JUDGMENT
1. The abovenoted writ petitions arise from a common impugned order dated April 4, 2005 (annexure 5 in both the writ petitions), passed by the Commissioner of Income-tax in exercise of his jurisdiction under Section 127(2) of the Income-tax Act, 1961 (called "the Act"), read with Section 11, Wealth-tax Act and Section 7 of the Gift-tax Act, 1958, transferring the cases of the petitioners from Kanpur to Delhi. A show-cause notice dated March 16, 2005, was given to the petitioner as required under Section 127(1) of the Act/annexure 3 to the writ petition giving opportunity of hearing before passing the impugned order under Section 127(2) of the Act. The said notice was given in view of the search and seizure operation under Section 132 of the Act conducted on July 2, 2003, in the premises belonging to the firm and companies (referred to as Shikhar Gutkha group) and their partners/directors while proposing to transfer the cases of the said assessee-petitioner "for the purposes of co-ordinated and effective investigation" from Kanpur to Delhi. The petitioner, Virendra Kumar Jain, submitted reply dated April 1, 2005, requesting the authority to inform him the material and evidence on the basis of which it had come to the conclusion that the assessee had connections with the Shikhar Gutkha group. According to the petitioner, the said information was sought in this regard earlier also.
2. In the case of M/s. Vijay Kumar Pradeep Kumar (W. P. No. 756 of 2005), show cause notice under Section 127(1) of the Act contained similar averments as in the case of Virender Kumar Jain (petitioner in Writ Petition No. 755 of 2005). In response to the said notice, the assessee in question (Vijay Kumar Pradeep Kumar) submitted reply dated August 20, 2004/annexure 2 to the writ petition. In this reply also it was stated "We may submit that we have no connection with the Shikhar Gutkha group except with the fact that one of the partners Shri Pradeep Kumar Agrawal is a director therein. You have not assigned any reason in the notice under reference, the manner in which our firm has been found to be connected with the Shikhar Gutkha group. Our concern is a small partnership firm, entirely different entity from the company M/s. Trimurti Fragrances P. Ltd., manufacturer of Shikhar brand gutkha ...."
3. It was further mentioned in the reply that the Commissioner of Income-tax, Kanpur, had initiated action against two partners of the said firm who had filed writ petition before the High Court wherein proceedings before the Assistant Commissioner of Income-tax-I, New Delhi, were got stayed.
4. Overruling the aforesaid objections, the Commissioner of Income-tax, passed the impugned order of transfer dated April 4, 2005/annexure 5 to the writ petition. For convenience paras. 4, 5 and 6 the impugned order are reproduced below :
The assessees have mainly objected to the said transfer on the ground that they have no connection with the Shikhar Gutkha group. In the reply dated April 1, 2005, the assessees have requested for furnishing of the material and evidence on the basis of which it was claimed in the notice dated March 16, 2005, that the said cases are connected with Shikhar Gutkha group. It was explained to the asses-sees' representative during the course of hearing on April 1, 2005, that as far as the case of M/s. Vijay Kumar Pradeep Kumar is concerned, Shri Pradeep Kumar Agarwal is a partner in M/s. Vijay Kumar Pradeep Kumar and he is also a director of M/s. Trimurti Fragrances P. Ltd., which is manufacturing the Shikhar Gutka brand. Thus the connection of M/s. Vijay Kumar Pradeep Kumar with the Shikhar Gutka group is quite evident. It may, further, be mentioned here that in M/s. Vijay Kumar Pradeep Kumar, besides Shri Pradeep Kumar, his brother, Shri Vijay Kumar Agarwal and his mother, Smt. Shanti Devi Agarwal, are also partners and in M/s. Trimurti Fragrances P. Ltd., the entire shareholding of the company is controlled by the family of the said persons. It is, therefore, clear that M/s. Vijay Kumar Pradeep Kumar is an integral part of the Shikhar Gutkha group.
As regards the other case, namely, Shri Virendra Kumar Jain, it was explained to the assessees' representative during the course of hearing on April 1, 2005, that the case of Shri Virendra Kumar Jain was also covered under Section 132 along with the case of M/s. Trimurti Fragrances P. Ltd., on the same day. The factory premises of the said assessee situated at 304-305, Patparganj Industrial Area, Delhi, is owned by Karan Traders P. Ltd., in which Shri Murli Dhar Agarwal and Shri Prashan Agarwal are the directors. It may be mentioned here that Shri Murli Dhar Agarwal is the father of Sri Pradeep Kumar Agarwal and Shri Prashant Agarwal is his nephew. It is, further ascertained that Shri Virendra Kuamr Jain, who is the proprietor of M/s. Mahabir Grinding, is engaged in grinding of supari being used in gutkha manufactured by M/s. Trimurti Fragrances P. Ltd., and he is the main grinder of supari for the group. The said case is, therefore, also connected with the Shikhar Gutkha group.
