Delhi High Court Rejects Pleas Of Gandhi Family Against IT Department’s Decision Of Transferring Assessments To Central Circle

The Delhi High Court has dismissed petitions filed by the Congress leaders i.e., Sonia Gandhi, Rahul Gandhi, and Priyanka Gandhi Vadra against the decision of the Income Tax department to transfer their assessments to the Central Circle.

There were also separate petitions filed by Sanjay Gandhi Memorial Trust, Jawahar Bhawan Trust, Rajiv Gandhi Foundation, Rajiv Gandhi Charitable Trust, Young Indian, and the Aam Aadmi Party, raising similar legal issues on such a transfer.

A Division Bench of Justice Manmohan and Justice Dinesh Kumar Sharma said, "This Court is of the view that the assessments of the petitioners have been transferred to the Central Circle in accordance with law by way of the impugned orders passed under Section 127 of the (IT) Act. Accordingly, the present writ petitions along with pending applications are dismissed, without any order as to costs and the interim orders passed by this Court stand vacated.”

The Bench clarified that it has not examined the controversy between the parties on merits and that they shall be at liberty to raise all their contentions and submissions before the concerned statutory authorities.

Senior Advocate Arvind Datar and Advocate Kavita Jha represented the petitioner while SG Tushar Mehta, ASG Balbir Singh, Standing Counsel Zoheb Hossain, and Advocate Vipul Agrawal represented the respondents.

In this case, the Gandhi family had challenged the order passed in 2021 issued by the Principal Commissioner (Income Tax) to transfer their cases for the assessment year 2018-19 to the Central Circle. The Central Circles, which are mandated to check tax evasion, take over the evidence gathered by IT's investigation wing during searches.

The primary issue that arose for consideration before the Court was whether the assessments of the petitioners could be transferred to the Central Circle by way of the impugned orders passed under Section 127 of the Income Tax Act, 1961 without the sanction of the Central Board of Direct Taxes (‘CBDT’).

The High Court after hearing the contentions of the counsel noted, "Undoubtedly, there can be no 'guilt by association' or 'guilt due to relationship', yet in the present batch of writ petitions, the assessments of the petitioners have been transferred only for the purposes of coordinated investigation. … Transfer in the present batch of writ petitions would also not be violative of the guidelines issued by the CBDT, as the transfers according to the counter affidavit have taken place for the purposes of better coordination and meaningful assessment of the present cases either with those of Sh.Robert Vadra [the husband of the petitioner in W.P.(C) No.4083 of 2021] and Sh.Sanjay Bhandari and Satyendar Kumar Jain, Member of AAP and former Cabinet Minister in Govt. of Delhi.”

The Court further observed that the Central Circle's jurisdiction is not confined to search cases and no assessee has any fundamental or vested legal right to be assessed by a faceless assessing officer.

"Central Circle jurisdiction is not confined to search cases only. Central Charge is also conferred with jurisdiction over non-search case where coordinated investigation is required. The Circular dated 25th April, 2014 makes it clear that there is no restriction upon transferring of non-search cases to Central Circle”, said the Court.

The Court also said the argument that the power of transfer under the notifications is a two-step process is untenable in law.

“Even under the Central Charges, the assessment proceedings are conducted through the e-proceeding functionality, and as such, the assessee or its authorised representative would not be bound to physically appear before the Assessing Officer on each date of hearing. In view of the above, no prejudice shall be caused to the assessees on account of their cases being transferred to the Central Circle”, noted the Court.

Accordingly, the Court dismissed the pleas.

Cause Title- Sanjay Gandhi Memorial Trust v. Commissioner of Income Tax (Exemption) & Ors. (Neutral Citation: 2023:DHC:3707-DB)

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