Chennai: The Madras high Court directed the income tax department to produce records relating to an order which transferred the proceedings pending against Advantage Strategic Consulting Private Limited, in which Karti Chidambaram, son of former Union finance minister P. Chidambaram is allegedly associated, from one assessing officer to another.
The First Bench comprising Chief Justice Indira Banerjee and Justice R. Hemalatha gave the directive on an appeal filed by Advantage Strategic Consulting Private Limited, challenging an order of the single judge, dismissing its petition, which challenged a notification of the Principal Commissioner of Income Tax. By virtue of the notification, cases against the firm had been transferred from the DCIT, Corporate Circle-1 (1) to DCIT, Central Circle-2 (1) in Chennai.
Posting to January 3, further hearing of the appeal, the bench said that any action taken in the meanwhile will abide by the result of the appeal.
According to the appellant firm, it holds only 0.1 percent of shares in Vasan Health Care Private Limited and has no representation on the board and no nexus with it. Yet the IT department issued the transfer order under section 127 of the IT Act, with the object of centralizing the files of the appellant company with Vasan Group and for a co-ordinated investigation with the Vasan Group to prevent leakage of revenue. Holding that there were provisions in sub-sections (2) and (3), the single judge had erroneously held that there was no need to provide a reasonable opportunity to the company before ordering the transfer, the appellant added.
The appellant contended that if the impugned 2016 notification was allowed to be in force, its file would be centralized with that of Vasan Group and the central circle assessing officer will assume jurisdiction over its case.
The facts relating to Vasan Group will be unnecessarily imported into its case and its assessment will be subjected to unnecessary scrutiny, causing grave prejudice to it.
The appellant firm was in no way connected with Vasan Group which was facing a ‘search and seizure case’, the appellant added.
