Kamal Nath Vs PCIT (Calcutta High Court)
Whether an order for transfer of a case from one city to another is an administrative order or a quasi judicial order and also whether reasons are required to be recorded for passing such an order
In this high voltage case related to Ex-Chief Minister of Madhya Pradesh which was earlier dismissed on 6th January 2023 by Justice Shekhar Saraf, in an intra court appeal, the matter was argued by none other than Senior Advocate Dr Abhishek Manu Sanghvi and battery of lawyers as well as Solicitor general and Addl Solicitor general and others from this side. It was argued by Dr Sanghvi that the order of transfer was a quasi judicial order and proper reasons should have been recorded before passing the order. Moreover, it was also argued that coordinated investigation could not have been the ground for transfer.
In Global Energy the Hon’ble Division Bench of the Bombay High Court pointed out that coordinating investigation can always be a good ground for transfer from one place to another.
It is submitted that Chapter XIII of the Income Tax Act has four parts, Part (A) comprising of Sections 116 to Section 119A, Part (B) Section 120 to Section 128, Part (C) Section 131 to Section 136 and Part (D) Section 137 to Section 138. The assessee has no right to question the jurisdiction of an officer under Chapter XIII of the Act. It is further submitted that there is no allegation of mala fide and in the absence of any such allegation/ pleading, paragraph 10 of the judgment in Ajantha Industries would not be of assistance to the appellant.
Relying on the judgment of the Hon’ble Supreme Court in Ajantha Industries, it was pointed out that while transferring the case on the ground of coordinated investigation, some reason has to be given by the Commissioner which reveals why it is necessary to transfer the case for the purpose of coordinated investigation. The facts that emerge, shows there are sufficient reasons assigned in the order of transfer. The sufficiency or insufficiency of such reasons is beyond the pale of adjudication in the present litigation, lest it may prejudice the assessee.
However, Justice Sivagnanam brushed aside all the arguments by dealing with each of them and relying on the decision of the Constitution bench of Supreme Court in the case of Pannalal Binjraj and Kashiram Agarwala by holding that the transfer order was purely an administrative order though reasons are required to be recorded for transfer and once reasons are to be recorded, the writ court can be approached to challenge the transfer.
However, the challenge has to be limited to the decision making process and not the decision itself. The Court also dealt with the argument that there was an improvement in the show cause notice by tearing those arguments apart.
This decision will be a landmark case in relation to the challenge to transfer u/s 127.
