Arise Investments and Capital Private Limited Vs PCIT (Madras High Court)
Madras High Court has dismissed a writ petition filed by Arise Investments and Capital Private Limited, upholding the Income Tax Department’s decision to transfer the company’s assessment file from Coimbatore to the Central Circle in Kolkata. The transfer, ordered under Section 127 of the Income Tax Act, 1961, was aimed at centralizing the petitioner’s case for “effective and co-ordinated investigation” following a search and seizure operation.
Arise Investments, based in Coimbatore, challenged the transfer order, primarily arguing that it was passed without affording them a personal hearing, thereby violating principles of natural justice. The company also highlighted the inconvenience and increased costs of litigation due to the transfer to Kolkata, a city where they claimed to have no business activities.
The Income Tax Department, represented by the Principal Commissioner of Income Tax (Central), Chennai, countered that a show-cause notice was issued to Arise Investments on April 9, 2024, detailing the reasons for the proposed transfer. The notice informed the petitioner that a search and seizure operation on October 12, 2023, by the Principal Director of Income Tax (Investigation), Kolkata, had unearthed incriminating documents connected to the petitioner’s assessment. These documents indicated the petitioner’s involvement in the lottery business in West Bengal and other states. The Department asserted that considering the petitioner’s written reply dated April 17, 2024, satisfied the requirement of natural justice.
