Kamal Varandmal Galani Vs PCIT (Bombay High Court)
The petitioner challenged the order dated 21 November 2022 passed under Section 127 of the Income Tax Act, 1961, transferring his assessment jurisdiction from the Deputy Commissioner of Income Tax-19(3), Mumbai to the Deputy Commissioner of Income Tax, Central Circle-3, Jaipur. The transfer was proposed to facilitate coordinated assessment with the Veto Group, Jaipur, in respect of which search proceedings under Section 132 had been conducted. The petitioner stated that he had been filing his income tax returns in Mumbai for the last 22 years, including the return for Assessment Year 2021-22.
A show cause notice dated 24 June 2022 informed the petitioner that the Principal Commissioner of Income Tax (Central), Rajasthan had proposed centralization of his case with the Veto Group at Jaipur to enable coordinated assessment. The petitioner was invited to submit objections. Section 127 requires recording of reasons and providing the assessee a reasonable opportunity of being heard before transferring a case. Where the assessing officers are not subordinate to the same authority, the provision also requires agreement between the concerned authorities before passing the transfer order.
The petitioner objected to the proposed transfer, contending that there was no material connecting him with the Veto Group. He stated that no search under Section 132 had been conducted at his premises. Although a survey under Section 133A had been carried out at Landmark Hospitality Pvt. Ltd., where he was a director, no incriminating material was found during the survey. He further submitted that the show cause notice did not disclose any material collected against him that could justify transfer of jurisdiction.
