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Dilip Kumar Agarwal and Krishna Kumar Agarwal Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKolkata High Court
Decided On
Case NumberWrit Petition Nos. 200 and 201 of 2009
Judge
Reported in[2009]314ITR291(Cal)
ActsIncome Tax Act, 1961 - Sections 44AB, 127 and 127(2)
AppellantDilip Kumar Agarwal and Krishna Kumar Agarwal
RespondentCommissioner of Income-tax
Appellant AdvocateJ.P. Khaitan and ;A. Banerjee, Advs.
Respondent AdvocateP.K. Bhowmik and ;P. Dhudhoria, Advs.
Cases ReferredP.S. Housing Finance P. Ltd. v. Union of India
Excerpt:
- .....of income-tax, kolkata-xv, kolkata, respondent no. 1 directing transfer of the cases of dilip kumar agarwal and krishna kumar agarwal, the petitioners from income-tax officer, ward no. 44(1), kolkata and the income-tax officer, ward no. 43(3), kolkata, respectively, to the acit/dcit, central circle-ill, patna, in exercise of the powers conferred under sub-section (2)(a) of section 127 of the income-tax act, 1961 (in short 'the act').4. it is submitted by mr. khaitan, learned senior advocate appearing on behalf of the petitioners that though pursuant to the notices dated january 15, 2009, proposing transfer, the petitioners by letters furnished on january 27, 2009, had filed detailed objections, those have not been considered. though simultaneous searches were not conducted as.....
Judgment:

Soumitra Pal, J.

1. The court : Let affidavits of service filed in court today be kept with the records.

2. Since the orders impugned and issues involved are common, the two writ petitions have been heard analogously. However, for the sake of convenience I shall deal with the facts in W.P. No. 200 of 2009 (Dilip Kumar Agarwal).

3. In these petitions the petitioners have challenged the order dated February 11, 2009, passed by the Commissioner of Income-tax, Kolkata-XV, Kolkata, respondent No. 1 directing transfer of the cases of Dilip Kumar Agarwal and Krishna Kumar Agarwal, the petitioners from Income-tax Officer, Ward No. 44(1), Kolkata and the Income-tax Officer, Ward No. 43(3), Kolkata, respectively, to the ACIT/DCIT, Central Circle-Ill, Patna, in exercise of the powers conferred under Sub-section (2)(a) of Section 127 of the Income-tax Act, 1961 (in short 'the Act').

4. It is submitted by Mr. Khaitan, learned senior advocate appearing on behalf of the petitioners that though pursuant to the notices dated January 15, 2009, proposing transfer, the petitioners by letters furnished on January 27, 2009, had filed detailed objections, those have not been considered. Though simultaneous searches were not conducted as evident from the panchnama, yet transfers have been directed on the said basis. Since no material or evidence has been produced by the respondents to support the view that the petitioners have business connection with their father, the stand taken in the order impugned is unjust. Moreover, since positive statements in the written objection stating that the petitioners have no business connection with Ratanlal Agarwal, their father, have not been dealt with, the impugned order is bad. The learned senior advocate referred to the judgments in R.K. Agarwal v. CIT reported in : [2006] 283 ITR 532 (All) and in P.S. Housing Finance P. Ltd. v. Union of India reported in [2007] 290 ITR 316 (Cal) in support of his submission.

5. Mr. Bhowmik, learned advocate appearing on behalf of the respondents, supporting the impugned action submitted that since it is all in the family and transfer is for co-ordinated investigation, the order is just and proper. In support of his submission, he has relied on the judgments in Virender Kumar Jain v. CIT reported in : [2006] 283 ITR 541 (All) and in Bal Chand Purohit v. CIT reported in : [2006] 286 ITR 423 (Cal).

6. In order to decide the issue it is necessary to refer to the notice dated January 15, 2009, proposing transfer issued by the Income-tax Officer (Technical), Kolkata-XV, respondent No. 2, the relevant portion of which is as under:.In connection with search and seizure operation against Ratan Lal Agarwal group of cases, the jurisdiction of income-tax in your case is proposed to be centralized with DCIT/ACIT Central Circle-3, Patna.

