P&H HC upholds Transfer of Assessment From Chandigarh to Goa u/s 127 of Income Tax Act, Citing Efficient Tax Collection and Public Interest [Read Order]

The Punjab and Haryana High Court has upheld the order of the Principal Commissioner ofIncome Tax (PCIT), Chandigarh‑I, transferring the assessment jurisdiction of the petitioner from Chandigarh to Panaji, Goa, under Section 127 of the Income Tax Act, 1961.

The Court ruled that the transfer was justified in the interest of efficient tax collection and public interest, given the nexus between Singh’s alleged undisclosed cash transactions and the larger investigation into the Blue Ocean Beverages group.

The case stemmed from search and survey proceedings conducted in January 2025 at the premises of Blue Ocean Beverages Pvt. Ltd., Panaji, Goa, under Sections 132 and 133A of the Act. Blue Ocean’s distributor, Aaroha Alcobev Distribution Pvt. Ltd., New Delhi, was also surveyed, leading to the discovery of incriminating evidence against Bhupinder Singh.

Revenue authorities alleged that Singh had received ₹10 crore in undisclosed cash from Gaurav Sharma in connection with the sale of Queen Distillers and Bottlers Pvt. Ltd., Chandigarh. WhatsApp chats and statements recorded during the survey purportedly corroborated the transaction, linking Singh to the broader inquiry into Blue Ocean’s financial irregularities.

Following the discovery, Singh was summoned to Panaji under Section 131(1A) and later issued a show‑cause notice by the PCIT, Chandigarh, proposing transfer of his case to Panaji.

Singh objected, arguing that his transaction with Gaurav Sharma was independent of Blue Ocean’s affairs, that no nexus existed between his business and the Goa‑based group, and that the transfer would cause undue hardship.

He also relied on CBDT circulars of 2009 and 2013, which caution against routine centralisation of cases without clear linkage to the searched entity.

Despite these objections, the PCIT passed a transfer order on September 8, 2025, citing incriminating evidence and the need to centralise related matters for coherent investigation. The order highlighted that modern technological processes minimise physical hardship, as most proceedings are conducted digitally.

Singh challenged this order before the High Court, contending that the transfer was discriminatory since related parties, Aaroha, Gaurav Sharma, and Lokesh Saran, were being assessed in other jurisdictions.

The Division Bench of Justice Deepak Sibal and Justice Lapita Banerji rejected Singh’s challenge. The Court noted that Section 127 empowers Commissioners to transfer cases after granting an opportunity of hearing and recording reasons.

It was observed that the PCIT had followed due process, issued notices, considered objections, and passed a reasoned order. The Bench highlighted that the transfer of jurisdiction is an administrative measure designed to ensure efficient collection of tax and prevent fragmented inquiries.

In its analysis, the Court drew upon precedents including Panalal Binraj v. Union of India (1956), where the Supreme Court upheld the constitutionality of transfer powers under the predecessor provision in the 1922 Act, and IDS Infotech Ltd. v. PCIT Central‑1, New Delhi (2020), which affirmed that transfer orders are valid if reasoned and in public interest.

The Court reiterated that while hardship may be a consideration, it cannot override the necessity of centralised investigation when evidence establishes interlinkages between transactions.

The Bench concluded that the alleged undisclosed cash transaction involving Singh was sufficiently connected to the Blue Ocean group’s inquiry, which was already centralised at Panaji.

It held that the transfer order was neither arbitrary nor discriminatory, but rather a legitimate exercise of administrative power aimed at efficient tax collection and safeguarding public interest.

The appeal was dismissed accordingly.

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