The objections raised by the said two assessees against the proposed transfer of their cases to New Delhi are, therefore, not tenable. Since all other cases of the Shikar Gurka group, including the cases which were earlier being assessed at Kanpur as well as the case of the main company of the group, namely, Trimurti Fragrances P. Ltd., have already been centralised with the Deputy Commissioner of Income-tax, Central Circle-9, New Delhi it is necessary to centralise the said two cases, namely, M/s. Vijay Kumar Pradeep Kumar and Shir Virendra Kumar Jain also with the Deputy Commissioner of Income-tax, Central Circle 9, New Delhi, so that co-ordinated and meaningful investigations could be done in these cases consequent upon the aforesaid search and seizure action. In this regard, reliance is placed on the decision of the hon'ble High Court of Gauhati in the case of Rathi and Co. v. Union of India , in which the hon'ble High Court has held that the necessity for centralisation of the cases belonging to a particular group to a single Assessing Officer for coordinated and effective investigation is a valid ground for transfer.
5. The concerned authority noted the objection of the assessee in the impugned order of transfer, namely, the request of the assessee for furnishing of the information/material on the basis of which the Department claimed that their cases were connected with the Shikhar Gutkha group. It is also mentioned in the impugned order that it was explained to the assessee that Pradeep Kumar Agarwal was a partner in M/s. Vijay Kumar Pradeep Kumar Agarwal and he is also one of the directors of M/s. Trimurti Fragrances P. Ltd., to which belonged the product--the Shikhar Gutkha brand ; the connection of M/s. Vijay Kumar Pradeep Kumar Agrawal with the Shikhar Gutkha group was quite evident from the fact that the partners of the firm-"M/s. Vijay Kumar Pradeep Kumar (viz., Vijay Kumar Agarwal brother, Pradeep Kumar Agarwal and their mother, Smt. Shanti Devi Agarwal) were in the management of M/s. Trimurti Fragrances P. Ltd., the entire shareholding family; as well as the control of these "units" vested in the members of one ; it was, therefore, clear that M/s. Vijay Kumar Pradeep Kumar is an integral part of the Shikhar Gutkha group, the case of Shri Virendar Kumar Jain also had connection with the case of M/s. Trimurti Frangrances P. Ltd. Since the factory premises of the said assessee situated at 304-305, Patparganj Industrial Area, Delhi, were owned by "Karam Traders P. Ltd." wherein his father (Murlidhar Agarwal) and Prashant Agrawal (grandson of Murlidhar Agarwal) were directors ; that Shri Virendra Kumar Jain, proprietor of M/s. Mahabir Grinding, was the main grinder of supari used in the product of "Shikhar Gutkha" manufactured by M/s. Trimurti Fragrances P. Ltd. ; and hence the objections raised by the assessees against "proposed transfer" of their cases from Kanpur to New Delhi were not tenable. The authority also noted that all other cases of Shikhar Gutkha group including M/s. Trimurti Fragrances P. Ltd., were centralised with the Deputy Commissioner of Income-tax, Central Circle-9, New Delhi, and there expedient to centralise the cases of "assessees in question" with the Deputy Commissioner of Income-tax, Central Circle-9, New Delhi, "so that co-ordinated and meaningful investigations could be done in these cases...."
6. In the case of Peacock Chemicals P. Ltd. v. CIT and Mahesh Chand Vishan Swarup v. CIT (Bench presided over by B. P. J. Reddy), it is consistently held that the paramount consideration for transfer should be public interest and the reason to have co-ordinated investigation in the matter of one family members or group of company/firm is a good ground. In the instant case, the authority has recorded its satisfaction and given good reason which cannot be faulted.
7. The contention of the petitioner that the Department should have furnished information with them (as claimed by them in their reply) is not at all sound as the Department cannot be compelled or required at the initial stage to disclose the "material" or "information" as it may "embarrass or prejudice" the assessment. The legal position is crystal clear and settled by a catena of the decisions of this Court and the apex court on this issue. this Court cannot go into the "sufficiency" of the reasons : There is no pleading that the impugned order of transfer is due to "bias" or "mala fide" or otherwise "arbitrary". The reasons indicated in the impugned order cannot be said to be irrelevant. Reference may be made to the decision of this Court in the case of Madhav Sharan Agrawal v. CIT . We may refer to our judgment rendered today, i.e., February 23, 2006 in Writ Petition No. 355 of 2005 : Trimurti Fragrances P. Ltd. v. CIT [2006] 283 ITR 547, wherein we had an occasion to deal with this aspect in detail.
8. The submission of Learned Counsel for the petitioner that supplying of supari between the parties which fact is not in dispute, is a "perverse and irrelevant reasoning" unless the Department had gone a step ahead to show that such supply of supari had some nexus or was relevant for the purposes of co-ordinated assessment proceedings of the Shikhar Gutkha group cases which could be achieved by centralisation of the cases. The aforesaid submission has no merit for the reason that the mere fact that the assessee is supplier of the main ingredient of "gutkha", namely, supari, to M/s. Trimurti Fragrances P. Ltd. would show that there is inter se close commercial connection apart from close family associations and that is, in our considered opinion a very valid, genuine and compelling ground for consolidating and centralising the cases.
9. In view of the above discussion, we find no manifest error apparent on the face of the record in the impugned order of transfer dated April 4, 2005 (annexure 5 in both the writ petitions).
10. The abovementioned writ petitions stand dismissed.
11. No costs.