Delhi HC upholds Centralisation of Income Tax Proceedings for Coordinated Probe, Dismisses Jurisdictional Challenge [Read Order]

In a recent ruling, the Delhi High Court dismissed a petition challenging the centralisation of income tax assessment proceedings following a search operation, upholding the validity of the jurisdictional transfer under Section 127(2) of the Income Tax Act, 1961.

The petition, filed by M/s Alta Vista Info Solutions Pvt. Ltd. and another company, contested identical orders dated November 7, 2022, transferring their cases to the Deputy/Assistant Commissioner of Income Tax (Central), Circle-01, Faridabad.

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The petitioners argued that since their registered offices were in New Delhi and they had no connection with Faridabad, the transfer was unjustified. They further claimed the impugned orders lacked valid reasoning and that the search, which triggered the centralisation, was conducted in connection with one Pavel Garg, with whom they claimed to have no association.

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However, the bench comprising Justice Vibhu Bakhru and Justice Tejas Karia rejected these contentions, observing that Pavel Garg was a director of the petitioner companies, had signed their income tax return for AY 2020-21, and had also stated the supporting affidavit for the present writ petition.

It was further noted that the petitioners maintained a manufacturing unit in Sonipat, Haryana, establishing a geographical connection to the region where the jurisdiction was transferred.

The Court noted that the orders explicitly cited the reason for centralisation: coordinated investigation and assessment arising from the search and seizure operation conducted on June 29, 2022, against Pavel Garg and related persons in Haryana.

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The Court determined that the transfer was in accordance with the established framework, citing an Office Order dated October 31, 2014, which outlined the jurisdictional structure of central tax authorities.

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The bench noted that centralization to Faridabad was in line with administrative policy for coordinated tax enforcement, and there was a clear connection between the search and the following assessment.

The High Court rejected the writ petition, concluding that the transfer served the legitimate purpose of a more effective and well-coordinated investigation, and found no procedural flaws or violations of natural justice principles in the centralization order.

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To Read the full text of the Order CLICK HERE

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