Transferring case to facilitate authorities to do an effective & co-ordinate investigation & assessment is valid: HC

Case Details: Varun Raj Pillai v. PCIT - [2022] 134 taxmann.com 86 (Gauhati)

Judiciary and Counsel Details

• • Sudhanshu Dhulia, CJ. and Kakheto Sema, J.
  • Dr. A. Todi and Ms. P.S. Chakraborty, Advs. for the Appellant. 
  • S. Sarma, Standing Counsel, I.T Deptt. for the Respondent.

Facts of the Case

The assessee had a business interest in Kollam, Kerala, and Dimapur, Nagaland, but most of the time, he resided in Dimapur, Nagaland. He was the promoter of S Group. A search under section 132 was conducted at various business and residential premises of assessee.
To have better control and centralise the assessment process, revenue transferred the case of the assessee from Dimapur, Nagaland to Kollam, Kerala.

The assessee filed a writ petition before the Gauhati High Court alleging that this had been done without proper notice and without assigning any reasons why such transfer was being made and was thus in violation of section 127.

High Court Held

The High Court held that the reasons for transferring the case from Nagaland to Kerala were given in the notice, which assigned credible reasons. The very purpose of the powers, which have been given to the authorities under section 127, is to be exercised in the public interest, and it has a larger purpose.

The purpose of transferring the case was to facilitate the revenue authorities in doing an effective and co-ordinate investigation and assessment. There is absolutely no doubt that the authorities assigned the reasons as required under section 127.

The assessee had been directing the transfer of huge sums of money from several bank accounts in Nagaland to his family’s businesses and his family members based in Kerala. The purpose of transferring the case was to facilitate revenue authorities in doing an effective and co-ordinate investigation and assessment. Cogent reasons had been assigned by revenue for transferring the case from Nagaland to Kerala.

Accordingly, the order passed by revenue to transfer the case could not have been interfered with. Writ appeal was devoid of merit, and the same was accordingly dismissed.

Case Review

• • Order dated 25-9-2019 passed in WP(C) 33(K)/2019, WP(C) 34(K)/2019, WP(C) 35(K)/2019, WP(C) 36(K)/2019, WP(C) 37(K)/2019, WP(C) 38(K)/2019 and WP(C) 39(K)/2019 (para 11) affirmed.

List of Cases Referred to

• • K.P. Mohammed Salim v. CIT [2008] 169 Taxman 465/300 ITR 302 (SC) (para 9).