; Constitution of India - Art. 226.

NATURE OF PROCEEDINGS :

Writ petition under Article 226 of the Constitution of India filed by the Commissioner of Income Tax (Central),
Kanpur, challenging the order dated 20.12.2012 passed by the Income Tax Settlement Commission (ITSC),
New Delhi, whereby the ITSC settled the income tax dispute of the respondent-assessee - Salimuddin,
Proprietor of M/s Akbar International, Agra - at a total income of Rs. 12,36,96,506/- for Assessment Years
2004-2005 to 2011-2012, on the ground that the assessee had not made a 'full and true disclosure' of his
income in the application under Section 245C(1) of the Income Tax Act, 1961, and that the ITSC had no
jurisdiction to settle at a figure higher than that disclosed in the original application.

FACTS :

The respondent-assessee, Salimuddin, is a proprietor of M/s Akbar International, Agra, engaged in the
manufacture and sale of handicraft items primarily of marble. He was assessed to tax by the Assistant
Commissioner of Income Tax (ACIT), Central Circle, Agra. A search and seizure/survey operation was
conducted under Section 132(1) of the Income Tax Act, 1961 on 10.03.2010. Pursuant thereto, notices were
issued under Section 153A for Assessment Years 2004-2005 to 2011-2012. The assessee filed returns
disclosing an aggregate additional income of Rs. 1,76,50,000/- outside the books of accounts.

Income declared by the assessee in original returns and in returns filed under Section 153A for each
assessment year is tabulated below: