The Himachal Pradesh high court on Friday admitted a petition by chief minister Virbhadra Singh against the notice of the income tax department transferring his cases from Shimla to Chandigarh.
A division bench of justices Rajiv Sharma and Sureshwar Thakur passed these orders on petitions of Singh and his family members.
The court also made absolute ad interim stay on the April 1 notice of the income tax department, observing that a reasonable opportunity of being heard in the matter granted to the assessee must be effective and not a mere formality.
"The order must contain specific reasons after taking into consideration the factual matrix. Merely stating that the transfer is for the purpose of coordinating in itself is not a ground for consolidating the cases at one place. The cause of action has arisen in Himachal and the convenience of the party cannot be overlooked," it noted.
The income tax commissioner, in his earlier order, said the agricultural income of Virbhadra Singh and his family had dramatically increased in the revised return, which was an apparent attempt to justify the investments made in the purchase of insurance policies.
The assessees had close relations and business dealings among themselves and with businessman Vakamulla Chandrashekhar and his company Tarini Infrastructure Ltd., which require coordinated and joint investigations in all cases.
He transferred all the cases to deputy commissioner of income tax of central circle in Chandigarh, saying that centralisation of cases would enable the department to conduct focused, synchronized and coordinated investigation.