PRACHAR COMMUNICATIONS PVT. LTD. vs. PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA 4 AND ORS

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WPO/623/2019HC CalcuttaWBCHCO003431201911 February 2022Author: HON'BLE JUSTICE MD. NIZAMUDDIN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the impugned order dated September 2, 2019, passed under Section 127 of the Income Tax Act, 1961. This decision was based on the specific stand taken by the respondent Income Tax Authority, as conveyed through written instructions dated January 5, 2022, that they were agreeable to transferring the Income Tax file of the petitioner back from Bangalore to Kolkata. The court noted that all legal consequences would follow automatically. The instruction dated January 5, 2022, was directed to be kept with the record. The writ petition was disposed of in view of this order. The issue regarding allowing proceedings initiated by the DCIT CC 2(3), Bangalore, during the stay period was not expressly decided but implicitly addressed by the setting aside of the transfer order.

What were the facts?

The petitioner, Prachar Communications Pvt. Ltd., filed a writ petition challenging an order dated September 2, 2019, passed under Section 127 of the Income Tax Act, 1961. This order transferred the petitioner's income tax file from Kolkata to Bangalore. The Revenue, represented by the Principal Commissioner of Income Tax, Kolkata 4 and others, submitted written instructions dated January 5, 2022, from the Assistant Commissioner of Income Tax (HQ) for the Principal Commissioner of Income Tax, Central, Bangalore. These instructions indicated the Bangalore authorities' agreement to transfer the petitioner's income tax file back to Kolkata. The instructions also requested the High Court to allow proceedings initiated by the DCIT CC 2(3), Bangalore, during the stay period, as notices were issued to protect revenue interest and the stay order would not extend the limitation period for issuing notices.

What were the issues?

1. Whether the order dated September 2, 2019, passed under Section 127 of the Income Tax Act, 1961, transferring the petitioner's income tax file from Kolkata to Bangalore, is valid. (Question of law and fact) Assessee's Contention: The petitioner challenged the validity of the transfer order. Revenue's Contention: The Revenue, through written instructions dated January 5, 2022, indicated their agreement to transfer the income tax file back to Kolkata. They also requested that proceedings initiated by the DCIT CC 2(3), Bangalore, during the stay period be allowed to continue, as notices were issued to protect the interest of revenue and the stay order would not extend the limitation period for issuing notices.

Which sections of the Income-tax Act were involved?

Section 127

AI-generated summary — verify with the full judgment below

OD – 27 ORDER SHEET WPO/623/2019 BEFORE: The Hon'ble JUSTICE MD. NIZAMUDDIN Date : 11TH FEBRUARY, 2022. Appearance: Mr. J.P. Khaitan, Adv. Mr. A. Banerjee, Adv. Mr. Sanjay Baid, Adv. ..for the petitioners Mr. Smarajit Roychowdhury, Adv. Mr. Asok Bhowmick, Adv. …for the respondents The Court: In this matter, the petitioner has challenged the impugned order dated 2nd September, 2019 passed under Section 127 of the Income Tax Act, 1961 transferring the Income tax file of the petitioner from Kolkata to Bangalore. Mr. Roychowdhury, learned Advocate appearing for the respondent, Income Tax Authority submits the written instruction dated 5th January, 2022 issued by the Assistant Commissioner of Income Tax Act, (HQ) for Principal Commissioner of Income Tax Central, Bangalore, from which it appears that the respondent Income Tax Authority at Bangalore are agreeable to transfer the income tax file of the petitioner to Kolkata. Particularly, paragraph 5 of said instruction is very relevant, which is quoted below:

2 “I am directed to further state that this office has no objection, if the case is centralised in Kolkata itself. However the Hon’ble High Court may be requested to allow the proceedings initiated by DCIT CC 2(3), Bangalore during the stay period, as the notices were issued to protect the interest of revenue and stay order will not extend the limitation period for issue of notice. Since the matter is posted for hearing before Hon’ble High Court on 10.01.2022, the departmental Standing Counsel may be briefed accordingly.” In view of the specific stand by the respondent Income Tax Authority that they are agreeable in transferring back Income Tax file of the petitioner from Kolkata to Bangalore, the impugned order dated 2nd September, 2013 passed under Section 127 of the Act is set aside. All legal consequences will follow automatically. Let the instruction dated 5th January, 2022 filed by Mr. Roychowdhry be kept with the record.

In view of the above order, the writ petition being WPO No. 623 of 2019 stand disposed of. (MD. NIZAMUDDIN, J.) Sbghosh

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