Law:

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Section 127 of the Income-tax Act, 1961 - Income-tax authorities - Power to transfer cases - Assessee's cases were transferred from Delhi to Meerut by an order under section 127 on ground that a search was conducted in cases of ATS group which included assessee's case as well and there being an intimate connection between assessee and said group, it was necessary that cases be centralized with Assessing Officer handling other cases of group - Assessee filed writ petition challenging transfer of its cases - Whether, on facts, there being no material to come to conclusion that decision to transfer assessee's cases out of Delhi was mala fide, writ petition was liable to be dismissed - Held, yes FACTS The assessee's cases were transferred from Delhi to Meerut by an order under section 127 on ground that a search was conducted in cases of ATS group which included the assessee's case as well and there being an intimate connection between the assessee and the said group, it was necessary that the assessee's cases were centralized with the Assessing Officer handling other cases of the group. The assessee filed writ petition challenging the order of transfer. HELD There is no fundamental right of an assessee to be assessed at a particular place. Under section 124, the assessment must be carried out at the principal place of business, but when powers under section 127 are invoked, territorial nexus becomes irrelevant. Further, the determination of the venue of the assessment would be governed by the greatest effectivity for collection of taxes. The decision to transfer cases cannot be capricious or mala fide. If the venue is changed from year-to-year or periodically for no apparent reason, it would not manifest an instance of exercise of power which is not available, but an example of an abuse of power in the manner in which it is exercised. Whilst the convenience of the assessee should be kept in mind, it would always be subservient to the interest of adjudication and collection of taxes. [Para 11] When aforesaid tests are applied to the instant case, the decision to transfer the cases out of Delhi would become unassailable, keeping in view the outcome of the searches…

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