A.K. Yog , Dilip Gupta, JJ. - (1.) THIS petition has been filed for quashing the order dated 20^th December, 2005 passed by the Commissioner of Income Tax -II, Kanpur under Section 127 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act').
(2.) THIS is the third petition filed by the petitioners for challenging the orders passed under Section 127 of the Act, The first petition was filed for quashing the order dated 18^th June, ,2004 passed by the Commissioner of Income Tax -II, Kanpur under Section 127(2) of the Act transferring the cases mentioned in the order from Assessing Officers at Kanpur to the Assessing Officers at Mumbai by filing writ petition No. 1 120 of 2004 which was allowed by the judgment and order dated 7.4.2005 but it was left open to the Commissioner to pass a fresh order in accordance with law. The relevant portion of the order is quoted below: On perusal of the aforementioned order we find that no reasons whatsoever has been mentioned in the order transferring the cases. This Court in the case of Vinay Kumar Jaiswal and Ors. v. : [1996]221ITR568(All) while dealing with the mater relating to the transfer of the case under Section 127 of the Act has held as follows: It is obvious that when certain factual allegations are made in the objections of the assessee. they have to be dealt with, otherwise the very purpose of hearing would be frustrated. In their objections, the petitioners had specifically mentioned that all the concerns of the family barring a few which were recently established are being assessed at Kanpur and they were paying a good amount of tax in Kanpur. They have also mentioned that the accounts of all the concerns of the family are maintained at Kanpur and only manufacturing and trading activities are conducted at Bhilai. Hence it was incumbent upon the Commissioner of Income Tax to deal with the said averments which he has not done in the impugned order and for this reason also the impugned order has been vitiated. Since in the present case no reasons have been recorded and there is no other order on record passed by Commissioner of Income Tax, we are of the considered opinion that the said order can not be sustained and is, therefore, set aside on the ground that the various objections raised by the Petitioners have not been dealt with in the transfer order. ... In view of the foregoing discussions, we set aside the order dated 18.06.2004 leaving it open to the Commissioner of Income -tax -II, Kanpur to pass a fresh order in accordance with law. Pursuant to the aforesaid directions issued by this Court, a notice dated 12.8.2005 was issued by the Commissioner of Income Tax to the petitioners to which written objections dated 26.8.2005 were filed containing reasons for not transferring the records of the cases from Kanpur to Mumbai. The Commissioner of Income -Tax -II, Kanpur then passed the order dated 6.9.2005 under Section 127(2) of the Act transferring the cases from the Assessing Officers at Kanpur to the Assessing Officers at Mumbai. This order was challenged by the petitioners by filing Writ Petition No. 1371 of 2005 which was heard by us on 18^th October, 2005. We allowed the petition and set -aside the order dated 6^th September, 2005 but left it open to the Commissioner to pass a fresh order in accordance with law. The relevant portion of the order is as follows: A perusal of the judgment and order dated 7.4.2005 passed by this Court in Writ Petition No. 1120 of 2004 clearly shows that the earlier order dated 18.6.2004 in respect of the present petitioners was set aside on the ground that the various objections raised by the petitioners had not been dealt with in the order. In making he aforesaid observations, the Court placed reliance upon the observations made by this Court in the ease of Vinay Kumar Jaiswal and Ors. v. : [1996]221ITR568(All) . We find that the order impugned in the present petition suffers from the same defect inasmuch as the objections dated 26.8.2005 filed by the petitioners, a copy of which has been annexed as Annexure '7' to the writ petition, have not been considered at all and only a bald statement has been made in the impugned order that the objections were not tenable. It may be pointed out that in their objections the petitioners had raised a number of grounds including the grounds that the statement contained in the notice regarding most of the cases of the group being assessed at Mumbai was factually incorrect and the main cases of Pradeep Kumar Bansal (petitioner No. 3) and M/s Bansal Sharevest Services Ltd. (petitioner No. 1) were being assessed at Kanpur since more than last ten years and that the Tax Consultant of the Chartered Accountant of the assesses were at Kanpur. It was further objected that if at all the group cases were to be assessed at one place for coordinated investigation, then they should be centralized at Kanpur. These objections have not been considered in the impugned order and a vague statement has been made that since other cases of this group had been centralized at Mumbai, it is necessary to centralize the said three cases at Mumbai so that coordinated and meaningful investigation could be done. Even the details of the cases, which had been earlier centralized, have not given in the impugned order. The observations made by this Court in the judgment and order dated 7.4.2005 in Writ Petition No. 1120 of 2004 have, therefore, not been complied with. Such being the position, the impugned order dated 6.9.2005 (Annexure '1' to the writ petition) cannot be sustained and is liable to be set aside.
