A Division Bench of the Calcutta High Court has recently quashed the transfer of jurisdiction from the Assistant Commissioner of Income Tax / Deputy Commissioner of Income Tax, Circle 13(1), Kolkata to Deputy Commissioner of Income Tax, Central Circle 1, Kanpur, done without giving assessee the opportunity of fair hearing.
J. P. Khaitan and Debanjana De appeared on behalf of the appellant-Nouvelle Advisory Services Private Limited, and submitted that no search and survey operations were conducted on the appellant.
On the contrary, Smita Das, Senior Standing Counsel appearing for the respondents-revenue, submitted that that nexus has been established between the assessee on whom search and survey operation have been conducted and that of the appellant assessee and therefore, for administrative convenience, the assessment had been transferred to Central Circle 1, Kanpur.
Section 127 of the Income Tax Act, 1961 gives power to transfer cases.
It states that the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner of Commissioner 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, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (Whether with or without concurrent jurisdiction) also subordinate to him.
In any case, the assessee should be given a reasonable opportunity of being heard in the matter before the power under Section 127 of the Income Tax Act is invoked.
The Bench of Justice T S Sivagnanam and Justice Hiranmay Bhattacharya observed that, “we find that no such reasons have been recorded by the authority for dispensing with the opportunity of personal hearing as no show cause notice was issued to the assessee prior to order of transfer.”
The reassessment order passed under Section 148A(d) of the Income Tax Act, by the Assessing Officer in this regard was quashed, along with the transfer of jurisdiction, while remanding the matter for fresh adjudication.
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