The Madurai Bench of the Madras High Court has upheld an order transferring the income tax assessment from Theni to the Central Circle of the Income Tax Department in Kochi. The Court found that the transfer was in line with Central Board of Direct Taxes (CBDT) guidelines and arose from a search action which led to the seizure of Rs. 50 lakhs from the petitioner in the State of Kerala.
A. Uthayakumar had challenged the transfer order issued by the Principal Commissioner of Income Tax on 05.02.2025 under Section 127 of the Income Tax Act. The petitioner argued that the transfer order lacked specific reasons and violated the principles of natural justice. He submitted that in light of the new faceless assessment scheme, the need for physical coordination no longer existed and therefore the assessment could have continued at Theni without requiring a shift to Kochi.
Want a deeper insight into the Income Tax Bill, 2025? Click here
In response, the Revenue Department submitted that a search was conducted at the petitioner’s premises in Kerala, pursuant to which a sum of Rs. 50 lakhs was seized. It was contended that in such cases, as per the CBDT guidelines issued in 2008, assessments are to be carried out by the Central Circle. The counsel for the respondents further pointed out that sufficient opportunity had been given to the petitioner before passing the transfer order, and emphasized that faceless assessment does not preclude the need for coordinated investigation, especially in search-related matters.
After hearing both sides, the Court noted that the petitioner had not shown any compelling grounds to interfere with the transfer order. The Court observed that the seizure during the search and the guidelines clearly justified the transfer of jurisdiction. The submission that the assessment could remain at Theni due to the faceless scheme was found to be unpersuasive in the context of a coordinated investigation involving a significant cash seizure.
Justice Vivek Kumar Singh held that the impugned order did not suffer from any legal infirmity, and the transfer was justified under the law and departmental instructions. The Court dismissed the writ petition and declined to interfere with the decision of the tax authorities.
Know Practical Aspects of Tax Planning, Click Here
The Court’s reasoning drew support from settled judicial principles, including the position laid down by the Supreme Court in 1981, which upheld the validity of transfers made under Section 127 of the Income Tax Act where they were grounded in administrative necessity and investigation requirements.
The writ petition was dismissed on 03.03.2025, with no order as to costs. Connected miscellaneous petitions were also closed
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
