LORDS DISTILLERY LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner No. 1 is a registered company having its registered office in Kolkata and the petitioner No. 2 is one of its directors. It is stated that the respondent No. 1 on 14th Nov., 2006 had served a notice under Section 127 of the IT Act, 1961 (for short the Act), intimating about the proposed transfer of the case under Section 127 of the Act for the reasons enumerated therein and had invited objections. The petitioner company filed a written objection. An opportunity of hearing was granted by the CIT, Kolkata -IV, the respondent No. 1. Thereafter, in exercise of powers under Section 127(1)/(2) of the Act on 30th Nov., 2006, order was passed transferring the case of the petitioners from Asstt. CIT, Circle -XI, Kolkata, to Dy. CIT, Central Circle, XIX, New Delhi. The said order of transfer is the subject -matter of challenge.

(2.) THE grievance of the petitioners is that the notice proposing transfer was general in nature, vague and ambiguous, was issued mechanically and without any application of mind and, thus, there was no cogent reason for transfer. Further, while passing the order the respondent No. 1 had acted arbitrarily in ignoring the written objection and the books of account.

(3.) IT is not in dispute that a notice for transfer of the case of the petitioner was issued. Thereafter, hearing was granted and the impugned order was passed. The first issue is whether the notice discloses sufficient reason for transfer and secondly, whether the impugned order deals with the written objection filed by the petitioner. In order to address the issues, it is necessary to set out the notice dt. 14th Nov., 2006, proposing transfer which is as under: Dt. 14th Nov., 2006. Sub. : Transfer of jurisdiction over your case to Dy. CIT Central Circle -19, New Delhi. Sir, CIT, Central -Ill, New Delhi, has proposed centralization of your case with Dy. CIT, Central Circle -19, New Delhi, for conducting co -ordinated investigation in connection with the search undertaken against Radico Khaitan Ltd. and other associated cases on 14th Feb., 2006. You are requested to submit your objection, if any, either personally or through your Authorised Representative, in my office on 23rd Nov., 2006 at 12.00O' clock.... (Emphasis, italicised in print supplied) In reply, the petitioner filed the written objection, the relevant portion of which is as under: Sub : Transfer of jurisdiction from Kolkata to New Delhi. Sir, In response your letter dt. 14th Nov., 2006, we are submitting following objection regarding transfer of jurisdiction from Kolkata to New Delhi: 1. The aforesaid limited company is registered with West Bengal Registrar of Companies on 10th day of September, 1974, and from the beginning, all the ROC related work are done from Kolkata office. 2. Since the date of incorporation the company is filing the income -tax return before the jurisdiction of Kolkata West Bengal, and accordingly the assessment was completed by the AO. 3. It is very important to mention that the scrutiny proceeding for the financial year 2003 -04 relevant to asst. yr. 2004 -05 is undergoing before the Asstt. CIT and it is a time -bar assessment. 4. Finalization of the accounts of the company are completed from the office of Kolkata.