IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

****

WRIT PETITION No.22111 of 2022

Between:-

Vijay Nathulal Sharma,

S/o.Nathulal Sharma, Occ:Nil,

Aged about 75 Years,

R/o.Indian Inhabitant 83-A, Anita Building

8

th

Floor, Mt.Pleasant Road, Malabar Hill,

Mumbai, Maharashtra – 400006. --- Petitioner

And

1. Deputy Commissioner of Income Tax,

Central Circle-I, Guntur,

Lakshmipuram Main Road, Guntur,

Andhra Pradesh – 522006.

2. Union of India,

Represented by its Secretary,

Ministry of Finance, North Block,

New Delhi – 110001. --- Respondents

DATE OF ORDER PRONOUNCED : 21.10.2022

SUBMITTED FOR APPROVAL :

2

HON'BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

HON'BLE JUSTICE Dr.V.R.K.KRUPA SAGAR

1. Whether Reporters of Local Newspapers

may be allowed to see the order? Yes/No

2. Whether the copy of order may be

marked to Law Reporters/Journals? Yes/No

3. Whether Their Lordships wish to

see the fair copy of the order? Yes/No

_________________________

C.PRAVEEN KUMAR , J

____________________________

Dr.V.R.K.KRUPA SAGAR , J

3

* HON'BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

* HON'BLE JUSTICE Dr.V.R.K.KRUPA SAGAR

+ WRIT PETITION No.22111 OF 2022

% 21.10.2022

# Between:

Vijay Nathulal Sharma,

S/o.Nathulal Sharma, Occ:Nil,

Aged about 75 Years,

R/o.Indian Inhabitant 83-A, Anita Building

8

th

Floor, Mt.Pleasant Road, Malabar Hill,

Mumbai, Maharashtra – 400006. --- Petitioner.

And

1. Deputy Commissioner of Income Tax,

Central Circle-I, Guntur,

Lakshmipuram Main Road, Guntur,

Andhra Pradesh – 522006.

2. Union of India,

Represented by its Secretary,

Ministry of Finance, North Block,

New Delhi – 110001. --- Respondents.

! Counsel for the Petitioner : Sri Nerella S V Raviteja

^ Counsel for Respondent No.1 : Ms.M.Kiranmayee

(Senior Standing Counsel for

1

st

Respondent Income Tax

Department)

< Gist:

> Head Note:

? Cases referred:

1. [2014] 52 taxmann.com 220

2. [2021] taxmann.com 177 (Orissa)

3. (2020) 4 SCC 581

4. [2013] 36 taxmann.com (SC)

This Court made the following:

4

THE HON’BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

THE HON’BLE JUSTICE Dr.V.R.K.KRUPA SAGAR

WRIT PETITION NO. 22111 OF 2022

ORDER: (Per Hon’ble Justice Dr.V.R.K.Krupa Sagar)

An assessee filed this writ petition under Article 226 of the

Constitution of India, seeking for a Writ of Mandamus or other direction

seeking to declare the action of the Respondent No.1/Deputy

Commissioner of Income Tax, Central Circle -1, Guntur of Andhra

Pradesh in issuing impugned Orders dated 27.03.2022 and 11.03.2022,

demand notices dated 27.03.2022 and 11.03.2022 and notice under

Section 274 r/w. Section 271(1)(c) dated 27.03.2022 as illegal, arbitrary

and violative of Article 14 and Article 21 of the Constitution of India and

consequently direct the respondent authorities to decide the

proceedings in accordance with law under the Income Tax Act.

02. Having found that cash receipts by writ petitioner amounting to

Rs.3,05,00,000/- were not reflected in his books of account, after notice

under Section 142(1) of the Income Tax Act, Respondent No.1 passed

the impugned orders of assessment. In this writ petition, the challenge

is on the assessment orders as well as demand notices and penalty

notices, passed by respondent No.1 for the assessment yea rs 2013-

2014 to 2020-2021.

5

03. This court has heard the submissions of Mr.Nerella S.V.Raviteja.,

learned counsel for the writ petitioner and Ms.M.Kiranmayee., Learned

Senior Standing Counsel for Respondent No.1 Income Tax department.

