IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 221 CWP-4264-2019 (O&M) Date of Decision :9.9.2019 M/s. H.M.Steels Limited and another Petitioners Versus Principal Commissioner of Income Tax, Patiala Respondent CORAM : HON'BLE MR.JUSTICE AJAY TEWARI : HON'BLE MR. JUSTICE HARNARESH SINGH GILL Present: Ms. Radhika Suri, Senior Advocate with Mr. M.S.Kanda, Advocate for petitioners-assessees. Mr. Kunal Sharma, Standing counsel for respondent. AJAY TEWARI, J. (Oral) This petition has been filed challenging order dated 2.1.2019 (Annexure P-6) passed by Principal Commissioner of Income Tax, Aaykar Bhawan, Patiala under Section 127 (2) of Income Tax Act, 1961 transferring assessment of case of assessees from DCIT, Sangrur to DCIT, Karnal. Admitted facts of case are that assessees started their operation in year 2005-2006. In year 2013-14, three Directors of M/s Jai Bharat Group were inducted as Directors of petitioners' company (after acquiring adequate share holding). On 3.5.2018 search and seizure was conducted at residential premises of M/s Jai Bharat Group and lot of incriminating material was found there. Thereafter, 1 of 4 ::: Downloaded on - 20-09-2019 11:38:41 ::: CWP-4264-2019 (O&M) 2 survey was conducted in business premises of assessees' group but nothing incriminating was found. Subsequently, notice was issued to petitioners' company on 27.6.2018. operative part of which is as follows :- In this regard, it is informed that search and seizure operation was carried out in above group of cases by Directorate of Income Tax (Inv), Chandigarh on 03.05.2018. Subsequently Pr. Commissioner of Income Tax (Central), Gurgaon has proposed centralization in respect of your case to Assessing Officer Central Circle at Chandigarh which also includes-M/s Jai Bharat Group,. Panipat. All cases in proposal have been covered under warrant of authorization u/s 132 (1) and survey u/s 133A of Income Tax Act, 1961 and books of accounts and other documents were found and seized/impounded in these cases. These are all core cases and directly connected with group and for proper and meaningful coordinated investigations; these required to be centralized with Assessing Officer. petitioners filed reply in which it was averred that there is no direct or indirect connection with M/s Jai Bharat Group and in fact, it was only in year 2013-14 that some Directors of M/s. Jai Bharat Group were inducted on Board of petitioners' company and Directors of petitioners' company have no stake in M/s. Jai Bharat Group and in fact, during survey conducted on their premises nothing incriminating was found. Hearing was took place on 16.10.2018 before Principal Commissioner of Income Tax, Patiala. Thereafter, respondent could have passed order but instead, he addressed letter to Deputy Director of Income Tax, Investigation on 24.10.2018, asking it for comments which were sent on 14.12.2018 Annexure R-2 and it was 2 of 4 ::: Downloaded on - 20-09-2019 11:38:41 ::: CWP-4264-2019 (O&M) 3 pointed out that during course of search proceedings at premises of M/s. Jai Bharat Group, some incriminating documents related to both assessees were found and impound. It was further mentioned that data of computer installed at premises also contained reference to bogus billing which had been indulged by both these groups. After receipt of this letter, ultimately, impugned order dated 2.1.2019 Annexure P-6 was passed. perusal of this order also states that there is no reason indicated therein, and rather order proceeds on basis of that both are 'related concerns'. Learned Senior counsel for petitioners has argued that notice issued to petitioners indicates no reason and from very beginning petitioners have disputed that they are 'related concerns' and they have urged material arguments and averments to dispute this assertion but impugned order proceeds on assumption that they are 'related concerns' without dealing objections of petitioners regarding this identification. Her further submission is that comments which were submitted by DDIT also weighed with respondent in passing impugned order but no copy thereof was ever supplied to petitioner before, so that they could get opportunity to rebut same. She has placed reliance upon judgment of Supreme Court passed in matter of Ajantha Industries & others Vs. Central Board of Direct Taxes, New Delhi & others reported as AIR 1976 SC 437, judgment of Bombay High Court in matter of Global Energy Pvt. Ltd. vs. Commissioner of Income Tax, reported as (2013) 356 ITR 502 Bom. and judgment of this Court in matter of Rajesh Mahajan and others vs. 3 of 4 ::: Downloaded on - 20-09-2019 11:38:41 ::: CWP-4264-2019 (O&M) 4 CIT reported as 2002 ITR 25 577. Counsel for respondent-Revenue has argued that petitioners were heard before orders transferring their assessment was passed and that transfer from Sangrur to Karnal can hardly be deemed to be prejudice. He has relied upon judgment of this Court in matter of Charan Pal Singh vs. Commissioner of Income Tax and another reported as (2008) 307 ITR 132 (P&H) and judgment of Supreme Court passed in matter of Ambika Solvex and Ors vs. Commissioner of Income Tax and Ors reported as 1976 CTR (SC) 79. In our considered opinion, petition must succeed. notice did not contain any reason. impugned order is cryptic and there was no earthly reason why report of DDIT could not having been put to petitioner. On this limited ground, we set aside impugned order and grant liberty to Revenue to cure illegality. For this purpose, petitioners (who now have access to copy of letter dated 14.12.2018) may file further objections within three weeks from today and respondent would be at liberty to pass fresh order thereof, after giving them one more opportunity of hearing. petition stands disposed of. Since main case has been decided, pending CM, if any, also stands disposed of. (AJAY TEWARI) JUDGE (HARNARESH SINGH GILL) JUDGE 9.9.2019 anuradha Whether speaking/reasoned - Yes/No Whether reportable - Yes/No 4 of 4 H.M. Steels Limited and another v. Principal Commissioner of Income-tax, Patiala