The court upheld the validity of an administrative order transferring a tax case based on existing connections to other investigated parties, concluding that sufficient opportunity and reason for the transfer were provided without breaching natural justice.

JUDGMENT :

(G.S. Kulkarni, J.) :

1. The petitioner being aggrieved by an order dated 14 June, 2021 passed by respondent no. 1 under the provisions of Section 127 of the INCOME TAX ACT , 1961 (for short, “the Act”), by which the case of the petitioner was transferred from Commissioner of Income-tax (CIT), Mumbai to be centralized with “Central Circle – 20, Range-5, Principal Commissioner of Income Tax (Central) – 2, New Delhi” has filed the present proceedings under Article 226 of the Constitution of India. The substantive prayers as made in the petition are required to be noted which read thus:-

“a) Issue the writ in the nature of certiorari thereby quashing the show cause notice dated 19.03.2021 issued by CIT (IT), Mumbai – 4 under Section 127 of the Income Tax Act, 1961;

(b) Issue the writ in the nature of certiorari thereby quashing the order dated 14.06.2021 passed by CIT (IT), Mumbai – 4 u/s. 127 of the INCOME TAX ACT , 1961 thereby transferring and centralizing the case of the petitioner with Central Circle – 20 under Range – 5 of Pr. Commissioner of Income Tax (Central) – 2, New Delhi;

(c) Issue the writ in the nature of certiorari thereby quashing all the consequential proceedings initiated by the office of ACIT, Central Circle – 20 under Range – 5 of Pr. Commissioner of Income Tax (Central) – 2, Delhi.”

2. The relevant facts are :

The petitioner is a Non-Resident Indian (NRI), who is stated to be living in Dubai since 1992. The petitioner is also an Indian assessee having a Permanent Account Number (PAN) and is assessed to income-tax with the jurisdictional income tax officials at Mumbai.

3. The Income-tax department had carried out search proceedings involving the petitioner on 30 June 2019 at New Delhi. It appears that the petitioner had transactions with Indian citizens namely Mr. Ratul Puri, Gautam Khaitan, Sushen Mohan Gupta, Pankaj Jain and Sanjay Jain. Such persons were subjected to search and seizure, whose assessments were also centralized with the Central Circle at New Delhi. On such backdrop, a proposal was mooted on 30 July, 2020 by the Principal Commissioner, Income Tax (Central) New Delhi-respondent no.2 to centralize the petitioner’s case at New Delhi.

4. Accordingly, on 19 March 2021, a show cause notice was issued to the petitioner under subject “Centralization of the case with Central Circle-20, New Delhi …”. The notice recorded that search and seizure action was undertaken in the petitioner’s case on 30 June, 2019 by the DDIT (Inv.), Unit – 3(2), New Delhi. It further recorded that during the course of post search proceedings, a proposal for centralization of the petitioner’s case was forwarded to the Chief Commissioner of Income Tax (Central), New Delhi by the office of the Principal Director of Income Tax (Inv)-1, New Delhi and an approval to such proposal was granted on 12 March 2020. The notice further recorded that during the course of search/ survey proceedings, on related entities/parties and the pre-search and post-search investigations, it was noticed that the petitioner, an Indian citizen, based in Dubai, had multiple financial interests in India and abroad. It was stated that the investigations revealed petitioner’s involvement in evasion of taxes, abetment and facilitation of the evasion of taxes by various oth