04. From the record and from the submissions of learned counsels on

both sides a few undisputed facts need a mention. The writ petitioner is

an individual income tax assessee having Pan: No.AGPPS8124-A. He is

aged about 75 Years and is a resident of Mumbai of State of

Maharastha. He was regularly filing income tax returns at Mumbai with

Assessing Officer Ward 19 (1)(3) at Mumbai. His main source of income

is from investments under other income heads and claims to have never

been involved in any business. An immovable property at Lancherster

Road, Guntur City of Andhra Pradesh is his ancestral property in which

he had 1/6

th

share. He along with his family members/Sharma Group

sold their respective shares in that property under a registered sale

deed dated 24.07.2012 in which the petitioner, towards his share, got

the sale consideration of Rs.2,10,00,000/-. The purchaser of the

property was M/s.Bharathi Castles Private Limited represented by its

Director Sri Polisetty Somasundaram of Guntur City. While so, on

28.01.2020 at Guntur, a search and seizure operation was conducted

by the Income Tax Authorities against M/s. Polisetty Somasundaram

Group in terms of Section 132 of Income Tax Act 1961. During that

search and seizure operation a pen-drive was recovered and copies of its

6

contents were recovered. The Income Tax Authorities found various

unaccounted cash transactions between M/s.Polisetty Somasundaram

Group and this writ petitioner. According to the authorities that

material includes cash receipts of the financial year 2012 to 2013

relevant A.Y-2013-2014 to a tune of Rs.3,05,00,000/-. It is in that

context of facts the case was centralised with DCIT, Central Circle-1,

Guntur by virtue of Orders passed by Principle Commissioner of Income

Tax, Vijayawada in F.No.127/Pr.CIT/VJA/2020-21 dated 16.02.2021.

That Order was made under Section 127 of Income Tax Act. Thereafter

the authorities proceeded under Section 153C and assessments were

completed for the years 2013-2014 to 2020-2021 under Section 153C of

Income Tax Act.

05. It is in the back drop of the above facts, the controversy has

arisen between the assessee and the Revenue. Learned Counsel for the

writ petitioner submits certain prime contentions and subsidiary

contentions. Learned standing counsel for the Revenue/Respondents

refuted the correctness and efficacy of such contentions.

06. The prime contentions raised for the writ petitioner are that the

writ petitioner being an assessee at Mumbai, transfer of a case as

provided under Section 127 of Income Tax Act could be passed by the

Authorities at Mumbai, but that was no t done. On the other hand,

Principal Commissioner of Income Tax, Vijayawada of Andhra Pradesh

7

transferred the case. The search and seizure proceedings that took

place in the premises of M/s.Polisetty Somasundaram Group, Guntur, if

disclosed material concerning writ petitioner, the proceedings for

assessment should be taken up by the Authorities at Mumbai. But in

this case Respondent No.1/Authorities at Guntur itself proceeded and

that is in violation of Section 153C of the Income Tax Act. That the

petitioner has no other efficacious alternative remedy except to seek the

redressal before this court. Therefore, the impugned notices and orders

can not be allowed to survive.

[07. In response to the above contentions, the learned standing

counsel for Revenue/respondents contended that the material obtained

during search and seizure action was incriminating as it pointed out the

writ petitioner avoided disclosure of income and therefore the

respondent No.1 initiated scrutiny proceedings under Section 153C and

this writ petitioner never questioned the jurisdiction of Assessing Officer

and submitted himself to the jurisdiction of Assessing Officer and

therefore he cannot now turn around and contend that the Assessing

Officer had no jurisdiction to pass the Order of assessment in his case.

Order under Section 127 of the Income Tax Act passed by the Principle

Income Tax Officer, Vijayawada dated 16.02.2021 granted jurisdiction

to DCIT, Central Circle-1, Guntur and therefore the scrutiny

proceedings are valid. As against the Order of assessment an appeal lies

to the Commissioner of Income Tax (Appeals) but the petitioner without

8

availing that remedy by way of appeal approached this court and

therefore this Writ petition is not maintainable.

08. The subsidiary contentions of the writ petitioner are that he had

no nexus with M/s.Polisetty Somasundaram Group and there were no

cash transaction and the respondents authority did not provide to him

the so called seized documents or material so as to enable him to

furnish appropriate reply. That the notices issued by the respondent

authority are contrary to each other since at one breath they alleged

that this writ petitioner paid cash to M/s.Polisetty Somasundaram but

at another breath they claim that this writ petitioner received cash from

M/s.Polisetty Somasundaram group. That the notices did not disclose

the material. Learned counsel for the writ petitioner submits that

appropriate opportunities of hearing was never given to him and the

principles of natural justice were violated.

09. As against the above subsidiary contentions the learned standing

counsel for the respondents submit that the relevant material was

furnished through notices under Section 142(1) of the Income Tax Act

and petitioner though submitted written explanation did not submit any

relevant documents such as bank statements etc and despite summons

issued to the petitioner on 23.03.2022 he did not appear before the

Assessing Officer either personally or through an authorise d

representative to present his case and except submitting written

9

explanations devoid of any supporting documents in evidence of his

defence. Based on the seized pen-drive and the material contained in it,

satisfaction was drawn and therefore proceedings under Section 153C

of the Income Tax Act were initiated.

10. The rival contentions indicate that the writ petitioner challenges

the legal competence of the orders and proceedings passed under

Section 153C by Respondent No.1 as well as the legality of transfer

orders passed under Section 127 based on which the proceedings under

Section 153C were taken up by Respondent No.1.

11. In view of the rival contentions the following prime questions fall

for consideration before us:-

(1) Whether the Order dated 16.02.2021 of learned

Principal Commissioner of Income Tax, Vijayawada

transferring the Income Tax jurisdiction of writ petitioner

from Mumbai of Maharastha State to Guntur of A.P.State

enabling Respondent No.1 to pass the impugned orders is

arbitrary and is in violation of Section 127 of Income Tax

Act?

(2) Whether Respondent No.1 had no jurisdiction against

the writ petitioner under Section 153C to initiate scrutiny

proceedings against the writ petitioner and pass

assessment Orders?

(3) Whether transfer of a case under Section 127 of

Income Tax Act cannot be questioned after initiation of

scrutiny proceedings under Section 153C since writ

10

petitioner did not question the jurisdiction at that time

and submitted himself to the jurisdiction of Respondent

No.1?

(4) As against the Orders of assessment which are

impugned only an appeal lies to the Commissioner of

Income Tax (Appeals) and this writ petition is not

maintainable?

POINT Nos.1 to 4:-

12. Respondent No.1 gained input about the alleged un -accounted

cash transactions between the writ petitioner and M/s.Polisetty

Somasundaram Group on 28.01.2020 during the course of said search

and seizure proceedings conducted at Guntur. It was then, Respondent

No.1 initiated proceedings under Section 153C of the Income Tax Act.

By then the writ petitioner was not within the jurisdiction of

Respondent No.1 and he was an assessee at Mumbai. For convenience,

Section 153C of the Income Tax Act is extracted here:

“153C. Assessment of income of any other person - (1)

Notwithstanding anything contained in section 139, section 147,

section 148, section 149, section 151 and section 153, where the

Assessing Officer is satisfied that-

(a) any money, bullion, jewellery or other valuable article or

thing, seized or requisitioned, belongs to; or

(b) any books of account or documents, seized or requisitioned,

pertains or pertain to, or any information contained therein,

relates to,

a person other than the person referred to in section 153A, then,

the books of account or documents or assets, seized or requisitioned

11

shall be handed over to the Assessing Officer having jurisdiction

over such other person and that Assessing Officer shall proceed

against each such other person and issue notice and assess or

reassess the income of the other person in accordance with the

provisions of section 153A, if, that Assessing Officer is satisfied that

the books of account or documents or assets seized or requisitioned

have a bearing on the determination of the total income of such

other person for six assessment years immediately preceding the

assessment year relevant to the previous year in which search is

conducted or requisition is made and for the relevant assessment

year or years referred to in sub-section (1) of section 153A.

Provided that in case of such other person, the reference of the

date of initiation of the search under section 132 or making of

requisition under section 132A in the second proviso to sub-section

(1) of section 153A shall be construed as reference to the date of

receiving the books of account or documents or assets seized or

requisitioned by the Assessing Officer having jurisdiction over such

other person.

Provided further that the Central Government may by rules

made by it and published in the Official Gazette, specify the class or

classes of cases in respect of such other person, in which the

Assessing officer shall not be required to issue notice for assessing

or reassessing the total income for six assessment years

immediately preceding the assessment year relevant to the previous

year in which search is conducted or requisition is made and for the

relevant assessment year or years as referred to in sub-section (1) of

section 153A except in cases where any assessment or

reassessment has abated.

(2) Where books of account or documents or asset s seized or

requisitioned as referred to in sub-section (1) has or have been

received by the Assessing Officer having jurisdiction over such other

person after the due date of furnishing the return of income for the

assessment year relevant to the previous year in which search is

12

conducted under section 132 or requisition is made under section

132A and in respect of such assessment year-

(a) no return of income has been furnished by such other

person and no notice under sub-section (1) of section 142

has been issued to him, or

(b) a return of income has been furnished by such other

person but no notice under sub-section (2) of section

143 has been served and limitation of serving the notice

under sub-section (2) of section 143 has expired, or

(c) assessment or reassessment, if any, has been made,

before the date of receiving the books of account or documents or

assets seized or requisitioned by the Assessing Officer having

jurisdiction over such other person, such Assessing Officer shall

issue the notice and assess or reassess total income of such other

person of such assessment year in the manner provided in section

153A.

(3) Nothing contained in this section shall apply in relation to a

search initiated under section 132 or books of account, other

documents or any assets requisitioned under section 132A on or

after the 1

st day of April, 2021.

Thus the operating field of Section 153C of Income Tax Act is that where

during the course of search if any material is found pertaining to a

person other than the persons searched, the Assessing Officer who

found such material is ordained to hand over the material to that

Assessing Officer who holds the jurisdiction over such other person and

thereafter the other Assessing Officer shall proceed against such other

person and issue notices to such other person and assess or re-assess

the income of such other person in accordance with provisions of

Section 153(A) of the Income Tax Act, 1961.

13

Explaining about this principle the ruling of Delhi High Court in

Pepsi Foods (P) Ltd. Vs Assistant Commissioner of Income Tax

1

was

reiterated and followed by the High Court of Orissa in Sri Sai Cahsews

Vs Chief Commissioner of Income Tax, Bhubaneswar

2

. Para 12 of it,

to the extent relevant is, as below:

"On a plain reading of Section 153C, it is evident that the

Assessing Officer of the searched person must be "satisfied"

that inter alia any document seized or requisitioned "belongs

to" a person other than the searched person. It is only then

that the Assessing Officer of the searched person can

handover such document to the Assessing Officer having

jurisdiction over such other person (other than the searched

person). Furthermore, it is only after such handing over that

the Assessing Officer of such other person can issue a notice

to that person and assess or re -assess his income in

accordance with the provisions of Section 153A. Therefore,

before a notice under Section 153C can be issued two steps

have to be taken. The first step is that the Assessing Officer

of the person who is searched must arrive at a clear

satisfaction that a document seized from him does not

belong to him but to some other person. The second step is -

after such satisfaction is arrived at - that the document is

handed over to the Assessing Officer of the person to whom

the said document "belongs........”

Hon’ble Supreme Court of India interpreted and explained Section

153C of Income Tax Act in Super Malls Private Limited v. Principal

1

[2014]52 taxmann.com 220

14

Commissioner of Income Tax, 8, New Delhi

3

and laid down the law,

which is as below:

“7. This Court had an occasion to consider the scheme

of Section 153-C of the Act and the conditions precedent to be

fulfilled/complied with before issuing notice under Section

153-C of the Act in Calcutta Knitwears (CIT v. Calcutta

Knitwears (2014) 6 SCC 444) as well as by the Delhi High

Court in Pepsi Food (P) Ltd. ( Pepsi Food (P) Ltd. v. CIT, 2014

SCC Online Del 4029 : (2014) 367 ITR 112). As held, before

issuing notice under Section 153-C of the Act, the assessing

officer of the searched person must be “satisfied” that, inter

alia, any document seized or requisitioned “belongs to” a

person other than the searched person. That thereafter, after

recording such satisfaction by the assessing officer of the

searched person, he may transmit the

records/documents/things/papers, etc. to the assessing

officer having jurisdiction over such other person. After

receipt of the aforesaid satisfaction and upon examination of

such other documents relating to such other person, the

jurisdictional assessing officer may proceed to issue a notice

for the purpose of completion of the assessment under Section

158-BD of the Act and the other provisions of Chapter XIV-B

shall apply.”

In the case at hand, the notice under Section 153C of the Income

Tax Act 1961 having DIN and Notice No.ITBA/AST/S/153C/2021 -

22/1039508432(1) dated 08.02.2022 for the assessment year 2013 -

2014 and for subsequent assessment years were issued by Respondent

No.1 calling upon the writ petitioner to prepare true and correct return

2

[2021]131 taxmann.com 177 (Orissa)

15

of total income in the prescribed forms. Thus the material discovered

during search proceedings were not forwarded by the search authority

to the Assessing Officer holding jurisdiction over the writ petitioner.