(3.) THEREAFTER a fresh notice dated 12^th December, 2005 was issued by the Commissioner of Income Tax to the petitioners inviting objections to the proposed transfer of the cases to Mumbai. The petitioners filed their objections. The Commissioner of Income Tax -II, Kanpur passed a detailed order dated 20^th December, 2005 under Section 127 of the Act and the relevant portion of the Order is quoted below : The Hon'ble Allahabad High Court vide order dated 18.10.2005 has again set aside the order dated 6.9.2005 with the direction to pass a fresh order in accordance with law. These cases were again fixed for hearing as per this office letters dated 12.12.2005. The similar objections have been filed by the assessees. The main objection is that it will create inconvenience to the assessees if the cases are transferred and centralized at Mumbai. These objections are also not convincing looking to facts that Shri Pradeep Kumar Bansal, director and key person of the group, has residence cum business premises at 1502/1503 and 1506 Safalya Tara Baug, Love lane, Byculla, Mumbai. In addition, he has business at Kolkata, Bhuj, Raj Kot, Banglore, Mathura, New Delhi and Haridwar. The case of Shri Rajendra Prasad Bansal, 1175, Hara Pathak, Manik Chowk, Mathura, a case belonging to this group, has also been transferred and centralised at Mumbai from Mathura vide order dated 3.3.2004 of the Commissioner of Income Tax -I, Agra. Another case of this group namely Shri Rajeev Bansal assessed at Kanpur with Renge -I, Kanpur (under jurisdiction of Commissioner of Income Tax -I, Kanpur) is also in process for centralising at Mumbai. In the search conducted on 26.7.2003, material has been found indicating large scale transactions in shares out side the Stock Exchanges. Seized papers also show that assessees have been indulging in accommodation entries for financing share applications/gifts. Cash has been deposited in a number of bank branches and cheques have been issued immediately afterwards for share applications/gifts. There are several gift deeds in favour of persons who have no business activities in Mumbai and prima -facie it was found that these are accommodation entries and not bona fide gifts as claimed by the assessees. There are huge transactions in the names of various parties who have to business in Mumbai. At Mumbai, the SEBI team perused the Sauda sheets at the Masjid Bunder Office of Mr. Rajeev Bansal, another case of this group, and found certain transactions which are not matching with NSE trade details. This indicates that transactions have been carried out out -side the systems of exchange and also out -side the regular books of accounts. The statements of accounts obtained from the banks during the course of investigation reveal deposits of huge cash in bank, accounts of various assessees of this group. Looking to these, facts I find that these are fit cases to be centralised at Mumbai. In view of the above and in exercise of the powers conferred by Sub -section (2) of Section 127 of the Income Tax Act (43 of 1996), Section 11 of the Wealth Tax Act 1975 and all other powers enabling, me in this behalf, I, the Commissioner of Income Tax -II, Kanpur hereby transfer the cases, particulars of which are mentioned hereunder in Col. 3, from the Assessing Officer mentioned in Col.5 therein to the Assessing Officer mentioned in Col.6: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Sl.No. PAN Name of the assessee Status From To - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1. 2. 3. 4. 5. 6. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1. AAACB7738B M/s Bansal Sharevest Co. ACIT -IV ACIT Services Ltd. Kanpur CC -VII Mumbai - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2. ABRPB8429L Shri Pradeep Kumar Indl. ACIT -IV ACIT Bansal Kanpur CC -VIII Mumbai - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3. - - - - - - - - Shri Sonu Agarwal Indl. ACIT -IV ACIT Kanpur CC -VIII Mumbai - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -;