Existence of agreement between two jurisdictional Commissioners is a condition precedent for passing case transfer order U/s. 127(2)

Rent works India Private Limited Vs. Pr CIT (Bombay High Court)

In the present case, it is not even the case made out in the show cause notice that the agreement as contemplated by the first part of clause (a) of sub­section (2) of section 127 exists. The existence of such agreement between two jurisdictional Commissioners is a condition precedent for passing the order of transfer. Except for the request which came from the investigation office, Chennai of transferring the case, there is no reference whatsoever to any such agreement. Clause (b) of sub­section (2) of section 127 provides for consequences when there is no such agreement. When the jurisdiction to pass an order of transfer under clause (a) of sub­section (2) of Section 127 can be exercised only when there is such an agreement, the fact that such an agreement exists ought to have been stated in the the show cause notice as the same is a jurisdictional fact. Apart from the failure to mention the same in the show cause notice, the only stand of the revenue is that there is an agreement by implication. This stand is completely contrary to paragraph 5 of the decision of the Apex Court in the case of Noorul Islam Educational Trust (supra). The decision in the case of Ramswaroop (supra) will also bind this Court for the reasons stated above.

Coming to the decision in the case of Jharkhand Mukti Morcha, relevant facts are in paragraph 12. In the said case, specific reliance was placed on a document dated 27th November 2016. It is on the basis of the written document that a finding was recorded that there was an agreement between the Jurisdictional Commissioners of Ranchi and Delhi. In the present case, even going by the case made out by the respondent, no such agreement is spelt out. In absence of any such agreement, the first respondent had no jurisdiction to pass the order of transfer.

FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:-

1 On 19th September 2017, notice for final disposal at admission stage was issued. Accordingly, today, we have taken up the writ petition for final hearing. The Commissioner of Income Tax, Mumbai issued notice dated 18th April 2017 to the petitioner taking recourse to subsection 2 of Section 127 of the Income Tax Act, 1961 (for short `the Income Tax Act’). The petitioner assessee was put to notice that there is a proposal to transfer the case of the petitioner to DCIT, Central Circle­- 2(1), Chennai for proper co­ordinated investigation. There was a reply filed to the said show cause notice by the petitioner on 8th May 2017. The impugned order was made by the Principal Commissioner of Income Tax, Mumbai under sub­section 2 of section 127 of the Income Tax Act by which the case of the petitioner was transferred to DCIT, Central Circle- 2(1) at Chennai. It is this order which is subjected to a challenge in this writ petition under Articles 226 and 227 of the Constitution of India.

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