Calcutta High Court rejects plea by Kamal Nath challenging transfer of IT proceedings from Kolkata to Delhi

In a setback to senior Congress leader and former Madhya Pradesh Chief Minister Kamal Nath, the Calcutta High Court Friday upheld the decision of the Income Tax department to transfer proceedings against Nath from Kolkata to New Delhi [Kamal Nath vs Principal Commissioner of Income Tax, Kolkata]..The proceedings were initiated against him in relation to 'cash transactions' worth ₹20 crore made during the election season in April 2019Single-judge Justice Shekhar B Saraf while dismissing the plea filed by Nath challenging the transfer of the proceedings, said the 'revenue interest' weighs more than his 'inconvenience.'"The petitioner is a highly influential person with significant presence in Delhi including an official residence and bank accounts. While his inconvenience would have anyway been overshadowed by the revenue interest in the facts of this case, it would be pertinent to mention the lack of any inconvenience whatsoever," the bench said while dismissing his plea.In his order, the judge said that the summons served to Nath asking him to appear before the IT office in New Delhi and not in Kolkata, was not based only on surmises and conjectures as it was evident that his name has been taken by some of the persons on whom investigation, search and survey was carried out. "Furthermore, the statement of certain persons also indicates that there was transfer of cash to the tune of almost ₹20 crores from his residence at Delhi. This money trail raises suspicion. Even though the said cash has been shown in the books of the All India Congress Committee, the source of the funds from the Madhya Pradesh Congress Committee is required to be looked into by the tax authorities," the Court highlighted..The IT department had raided several persons along with Nath in April 2019. The raids were carried out in New Delhi, Madhya Pradesh and also in Kolkata. The tax authorities purportedly found certain materials which indicated Nath's nexus with five persons, his aides, who were involved in large scale collection of alleged illegal money. The authorities, thus desired to centralise Nath's assessment and issued a notice to him in September, to which he filed a detailed response denying the allegations.Subsequently, in February 2021, the IT officers issued summons to Nath without considering his reply. The said summons was challenged before the Calcutta High Court, which quashed the same by an order passed in January 2022 observing that the authorities failed to comply with Section 127 of the IT Act, which lays down a procedure to be followed to transfer proceedings from one divisional office to the other.After this, the authorities again issued fresh summons to Nath, which he questioned before the bench of Justice Saraf..The judge said that the "unaccounted cash transactions" were clearly made out from the WhatsApp chats and accompanying documents obtained from several persons wherein the term "KN" has been referred to. "These persons were either known to the petitioner or were his associates, who seem to be extremely close to the petitioner. Thus, it is clear that the present transfer is based on cogent material that requires further investigation by the tax authorities," the single-judge held. Thus, it would be incontestable and sufficient to conclude that as long as cogent materials are present, the transfer that has been sought cannot be held to be mala fide or based on extraneous circumstances, the Court said.."There is enough material garnered from other persons to establish a nexus, concrete enough to seize the judicial hands of this court from entering into the realm of reasonable executive discretion. In the present case, I find that the Impugned Order is unimpeachable and has been done so after following the principles established in law," the judge said.With these observations, the Court dismissed the plea..Senior Advocates Dr AM Singhvi and JP Khaitan along with advocates Varun Chopra, Saurabh Bagaria, Amit Agarwalla and Aniruddha Agarwalla appeared for the Petitioner.Solicitor General Tushar Mehta along with additional solicitor general Balbir Singh along with advocates Zoheb Hossain, Dhiraj Trivedi, Tilak Mitra and Soumen Bhattacharjee represented the IT Dept..[Read Order]