In a major setback to the Congress Leader Kamal Nath, the Calcutta High Court has dismissed a petition by the former Chief Minister of Madhya Pradesh seeking transfer of income tax proceedings to Delhi from Kolkata.
A search operation under Section 132(1) of the Act and survey under Section 133A of the Act was conducted on Praveen Kakkar, RajendarMiglani, Lalit Chhallani, Prateek Joshi and Himanshu Sharma at Kolkata, Indore, Bhopal and other places by the Investigation Wing, Delhi. The operation was conducted on April 7, 2019 and subsequent dates. The search operations resulted in statement of certain persons that there was transfer of cash to the tune of almost Rs. 20 crores from the residence of the petitioner at Delhi. Subsequently, income tax order was passed by the Principal Commissioner of Income Tax, Kolkata – 9 wherein the petitioner’s income tax assessment was transferred from Kolkata to New Delhi under Section 127 of the Act.
Justice Shekhar B. Saraf observed that the Principal Commissioner of Income Tax, Kolkata has clearly delineated the reasons of the transfer under Section 127 of the Act in the Impugned Order for a detailed and coordinated investigation of the petitioner.
“It is to be noted that the files of several other persons have also been transferred under Section 127 of the Act. The petitioner is the only one whose file is still not being transferred because of the writ petition filed before the Calcutta High Court,” the Court said.
“One cannot say that the present transfer is based only on surmises and conjectures as it is evident that the name of the petitioner has been taken by some of the persons on whom investigation, search and survey was carried out. Furthermore, the statement of certain persons also indicates that there was transfer of cash to the tune of almost Rs. 20 crores from the residence of the petitioner at Delhi. This money trail raises suspicion. Even though the said cash has been shown in the books of the All India Congress Committee, the source of the fundsfrom the Madhya Pradesh Congress Committee is required to be looked into by the tax authorities. Furthermore, the recording in the books of the All India Congress committee was done subsequent to the raids conducted by the tax authorities,” the Court observed.
Dismissing the petition, the Court added that “Moreover, unaccounted cash transactions have been clearly found in the Whatsapp chats and accompanying documents obtained from several persons wherein the term ‘KN’ has been referred to. These persons were either known to the petitioner or were associates of persons who seem to be extremely close to the petitioner.”
“In view of the above, it is clear that the present transfer is based on cogent material that requires further investigation by the tax authorities. The argument of the petitioner that they are willing to cooperate in the investigation, thereby negating the requirement of the transfer, is of no relevance as the officer conducting the coordinated search in my opinion, is best suited to investigate and carry out the assessment of the petitioner. It is to be noted that at the stage of passing an order under Section 127, after considering objections of the petitioner, the authorities are not required to give out the entire case of the tax authorities. Even if the additional information shared vide the affidavit-in-opposition and compilations are not considered, this Court finds the Impugned Order to satisfy the threshold of an administrative/quasi-administrative order,” the Court said.
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