Punjab & Haryana High Court Upholds Transfer Of Income Tax Assessment Jurisdiction From Chandigarh To Goa, Says It Is In Public Interest
The Punjab & Haryana High Court has dismissed a writ petition challenging the transfer of income tax assessment jurisdiction from Chandigarh to Panaji, Goa, holding that the Revenue authorities acted within their powers under Section 127(2) of the Income Tax Act, 1961 and that the transfer was justified in public interest to facilitate coordinated investigation.
Justice Deepak Sibal and Justice Lapita Banerji said, "absence of allegations of mala fide on the respondent's part the transfer of the petitioner's assessment jurisdiction from Chandigarh to Goa has been exercised by the revenue for its administrative convenience; to facilitate effective investigation and coordinated assessment; for efficient collection of tax and in public interest. Prior thereto, principles of natural justice were duly followed and that the transfer order also contains adequate and acceptable reasons."
Speaking for the bench Justice Sibal explained that, "therefore, in the exercise of our discretionary jurisdiction under Article 226 of the Indian Constitution, we are not inclined to interfere with the impugned order especially at the petitioner's behest who is suspected to be involved in dubious transactions and more so when it is the unrebutted case of the respondent revenue that in the present era of technological advancement, where the proceedings against the petitioner at Goa are normally going to take place digitally, he shall also not be put to much inconvenience and hardship. In any case, the petitioner's interest would be subservient to public interest."
Background
The petitioner assailed an order dated 08.09.2025 passed by the Principal Commissioner of Income Tax, Chandigarh-I, transferring his assessment jurisdiction from DCIT Circle I(1), Chandigarh to ACIT/DCIT, Central Circle, Panaji, under Section 127(2) of the 1961 Act.
The transfer stemmed from search and survey proceedings conducted in January 2025 under Sections 132 and 133A at the premises of M/s Blue Ocean Beverages Pvt. Ltd., Panaji, Goa, and its group entities. During the course of these proceedings, M/s Aaroha Alcobev Distribution Pvt. Ltd., New Delhi, a key distributor of Blue Ocean, was also surveyed.
The Revenue claimed that incriminating material surfaced during the survey at Aaroha's premises, revealing that the petitioner had allegedly received ₹10 crore in undisclosed cash from Gaurav Sharma in connection with the sale of M/s Queen Distillers and Bottlers Pvt. Ltd., Chandigarh.
Proceedings Before the Tax Authorities
Based on the material collected, the petitioner was issued summons under Section 131(1A) and appeared before the Investigation Wing at Panaji. Thereafter, a show-cause notice dated 08.07.2025 was issued under Section 127(2), proposing centralisation of his assessment at Panaji.
The petitioner objected to the transfer, sought supply of documents relied upon by the Revenue, and requested a personal hearing. A further hearing was granted on 26.08.2025, where detailed objections were filed through his Chartered Accountant, alleging lack of nexus with M/s Blue Ocean, absence of evidence of any cash transaction, and undue hardship due to the proposed transfer.
Rejecting these objections, the PCIT, Chandigarh-I passed the impugned order, observing that the petitioner's alleged undisclosed cash transactions were interlinked with the broader investigation into manipulation of accounts and fraud involving M/s Blue Ocean and its distributor network. It was further noted that in the era of digital assessments, the plea of inconvenience carried little weight.
Petitioner's Case Before the High Court
Senior counsel for the petitioner argued that even if undisclosed cash was received in the sale of Queen Distillers, it had no nexus with M/s Blue Ocean, Goa;
The alleged transaction could be independently examined at Chandigarh;
Other persons involved, including M/s Aaroha, Gaurav Sharma, and Lokesh Saran, continued to be assessed elsewhere, making the petitioner's case discriminatory;
As per Section 158BD, any incriminating material found should have been forwarded to the petitioner's Assessing Officer at Chandigarh instead of transferring jurisdiction; and
It was submitted CBDT Circulars dated 24.08.2009 and 11.02.2013 prohibit routine centralisation without establishing a clear link.
Reliance was placed on several judicial precedents, including Ajantha Industries, Anuben Lalabhai Bharwad, and RSG Foods Pvt. Ltd.
Revenue's Stand
The Revenue countered that whatsApp chats and statements of Lokesh Saran, Managing Director of M/s Aaroha, revealed that he oversaw the sale of Queen Distillers and was aware of the alleged ₹10 crore cash payment to the petitioner;
Lokesh Saran had a vested financial interest in the transaction and subsequently acquired distribution rights of Queen Distillers' products;
Jurisdiction over M/s Aaroha had already been transferred to Panaji, and cases of Lokesh Saran and Gaurav Sharma were also being centralised there;
The impugned order was administrative, reasoned, and passed after following principles of natural justice, and hence not open to interference under Article 226.
Court's Analysis
The Bench examined Sections 124 and 127 of the Income Tax Act and the law laid down by the Supreme Court in Pannalal Binjraj, Kashiram Agarwala, and Ajantha Industries, reiterating that transfer of assessment jurisdiction is a machinery provision meant for administrative convenience, effective investigation, and coordinated assessment.
The Court noted that the petitioner was granted adequate opportunity of hearing and the impugned order was a speaking order;
There was sufficient material linking the petitioner's alleged undisclosed cash transaction with entities whose assessments were being centralised at Goa;
The plea of hardship was unpersuasive, particularly as proceedings are largely digital; and no allegation of mala fides had been levelled against the Revenue.
Distinguishing the judgments relied upon by the petitioner, the Court held that unlike those cases, a clear nexus had been established here between the petitioner and the wider investigation involving M/s Blue Ocean and its distributors.
On the argument based on Section 158BD, the Court clarified that forwarding of material to the existing Assessing Officer is not mandatory where the Revenue, in bona fide exercise of power under Section 127, finds it appropriate to centralise assessment of interconnected entities at one place.
Conclusion
Holding that the transfer was made in public interest, for administrative convenience, and to ensure effective and coordinated investigation, the High Court declined to interfere with the order dated 08.09.2025.
The writ petition was accordingly dismissed, with the Court observing that the petitioner's individual inconvenience must yield to larger public interest in effective tax administration.
Ms. Radhika Suri, Senior Advocate with Mr. Abhinav Narang, Advocate and
Ms. Parnika Singla, Advocate, for the petitioner.
Ms. Urvashi Dhugga, Senior Standing Counsel,
Mr. Vidul Kapoor, Junior Standing Counsel and Ms. Kavita, Advocate, for the Income Tax Department.
Ms. Ameera Abdul Razak, Standing Counsel, for respondent No.2 (through Video Conferencing).