Instead, Respondent No.1 took up the proceedings by itself.

13. Originally the writ petitioner is assessed for income tax at Mumbai

and is a resident of Mumbai and he was submitting income tax returns

for quite a long time. His case was transferred from Mumbai to Guntur

and this was done by the learned Principal Commissioner of Income

Tax, Vijayawada by Orders dated 16.02.2021 passed under Section 127

of Income Tax Act. By the said date it is un-disputed, the writ petitioner

was an assessee at Mumbai. The question arose is as to which is the

competent authority to pass order of transfer of cases. Section 127 of

the Income Tax Act, 1961 provides for transfer of cases. This provision

indicates the authority which is competent to pass the order of transfer

and the procedure which is to be followed for making an order of

transfer of case from one assessing authority to another assessing

authority. For better appreciation, Section 127 of the Income Tax Act is

extracted here:

“127. Power to transfer cases- (1) The Principal Director General

or Director General or Principal Chief Commissioner or Chief

Commissioner or Principal Commissioner or Commissioner may,

after giving the assessee a reasonable opportunity of being heard in

the matter, wherever it is possible to do so, and after recording his

3

(2020) 4 SCC 581

16

reasons for doing so, transfer any case from one or more Assessing

Officers subordinate to him (whether with or without concurrent

jurisdiction) to any other Assessing Officer or Assessing Officers

(whether with or without concurrent jurisdiction) also subordinate

to him.

(2) Where the Assessing Officer or Assessing Officers from whom

the case is to be transferred and the Assessing Officer or Assessing

Officers to whom the case is to be transferred are not subordinate

to the same Principal Director General or Director General or

Principal Chief Commissioner or Chief Commissioner or Principal

Commissioner or Commissioner-

(a) where the Principal Directors General or Directors

General or Principal Chief Co mmissioners or Chief

Commissioners or Principal Commis sioners or

Commissioners to whom such Assessing Officers are

subordinate are in agreement, then the Principal Director

General or Director General or Principal Chief Commissioner

or Chief Commissioner o r Principal Commissioner or

Commissioner from whose jurisdiction the case is to be

transferred may, after giving the assessee a reasonable

opportunity of being heard in the matter, wherever it is

possible to do so, and after recording his reasons for doing

so, pass the order;

(b) where the Principal Directors General or Directors

General or Principal Chief Commissioner or Chief

Commissioners or Principal Commissioners or

Commissioners aforesaid are not in agreement, the order

transferring the case may, similarly, be passed by the Board

or any such Principal Director General or Director General

or Principal Chief Commissioner or Chief Commissioner or

Principal Commissioner or Commissioner as the Board may,

by notification in the Official Gazette, authorise in this

behalf.

17

(3) Nothing in sub-section (1) or sub-section (2) shall be deemed to

require any such opportunity to be given where the transfer is from

any Assessing Officer or Assessing Officers (whether with or

without concurrent jurisdiction) to any other Assessing Officer or

Assessing Officers (whether with or without concurrent

jurisdiction) and the officers are situated in the same city, locality

or place.

(4) The transfer of a case under sub-section (1) or sub-section (2)

may be made at any stage of the proceedings, and shall not render

necessary the re-issue of any notice already issued by the

Assessing Officers or Assessing Officers from whom the case is

transferred.

Explanation- In section 120 and this section, the word “case”, in

relation to any person whose name is specified in any order or

direction issued thereunder, means all proceedings under this Act

in respect of any year which may be pending on the date of such

order or direction or which may have been completed on or before

such date, and includes also all proceedings under this Act which

may be commenced after the date of such order or direction in

respect of any year.”

According to Section 127(2) of the Income Tax Act, power to transfer of

cases is vested with the authority in whose jurisdiction the assessee is

situated. That authority shall give the assessee a reasonable opportunity

of being heard in the matter, wherever it is possible to do so, and after

recording his reasons for doing so, transfer any cases from one

Assessing Officer to other Assessing Officer not subordinate to him.

