Case: Sanjay Gupta vs Union of India & Others
Bench: Hon’ble Justice Ferdino Inacio Rebello and Hon’ble Justice Vineet Saran
Petitioners: Sanjay Gupta and Kiran Gupta
Respondent: Union of India
Date: November 25, 2010
Citation: Civil Misc. (Writ) Petition No. 876 of 2010
Facts:
- The Petitioner 1 was resident of Kanpur and was carrying business there. He was assessed to income tax and sales tax at Kanpur, but his case transferred to Allahabad’s IT authority under Section 127 of Income Tax Act, 1995. He alleged that he has no business connection with anybody at Allahabad and nor any relatives lives there.
- The Petitioner 2 is the wife of Petitioner 1. She is a house wife and earns income only from the rent and share and does not carry on any business. She is also assessed at Kanpur and had no business connection with anyone at Allahabad and nor any relatives lives there.
- Respondent issued notice to the Petitioners asking them to raise objections, if any, against the transfer of assessment from Kanpur to Allahabad done by the Income Tax Department under Section 127 & 132 of the Income Tax Act, 1995.
Issue involved:
- Whether the transfer of case by the assessing officer to Allahabad was valid or not?
Obiter Dicta:
Statement given by Commissioner of income tax, Kanpur, given as under:-
“As per s. 153C of the I.T. Act, 1961 the assessing officer have proposed in the case that petitioner 1 and Sri Naveen Kesarwani, M.D. of M/s. Bhola Food Products Private Limited have close business as well as family connection. Since petitioner 2 is the wife of petitioner 1 so consolidation of her case is also required because without this proper assessment of petitioner 1 cannot be made.
This section provides that where search is conducted on a person and undisclosed assets indicating undisclosed income are found as belonging to “other person” other than, “searched person”, than in that case, proceedings u/s 153C would be undertaken against the other person.”
Rationale:
The power to transfer is stated under Section 127 of the Act which can only be exercised by the authority after the assessee is given an opportunity of being heard in the issue, and after recording reasons for doing so, cases can be transferred. In this case, the Respondent had given opportunity to the Petitioners to give their reply.
The reason given by the Respondents for exercising the powers is that a search operation was carried out in the premises of M/s. Bhola Food Products Pvt. Ltd. There is nothing to prove that from the search operations at the premises which belong to the Kesarwani Group, any material was seized, which would have any relations with the petitioners.
Taking assumptions that the Petitioners and Shri Naveen Kesarwani had business and family connections cannot be a ground for such transfer. No record has been shown to prove their family connections. As per the petitioner he was supplying the materials to M/s. Bhola Food Products Pvt. Ltd., belonging to Kesarwani Group like many other suppliers.
Only reason behind the transfer of case for synchronized investigation without any other specific reasons is not sufficient.
Judgement:
With these regards the court allows the petition and no order as to costs.
Conclusion:
The above mentioned case proves the validity of Section 127 of IT act, 1995. Petitioner 1 is a supplier of M/s. Bhola Food Products Pvt. Ltd. His assessment case of income and sales tax was transferred from Kanpur’s authority to the CIT of Allahabad. As per Section 127 of the act, the authority can transfer a case only if there is a reasonable ground.
Coordinated investigation and assessment without any other specific reasons is not sufficient. Moreover assuming the petitioners and Shri Naveen Kesarwani had business and family connections cannot be a ground for such transfer. Therefore court allowed the petitions.
Drafted By: Param Mansinghka
Edited By: Tanvi Mahajan, Publisher, Law Insider
Published On: February 18, 2022 at 22:00 IST
