Akshara Enterprises Private Limited Vs PCIT (Telangana High Court)
The Telangana High Court dismissed the writ petition challenging an order passed under Section 127 of the Income Tax Act, 1961, transferring the petitioner’s assessment proceedings from Hyderabad to Mumbai, along with a consequential notice issued under Section 142(1) of the Act. The petitioner, a private limited company engaged in Information Technology and Information Technology Enabled Services, contended that the transfer order was without jurisdiction, arbitrary, lacking reasons, and violative of principles of natural justice.
The dispute arose after search and seizure proceedings were conducted against a Mumbai-based group. During those proceedings, certain materials relating to another group based in New Delhi were discovered. Subsequent search proceedings involving that group allegedly revealed transactions with the petitioner. Thereafter, a survey was conducted at the petitioner’s establishment, during which certain cash transactions between the petitioner and entities of the New Delhi group appeared to have been identified. Based on these circumstances, a proposal was made to transfer the petitioner’s case from Hyderabad to Mumbai to facilitate coordinated investigation and finalization of assessments.
The petitioner challenged the transfer on multiple grounds. It was argued that the transfer order had been passed mechanically and without proper application of mind. The petitioner further contended that the order lacked jurisdiction because there was no indication of agreement between the concerned authorities as required under Section 127. It was also submitted that the transfer was based solely on the petitioner’s commercial transactions with the New Delhi group and that there was no allegation that such transactions were illegal or contrary to law. According to the petitioner, no search and seizure proceedings had been conducted at its premises, and therefore the transfer was unjustified.