In this connection, you are requested to appear before the Commissioner of Income-tax, Kolkata-XV, on January 27, 2009, at 12.15 p.m. either by person or by representative duly authorized. Your reply should reach this office within January 27, 2009, otherwise it is assumed that you have no objection for this centralization.

7. Pursuant to the said notice on January 27, 2009, Dilip Kumar Agarwal, the petitioner had furnished a reply, the relevant portion of which is as under:

Ref. : Dilip Kumar Agarwal.

PAN No. ACQPA6138H

Sub. : Proceedings for transfer of jurisdiction of I. T. records.

(1) That apart from the relation that I am son of Sri Ratan Lal Agarwal, I had and have no business or other connection with him.

(2) That I permanently reside at 42, Dobson Road, Howrah, along with my wife Smt. Kiran Devi Agarwal (aged about 39 years) my daughter Miss. Pinky Agarwal (aged about 18 years) and my son master Ayush Agarwal (aged about 16 years), my wife is a housewife and my daughter is a student of class XII reading in St. John's School, Howrah. My son Ayush is reading in class XI and student of Assembly of God Church, Park Street, Kolkata.

(3) That I enclose herewith ration card of me and my family members. Xerox of fee books of my son and daughter, which shows that I am a permanent resident of Howrah.

(4) That I have one and only business at Kolkata since last 16 years. Doing my business by the firm name of M/s. Bhagwati Steels of which I am the proprietor having its office at 18/1, M.D. Road, Kolkata. My firm is registered with various authorities at Kolkata, e.g., VAT authorities, shop and establishments authorities, etc. I am enclosing herewith copy of trade licence, VAT registration certificate, shop and establishment registration certificate, etc., which shows my permanent business establishment at Kolkata.

(5) That I have never carried on any business at any place in the State of Bihar.

(6) That I am the only person to look after my business.

(7) That I am the only person to look after my family as my wife is home-maker and both kids are minor and students.

(8) That I have no business link with my father Sri Ratan Lal Agarwal and my other brothers.

(9) That I am completely separate from my father and brothers in business, in place, in living too.

(10) That search and survey report will speak that I had no relation either business or otherwise with Ratanlal Agarwal group of cases.

(11) That I am a most petty and small dealer living my life with small means and the papers seized or impounded at my business place also speaks the facts of my smallness.

(12) That I am regularly assessed to Income-tax at Kolkata in the Range 44/Kolkata.

(13) That my firm M/s. Bhagwati Steels is regularly audited under Section 44AB of the Income-tax Act, 1961, at Kolkata.

(14) That I am suffering from ill-health and that merely because I am son of Ratanlal Agarwal I should not be penalised or punished for no fault of mine.

(15) That I shall have a great trouble, inconveniences and harassment if my I.T. case is transferred to Patna.

(16) That I shall be ever ready to comply all the notices/summons issued by DCIT/ACIT Central Circle-3 PATNA.

In the circumstances, I most respectfully submit and humbly request and pray that I should not be tagged with the case of Ratanlal Agarwal as neither I am connected with his business in any way nor the paper seized from my place are connected with Sri Ratan Lal Agarwal and consequently no co-ordinate investigation will be required.

8. After the written reply was furnished, in accordance with the provisions contained in Section 127 of the Act, the petitioners were heard and the reasoned order was passed directing transfer of the files from Calcutta to Patna. The relevant portion of the reasoned order, which is under challenge, is as under:.Shri Dilip Kumar Agarwal filed his objection against the proposed centralization mainly on the ground that though he is a son of Shri Ratan Lal Agarwal, he has no connection with his father, he lives separately at Howrah and runs his business in Kolkata and his children are students of schools at Kolkata and Howrah and also due to his ill-health.