14. When that being the mandate of the statue, in the case at hand

the order of transfer instead of being made by the authorities at Mumbai

18

where the writ petitioner was an assessee, the order of transfer was

made by the authority at Vijayawada which transferred the case from

Mumbai to Guntur. The basis for Respondent No.1 to proceed for

assessment against the writ petitioner is that order. It is not the case of

respondents that authorities at Mumbai transferred the case. It is also

not the case of respondents that the respondents ever granted an

opportunity of hearing to the writ petitioner before they transferred the

case. It is to be stated here that the Principal Commissioner of Income

Tax at Mumbai served a notice dated 02.03.2021 on this writ petitioner

for transfer of the jurisdiction for the purpose of coordinat ed

investigation and assessment from Mumbai to Guntur. The said notice

is extracted here:

“ OFFICE OF THE PRINCIPAL COMMISSIONER OF IN COME TAX -19

2

nd

Floor, Matru Mandir, Tardeo Road, Mumbai – 400 007

Tel:022-23855951/FAX:022-23821527

Email ID:Mumbai.pcit19@incometax.gov.in

No.Pr.CIT-19Centralisation/Polisettygrp/2020-21 date:02.03.2021

PAN:AGPPS8124A

To

Shri Vijay Nathulal Sharma,

83-A, Anita Bldg, 8

th

Floor,

Mt.Pleasant Road, Malabar Hill,

Mumbai-400006.

Sir/Madam,

Sub: Centralisation for income tax assessment in your case-

Opportunity to make submissions.

Ref: Search action u/s.132 of the Income Tax Act, 1961

conducted on 28.01.2020 in case of M/s.Polisetty

Somasundaram Group & Others, Guntur.

******

Please refer to the above.

2. A search u/Section132 of the Income Tax Act, 1961 was

conducted on 28.01.2020 in case of M/s.Polisetty Somasundaram Group

19

& Others, Guntur. During the course of search proceedings, your case

was covered u/s.132/133A. Accordingly a request has been received

from the PCIT(Central), Visakhapatnam for transfer of the jurisdiction of

the PAN and centralization of your case for the purpose of coordinated

investigation and assessment in relation to the search proceedings as per

CBDT guidelines. Therefore the jurisdiction of your case is proposed to

be transferred from the present jurisdiction of ITO-19(1)(1), Mumbai to

the DCIT/ACIT, Central Circle-1, Guntur. The said transfer is being

made in the interest of the revenue so as to enable proper and co -

ordinated assessments.

3. In this connection as per clause (a) of sub section (2) of Section

127 of the Income Tax Act, 1961 you are hereby given an opportunity of

being heard. You may appear in this office as mentioned above either

personally or through your representative, duly authorised in this behalf

on 04.03.2021 at 12.00 PM or inform your reasons by writing on or

before.

4. I am directed to request you to appear before the

Pr.Commissioner of Income Tax-19, Mumbai or give reasons in writing on

the said date failing which it will be presumed that you have no objection

for the proposed transfer.

Yours faithfully,

(Jyotika P Ratanpal)

ITO(HQ)(Tech.) to Pr.CIT-19

Mumbai.”

Thus on one hand action in terms of Section 127 of Income Tax

Act, 1961, was in the offing at Mumbai and opportunity of hearing was

scheduled on 04.03.2021 at Mumbai . However, much earlier to it the

Order dated 16.02.2021 of learned Principal Commissioner of In come

Tax Act, Vijayawada transferred the case from Mumbai to Guntur. Be it

noted, by 16.02.2021 the competent authority at Mumbai did not even

commence the proceedings of transfer as it commenced its proceedings

for transfer only on 02.03.2021. In that scenario, even Sub-Section (4) of

Section 127 of the Income Tax Act do not come for rescue for the

Revenue. As a matter of record the assertions in the writ petition about

the above referred notice dated 02.03.2021 issued by the office of the

Principal Commissioner of Income Tax, Mumbai remain unquestioned

20

and was not adverted to in the counter affidavit filed for the

respondents. The above facts do indicate that at some point of time the

revenue was conscious of statutory position as to which was the

competent authority to transfer a case in terms of Section 127 of Income

Tax. Yet, the action of transfer was taken up and achieved by the

authorities of respondent No.1 which is not provided under law. This

action on the part of the authorities of Respondent No.1 can be called as

arbitrary as it was done in violation of the mandate in Section 127 of

Income Tax Act. Article 14 of the Constitution of India provides for equal

protection of laws and in the case at hand the acts of the authorities of

Respondent No.1 which are based on Order dated 16.02.2021 by the

learned Principal Commissioner of Income Tax, Vijayawada st and

against that constitutional mandate.

