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[2007] 290 ITR 316 (CAL.) HIGH COURT OF CALCUTTA P. S. Housing Finance (P.) Ltd. v. Union of India MRS. INDIRA BANERJEE, J W. P. NO. 503 OF 2006 JULY 26, 2006 Section 127 of the Income-tax Act, 1961 - Income-tax authorities - Power to transfer cases â–  Order of transfer is amenable to scrutiny under article 226 of Constitution; where there was no connection or nexus between petitioner-company and its director (Petitioner No. 2), located in Kolkata, with Mumbai-based company which was searched, merely on ground that petitioner-company's director was also director of Mumbai company, transfer of cases of petitioner to Mumbai was not justified There can be no doubt that an order of transfer under section 127 is amenable to scrutiny under article 226 of the Constitution of India. In proceedings under article 226 of the Constitution of India, the court might examine the reasons for transfer of a case, and if the reasons ex facie do not justify transfer, an order of transfer might be interfered with by the Court. The case of the petitioner was transferred from Kolkata to Mumbai. The petitioner No. 1 was a company and the petitioner No. 2 was a director and shareholder of petitioner No. 1. Petitioner No. 2, it was alleged, was non-executive director of one PE Ltd. of Mumbai from 2001 till 2005. On 24-9-2004, the Income-tax Officers searched the residence of Petitioner No. 2 in Kolkata and seized some documents and papers. In the course of the search conducted at the residence of Petitioner No. 2, the respondent-Income-tax authorities came to learn that Petitioner No. 2 was a director of the said PE Ltd. Subsequently, the office of the said PE Ltd. of Mumbai was searched and a computer hard disc impounded. Fifteen months after the search and impounding of documents the case of the petitioners were transferred to Mumbai. Held that the affidavit-in-position did not disclose any prima facie finding of nexus of the petitioner-company with PE Ltd. So far as petitioner No.2 was concerned the only nexus was that records impounded revealed that he had been a director of the Mumbai company. There was no finding, even prima facie, of the undisclosed income of petitioner No.…

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