Shri Krishna Kumar Agarwal also filed his objection. He stated that he has no connection with his father and the proposed transfer would inconvenience him. It is observed that his residence and also his business is in Dalkhola, Uttar Dinajpur, West Bengal which appears to be more nearer to Patna, than to Kolkata. I have carefully considered the objection of Sri Dilip Kumar Agarwal and Sri Krishna Kumar Agarwal. The objection is mainly on the ground that they are not connected with their father and the proposed transfer would inconvenience them. Both are sons of Sri Ratan Lal Agarwal and they belong to the Ratan Lal Agarwal group as simultaneous searches was carried out in their premises also. The request for centralization was made after it was found that these two assessees are connected with Sri Ratan Lal Agarwal and their files needs to be centralized for coordinated investigation and assessments. Both Ratan Lal Agarwal and Pawan Kumar Agarwal have no objection to the centralization. No material evidence was produced to support the objection of the other two sons that they are not connected with their father. The simultaneous search only proves the connection and not otherwise. Therefore, I am not convinced regarding their objection on this point.

The plea of inconvenience is also not convincing. These assessees are represented by authorized representatives and eminent professionals are available both in Kolkata and Patna. In view of this transfer of files from Kolkata to Patna will not inconvenience these two assessees in any manner and, therefore, I consider their objection on this point also as devoid of any merit.

The objection of the two assessees are to be weighed against the interest of the Revenue. In this group cash worth Rs. 1.59 crores have been seized and the assessee disclosed Rs. 1.25 crores. The case of this magnitude needs to be investigated by the Central Circle at Patna who have expertise to deal with such cases. The need for centralization is imperative for impartial assessment of the case.

The two main assessees, viz., Ratan Lal Agarwal and Pawan Kumar Agarwal have no objection to the proposed centralization. The objection of Sri Dilip Kumar Agarwal and Sri Krishna Kumar Agarwal are devoid of any merit as discussed above. The objection are rejected and the following order is, therefore passed.

In exercise of the power conferred by Sub-section (2)(a) of Section 127 of the Income-tax Act, 1961, and all other power enabling me in this behalf, I, the Commissioner of Income-tax, Kolkata-XV, Kolkata, hereby transfer the following case the particulars of which are mentioned in columns (2) and (3) below from the Assessing Officer mentioned in column (4) and to the Assessing Officer as shown in column (5) thereof for centralization of Sri Ratan Lal Agarwal group of cases for co-ordinated investigation and assessment. This order shall take immediate effect.

Commissioner of Income-tax,

Kolkata-XV, Kolkata.

(emphasis supplied)

9. It appears that though it has been submitted on behalf of the respondents that the transfer is for the purpose of co-ordinated and effective investigation, the notices proposing transfer do not say so. From the notices, I find that transfer as proposed was for the purpose of centralization. Though the petitioners have made categorical statements in their representations that they have no business connection with their father, have no business at any place in Bihar, they manage their businesses on their own and have no business link with Ratanlal Agarwal, their father, and have no relation either in the business or otherwise in the Ratanlal Agarwal group of companies-those have not been considered at all as evident from the order impugned. It is surprising, as evident from the impugned order, that the onus has been put on the petitioners to produce material evidence that they are not connected with their father. Rather had the respondents any evidence in support of their case they should have furnished the same. As evident from the law laid down in R.K. Agarwal : [2006] 283 ITR 532 (All) mere family connection cannot be a ground for transfer. Since, as discussed, the authority has been unable to rebut the categorical statements made in the written objections, the law laid down in the judgment in Virender Kumar Jain : [2006] 283 ITR 541 (All) is not applicable to the facts of the case. Therefore, as the order impugned does not disclose any nexus of the petitioners with Ratanlal Agarwal or the Ratanlal group of companies, the order dated February 11, 2009, is without merit. Hence, the order dated February 11, 2009, cannot be sustained and is, thus, set aside and quashed. The writ petitions are, therefore, allowed. However, this order will not prevent the respondents from issuing a fresh order of transfer under Section 127 of the Act transferring the case of the petitioners from Kolkata to Patna in the event of real nexus on the basis of articles and documents found in the course of search which are already on record.

10. Since the writ petition is disposed of at the stage of admission without calling for affidavits, the allegations made in the writ petition are deemed not to have been admitted by the respondents.

11. No order as to costs.

12. Urgent photostat certified copy of this order, if applied for, be furnished to the appearing parties on priority basis.


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