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Judgment
N. K. Agrawal, J.
This is a petition under articles 226 and 227 of the Constitution for quashing the order dated 13-2-1998, passed by the Central Board of Direct Taxes, New Delhi, and seeking a direction to transfer the assessment proceedings pending before the Deputy Commissioner of Income Tax , Special Range, Karnal.
Petitioner is a private limited company with its registered office at 90-91, Green Park, Hisar, and factories at village Chikanwas, 13th K.M. Stone, Sirsa Road, Hisar, and at 140-150A, Maha Gujarat Industrial Estate, Sarkhej-Bavia Road, Ahmedabad. Petitioner''s working office is, at present, B-6/1, Goyal Intercity, Drive-in Road, Ahmedabad. Petitioner is engaged in the business of the manufacture of ''Maida'', ''Sujee'', ''Atta, etc. Petitioner- company was set up by the promoters to run roller flour mills at Hisar to manufacture wheat products such as ''Maida'', ''Sujee'', Rawa Atta'', Bran, etc. The unit of Hisar commenced production in December, 1988. Returns of income were filed at the office of Deputy Commissioner of Income Tax , Special Range, Rohtak (Haryana). Operation of the unit at Hisar is said to have been suspended and closed from December, 1996, due to various administrative and other problems. The staff was relieved and only the security guards were posted at the Hisar unit. The unit at Ahmedabad is said to be running now and all the work of the petitioner-company is conducted by the office at Ahmedabad. A new roller flour mills was set up at village Chungodar near Ahmedabad in the State of Gujarat. It started production in December, 1996.
The petitioner''s case in the present petition is that it made representation to the Deputy Commissioner of Income Tax Special Range, Rohtak, to transfer company''s assessment file to Ahmedabad so that the petitioner- company could file the return of income there. Since it was not convenient for the company''s directors to file returns of Income Tax at Rohtak, request for the transfer of the case was made. It is also explained that search was conducted by the Income Tax authorities on 29-5-1997 & 30-5-1997, at Hisar and Ahmedabad. Proceedings were started by the Addl. Director, Income Tax (Investigation), Hisar. The petitioner- company made a request to the Chief Commissioner of Income Tax Ahmedabad (Gujarat) on 9-7-1997 seeking the transfer of the case from Rohtak to Ahmedabad on the ground that the company had shifted its corporate office there after the closer of its unit at Hisar in December, 1996. During the search at Hisar, no staff was found at the Hisar unit. The Directors were also at Ahmedabad at that time. It was explained by the petitioner that it would be necessary, after search operation, to obtain copies of the documents seized during search. Such copies have not been provided as yet. Another application was filed on 3-7-1997 before the Chairman, Central Board of Direct, Taxes New Delhi, seeking the transfer of the file to Ahmedabad on the ground that the operation of the company was being carried out from Ahmedabad only. A request to that effect was also made to the Commissioner of Income Tax Gujarat (I), Ahmedabad.
Shri A.K. Mittal, learned counsel for the petitioner, has argued that it would not be possible for the petitioner to get the assessment done at the Income Tax office at Karnal or to attend to the proceedings there in connection with the search and seizure. The unit at Hissar has been permanently closed. It would also be very expensive to attend to the proceedings at Karnal. It is, therefore, contended by Shri Mittal that the respondents may be directed to transfer the Income Tax case of the petitioner to Ahmedabad. The request made to the Chairman, Central Board of Direct Taxes New Delhi, has been declined.
A civil writ petition (No. 18038 of 1997) was earlier filed by the petitioner and that was disposed of with a direction to the Chairman, Central Board of Direct Tax, New Delhi, to take a final decision on the petitioner''s representation within six weeks.
The request made by the petitioner has been considered by the Central Board of Direct Tax, New Delhi, and by letter dated 13-2-1998 the request has been declined, giving the following reasons:
"(a) The registered office of the company is situated at Hissar since the year 1991 which has not yet been shifted at Ahmedabad.
(b) For administrative reasons, it would be proper if witnesses and papers found during search and seizure operations are examined in the charge of Chief Commissioner of Income Tax, Chandigarh, since the operation was conducted in his charge.
(c) You have availed sales-tax exemption under the sales-tax laws. The company cannot close its business at present at Hissar in Haryana as per the provision of sales-tax laws".
Section 127 of the Income Tax Act, 1961, empowers the authorities to transfer a proceeding or a case from one office to another. The request made by the petitioner- company has been considered by the Central Board of Direct Taxes New Delhi. It appears that the request made by the petitioner has been declined, giving three reasons. These reasons have been challenged but, in our opinion, there is no substance in the challenge put forward by the petitioner. It is an administrative act of the Central Board of Direct Taxes, Shri Mittal has placed reliance on a decision of the Bombay High Court in Devidas Vs. Union of India and another, . It was held therein that an enquiry had been made and that material had been used against the assessee without affording him an opportunity to offer any explanation. The impugned order was vitiated because of absence of hearing and recording of reasons. The order was liable to be quashed. In our opinion, the aforesaid decision does not help the petitioner. The application of the petitioner, seeking transfer of his case, has been considered and, after giving reasons, the application has been rejected. In these circumstances, letter dated 13-2-1998, conveying the decision to the petitioner, cannot be faulted. Admittedly, the petitioner- company has not taken any steps for the change of its registered office from Hissar to Ahmedabad. The search and seizure operations took place simultaneously at Hissar as well as Ahmedabad. In these circumstances, the reasons assigned by the Central Board of Direct Tax cannot be said to be unfounded.
In the result, the writ petition is found to have no merit and it is dismissed in limine.