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Issues:
1. Transfer of cases under section 127 of the Income-tax Act, 1961 without providing reasons. 2. Jurisdiction of the Commissioner to transfer cases to an Assessing Officer outside his area. 3. Compliance with mandatory requirements of section 127 for transferring cases. 4. Quashing of transfer orders due to lack of reasons and jurisdiction. Analysis: Issue 1: Transfer of cases without providing reasons The judgment addresses the transfer of cases under section 127 of the Income-tax Act, 1961 without providing reasons. The petitioner argued that the transfer order was arbitrary and lacked justification, violating principles of natural justice. The court highlighted the mandatory requirement of recording reasons for transfer under section 127, citing precedents like Y. Moideen Kunhi and Co. v. ITO and Anil Mittal v. Chief CIT, where orders were set aside due to the absence of stated reasons in the transfer orders. Issue 2: Jurisdiction of the Commissioner to transfer cases The petitioner contended that the Commissioner of Jaipur did not have the authority to transfer cases to Cuttack, as the Assessing Officer in Cuttack was not subordinate to the Commissioner. The court emphasized that the Commissioner could only transfer cases to Assessing Officers subordinate to him, as per the provisions of section 127(1) of the Act. The judgment highlighted the role of the Director-General in transferring cases outside the Commissioner's jurisdiction. Issue 3: Compliance with mandatory requirements of section 127 The judgment stressed the importance of complying with the mandatory requirements of section 127 for transferring cases. It referenced cases where transfers within the same city/locality did not require a show cause opportunity, but transfers outside the city needed proper justification to counter tax evasion or similar reasons. The court emphasized the necessity of notifying affected parties of the reasons for transfer and ensuring that the order communicated contained the reasons for the transfer. Issue 4: Quashing of transfer orders Due to the lack of reasons in the transfer order and the Commissioner's unauthorized transfer of cases outside his jurisdiction, the court quashed the transfer orders. The judgment highlighted that the transfer to Cuttack was unjustified, especially considering the long-standing assessment of the petitioners at Jaipur. The court deemed the transfer orders unsustainable in law and imposed costs on the cases for quashing the transfers. This detailed analysis of the judgment showcases the court's scrutiny of the transfer orders under section 127 of the Income-tax Act, emphasizing the necessity of providing reasons, jurisdictional limitations, and compliance with mandatory requirements for transferring cases.
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