INCOME TAX ACT, 1961

Section 127 Section 153A

Transfer of case - Order of stay by court - Limitation on 153A proceedings -

20 persons (assessees) were registered for Income Tax purpose with the Asstt. CIT. According to the IT Department, the searches were conducted between 25-10-2018 and 24-12-2018 and incriminating materials tending to show huge tax evasions were recovered. In South Tamil Nadu, the Madurai District has two Central Circles of the IT Department, under which, Tirunelveli District also falls. The Pr.CIT, Madurai, issued individual Notices, dated 28-1-2019 under section 127 to all the 20 assessees calling for objections, if any, for the proposal to transfer their assessments files, from Tirunelveli to Madurai. In response to the aforesaid notice, V.V. Minerals No.2 (one of assessees) addressed a letter dated 31-1-2019 to Pr. CIT asking for the relevant supporting documents to justify the transfer. Personal hearing was afforded to the assessees on 18-2-2019 at 4.30 p.m. The assessees took a stand that their Chartered Accountant is stationed at Tirunelveli and that he is 85 years old and therefore, it will cause hardship for them if their cases are transferred to Madurai. The Pr.CIT, Madurai, considered the objections and by Order, dated 19-2-2019, directed the transfer of the files of the 20 assessees from the Tirunelveli Circle to the Central Circle-2, Madurai. At the time of admission of W.P. (MD) No.16869 of 2019 : 2020 TaxPub(DT) 1501 (Mad-HC), a Single Judge of this Court granted stay of the Transfer Order, dated 19-2-2019 on 5-8-2019 and after a prolonged battle, the matter was heard finally and disposed of by another Single Judge of this Court vide Order, dated 28-2-2020, dismissing the writ petition and sustaining the transfer Order, dated 19-2-2019, assailing the correctness of which, the instant intra-Court appeal had been preferred by V.V. Minerals No.2. Court proceeded on the premise that out of the 20 persons referred to in the transfer Order, dated 19-2-2019 impugned in the writ petition, only V.V. Minerals No. 2 was before this court. When this intra-Court appeal came up for admission, a Divsiion Bench of this Court, vide Order, dated 16-3-2020, granted interim stay of the Order, dated 28-2-2020 passed by the Single Judge, till 30-3-2020. Held: In the case on hand, the show cause notice had spelt out the reasons for the proposed transfer of the cases. Whether the reasons so given were sufficient or insufficient, cannot be the subject-matter of judicial review. This is a case where the assessment files are being transferred from one city to a neighbouring city hardly 158 kms. away, in the same State. What inconvenience can this cause to V.V. Minerals No.2, especially when they have business and offices in several cities? AR made two fold submissions. According to him, firstly, the stay granted by the Court will bring to a halt, the running of limitation period and secondly, due to the COVID-19 pandemic, the Central Government itself had extended the limitation period upto 31-12-2020. V.V. Minerals No. 2 (assessee) had challenged only the transfer order, that too belatedly, and had obtained the order of stay and not the procedings under section 153A and, therefore, in the absence of stay of the proceedings under section 153A, the stay that has been granted in respect of transfer of proceedings will not save running of the period of limitation of the proceedings under section 153A. The instant intra-Court appeal therefore, fails and was accordingly, dismissed.

Distinguished:Mul Chand Malu v. UOI & Ors. W.P. (C) No.5828 of 2015 decided on 25-2-2016 : 2016 TaxPub(DT) 1747 (Gau-HC), Vijayasanthi Investments Pvt. Ltd. v. Chief CIT & Ors. (1991) 187 ITR 405 (AP-HC) : 1991 TaxPub(DT) 764 (AP-HC) and Chotanagpur Industrial Gases (P) Ltd. and Ors. v. CIT & Ors. (1998) 233 ITR 377 (Cal-HC) : 1998 TaxPub(DT) 0290 (Cal-HC).

REFERRED :

FAVOUR : Against the petitioner/assessee.

A.Y. :

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