15. The upshot of the above discussion would indicate that the Order

of transfer of case under Section 127 was without jurisdiction and the

proceedings initiated under Section153C on the part of Respondent No.1

are also without jurisdiction. Therefore, the orders of assessment that

were passed by Respondent No.1 on the anvil of the above proceedings

under Section 127, 153C shall be held as invalid orders passed without

jurisdiction.

21

16. In such scenario, the contention of the standing counsel for

Revenue is that the writ petitioner when received notices and summons

from Respondent No.1 did not raise objection concerning jurisdiction

before Respondent No.1 and submitted himself to the jurisdiction of

Assessing Officer and therefore he cannot now cont end that the

Assessing Officer had no jurisdiction to pass the order. In affect this

argument conveys only the argument of convenience for Respondent

No.1, and is not hinged on any principle either in a statute or in the

precedent, brought to the notice of this Court by the Revenue to the

affect that by mere responding to the notice issued by Respondent No.1

jurisdiction stood vested with Respondent No.1. It is well know that

when statute prescribes the authority with whom the power is vested it

is only that authority which can exercise that power. By consent of

parties the statutory prescription cannot be waived nor vested with

another authority. Though the plea of legal competency and jurisdiction

was not raised by the writ petitioner before the assessing authority, this

being a question of law going to the root of the matter, the same can be

raised at any stage of the proceedings. Therefore, this argument of

Revenue does not hold merit.

17. The learned standing counsel for respondent urged that the writ

petitioner questions order of assessment and the Income Tax Act 1961

provides a provision for preferring an appeal before the Commissioner of

22

Income Tax (Appeals) and therefore this Writ Court cannot entertain the

writ petition.

18. In support of such contention support is taken from

Commissioner of Income Tax Vs Chhabil Dass Agarwal

4

. In that

case, the Assessing Authority passed assessment orders and they were

questioned in the Writ without filing an Appeal. The Writ Court

quashed the Orders. Aggrieved of it, the Revenue moved the Hon’ble

Supreme Court of India. It was in that context their Lordship were

pleased to delve into Article 226 of the Constitution of India and at Para

15 it is stated that it is within the discretion of the High Court to grant

relief under Article 226 despite the existence of an alternative remedy.

However, the High Court must not interfere if there is an adequate

efficacious alternative remedy available. At Para 19 their Lordship

recorded the exceptions to the rule of alternative remedy and stated that

where the statutory authority has not acted in accordance with the

provisions of the enactment in question, or in defiance of the

fundamental principles of judicial procedure, or has resorted to invoke

the provisions which are repealed, or when an order has been passed in

total violation of the principles of natural justice writ lies. In other cases,

the assesee is to pursue the statutory mechanism of the appeal. In the

context of the above ruling when the case at hand is analysed it is

4

[2013]36 taxmann.com36 (SC)

23

manifestly clear that in this case authority which was not competent to

act resorted to Section 153C and resorted to Section 127 of the Income

Tax Act. Thus the case at hand falls within the recognised exceptions

mentioned in the cited ruling. In that view of the matter an appeal

before the Appellate Authority cannot be called as efficacious adequate

alternative remedy. Therefore, the contention of the writ petitioner that

he has no other adequate and alternative efficacious remedy has to be

accepted as correct. In that view of the matter, the contention of the

Revenue about the jurisdiction to entertain this Writ cannot be

sustained.

19. In view of the above conclusions reached, the subsidiary

contentions raised in this writ petition by Respondent No.1 about not

affording proper opportunity to him by Respondent No.1 and violation of

principles of natural justice of Respondent No.1 and such other

contentions do not require any decision.

20. In view of the discussion made above, this Writ Petition is allowed

and the impugned Orders of assessment and notices are declared as

arbitrary and illegal and therefore they are set aside. Liberty is granted

to respondent authorities to commence proceedings afresh in

accordance with law. There shall be no order as to costs.

24

As a sequel, miscellaneous petitions, if any pending, shall

stand closed.

________________________

C.PRAVEEN KUMAR , J

____________________________

Dr. V.R.K.KRUPA SAGAR , J

Date: 21.10.2022

KLNS

25

HON’BLE SRI JUSTICE C.PRAVEEN KUMAR

AND

HON’BLE JUSTICE Dr.V.R.K.KURPA SAGAR

Writ Petition No.22111 of 2022

21.10.2022

KLNS