The Madras High Court has refused to interfere with a decision taken by the Income Tax (I-T) department to transfer the proceedings initiated against lottery baron Santiago Martin’s wife Leema Rose Martin and daughter Daisy Martin Aadhav Arjuna from Coimbatore to Kolkata.
Justice Krishnan Ramasamy dismissed the writ petitions filed by them as well as Suvali Real Properties LLP against a notification issued by the Principal Commissioner of Income Tax in Coimbatore on April 25, 2024 for transferring their assessment proceedings to the central circle at Kolkata.
Questioning the transfer, the petitioners had contended that they do not carry any business within the jurisdiction of the Kolkata central circle and therefore, the proceedings initiated against them ought not to have been transferred without even hearing them in person.
However, senior standing counsel for I-T department B. Ramaswamy told the court that the petitioners had been carrying on lottery business in Kolkata, Nagaland, Sikkim, Assam and many other North Eastern States and that the I-T department had seized several incriminating materials during the October 2023 raid.
It was brought to the notice of the court that the search and seizure operation was carried out by the officers under the control of Principal Director of Income Tax (Investigation) in Kolkata and therefore the latter had made a request to the Coimbatore office to centralise the proceedings against the petitioners.
On receipt of such request, the Coimbatore office issued show cause notices to the petitioners seeking explanation as to why their assessment proceedings should not be transferred. The petitioners submitted their written replies in December 2023 but did not appear in person on January 2, 2024 despite being given an opportunity.
Since the petitioners did not avail of the opportunity of personal hearing, the department had gone ahead and transferred the proceedings to Kolkata after rejecting the objections raised by them, to such a transfer, in the written replies submitted to the show cause notices, Mr. Ramaswamy told the court.
After recording his submissions, Justice Ramasamy said the petitioners appeared to have objected to the transfer by citing various reasons including their inability to travel frequently to Kolkata since it would affect their personal and official commitments and the higher cost of litigation over there.
He said though the petitioners had their registered office in Coimbatore, they appeared to have a place of business, directly or indirectly, in Kolkata too. Further, the seizure of the incriminating documents, linking the petitioners with the lottery business, had been made only by the Kolkata central circle.
Therefore, it would only be appropriate for the Kolkata central circle to continue the assessment proceedings, irrespective of the location of the petitioners’ registered office, the judge said. He also said the I-T sleuths in Coimbatore may not be able to deal with the issue effectively when the seizures had been made in Kolkata.
Published - September 16, 2024 09:22 pm IST
