Nagindas Kasturchand And Bros Vs PCIT (Gujarat High Court)
Gujarat High Court has set aside an order issued by the Principal Commissioner of Income Tax (PCIT) that transferred a taxpayer’s case from Surendranagar to Ahmedabad, citing a failure to provide the assessee with an opportunity of hearing and to communicate the reasons for the transfer. The ruling in Nagindas Kasturchand And Bros Vs PCIT underscores the mandatory nature of procedural safeguards under Section 127(2) of the Income Tax Act, 1961.
The writ-applicant, Nagindas Kasturchand And Bros, a firm, had filed its income tax return for Assessment Year (AY) 2018-19, declaring a total income of Rs. 12,54,590. A survey under Section 133A of the Income Tax Act was conducted at the firm’s premises on February 4, 2019. Subsequently, the case was selected for compulsory scrutiny based on guidelines issued by the Central Board of Direct Taxes (CBDT), and a notice under Section 143(2) was issued by the Assistant Commissioner of Income Tax (ACIT), Surendranagar, on September 25, 2019.
The National E-Assessment Centre also issued a notice under Section 142(1) for AY 2018-19 on February 23, 2021, to which the firm responded on March 8, 2021. The core of the dispute arose when the firm received another notice under Section 142(1) on August 26, 2021, from the ACIT, Central Circle-2(3), Ahmedabad. This notice informed the firm that its case had been transferred to the Ahmedabad office as the Transferee Assessing Officer (AO) via an order passed under Section 127 of the Act.
