IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION (Appellate Side)

Present: THE HON’BLE JUSTICE RAJARSHI BHARADWAJ W.P.A 28482 of 2024 Reserved on : 10.01.2025 Pronounced on: 29.01.2025 M/s. Kvell Properties Private Limited ...Petitioner -Vs-

The Principal Commissioner of Income Tax, Kolkata-9 & Ors.

...Respondents Present:-

Mr. Avra Mazumder Ms. Alisha Das Mr. Samrat Das Ms. Elina Dey Mr. Sourendra Nath Banerjee Mr. Alishan Hossain … for the petitioner Mr. Tilak Mitra … … for the State Rajarshi Bharadwaj, J:

1. The Petitioner preferers the present petition challenging the impugned

show cause notice dated February 23, 2024 that is in violation of the

principles of natural justice. The facts of the case in a nutshell are that on

September 5, 2023, Respondent No. 4 issued a summons under Section

131(1A) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"),

directing the Petitioner to provide documents related to its transactions with one Isprava Vesta (P) Ltd. and associated entities. The Petitioner, on September 7, 2023, submitted its books of accounts, bank statements, and relevant agreements.

2. On February 13, 2024, Respondent No. 1 issued a show cause notice under Section 127(1) of the Act, alleging that incriminating materials were found during search and survey operations conducted at the premises of entities related to the Isprava Group on June 12, 2023. The notice claimed that the Petitioner failed to account for the purchase of a 1671 sq. mt. plot, 'Alex 24K,' from one Fastgrowth Estates (P) Ltd. and made an unrecorded cash payment of ₹2.53 crores. Consequently, a transfer of jurisdiction over the Petitioner's PAN was proposed.

3. The Petitioner maintains that the transaction for the purchase of the said plot was duly recorded in its books of accounts and the conveyance deed, with the purchase price aligning with the circle value for stamp duty purposes. The allegation of unaccounted cash payments was denied as baseless.

4. The Petitioner raised objections to the proposed transfer through letters dated February 27, 2024 and October 9, 2024, requesting Respondent No. 1 to disclose evidence supporting the allegations. Despite repeated requests, Respondent No. 1 failed to provide any such evidence.

5. Respondent No. 1, in the impugned order dated October 18, 2024, stated that the Petitioner failed to appear for a hearing on October 14, 2024. However, the Petitioner had informed Respondent No. 1 via a letter dated October 9, 2024, that it received insufficient notice due to the Durga Puja holidays. A request for an extension and rescheduling was made but was disregarded, depriving the Petitioner of a fair opportunity to represent its case. 6. The impugned order failed to address the Petitioner's objections, cited vague and unsubstantiated reasons for the transfer and lacked compliance with procedural requirements, including agreement between jurisdictional Principal Commissioners herein Respondent no. 1.

7. The Learned Counsel appearing for the Petitioner submits that the purchase of the 1671 sq. mt. plot was duly recorded in its accounts and supported by the conveyance deed, which aligns with the circle value. The allegation of unaccounted cash payment is unsubstantiated and cannot form the basis for the proposed jurisdictional transfer.

8. Respondent No. 1 has failed to disclose any incriminating material or evidence justifying the allegations against the Petitioner, despite repeated requests. The absence of credible evidence renders the allegations speculative and unsustainable.

9. The Petitioner was denied a reasonable opportunity to respond to the allegations due to insufficient notice and the failure of Respondent No. 1 to reschedule the hearing. This constitutes a gross violation of the principles of natural justice and procedural safeguards under Section 127 of the Act.

10. The impugned order lacks cogent reasoning and fails to address the objections raised by the Petitioner. The vague reference to "incr