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Issues involved: Challenge to order u/s 127(1)/127(2) of the Income-tax Act transferring cases from Calcutta to Patna without reasonable opportunity of hearing.
Summary: The writ applications challenged orders transferring cases u/s 127 of the Income-tax Act from Calcutta to Patna, alleging denial of reasonable opportunity of hearing. While the petitioners were issued show-cause notices and heard, they contended that non-disclosure of reasons in the notice violated principles of natural justice. The court considered the requirement of giving a reasonable opportunity of being heard before transferring a case, emphasizing the need for disclosing reasons to enable effective representation. The court cited precedents and held that failure to indicate reasons in the show-cause notice amounted to denial of a fair hearing, vitiating the entire proceeding. The court set aside the impugned order, allowing the respondents to proceed afresh after indicating grounds for transfer in show-cause notices. The judgment applies to multiple related cases, and no costs were awarded. The court emphasized that the requirement of giving a reasonable opportunity of hearing before transferring a case is mandatory under section 127 of the Act. The court held that failure to disclose reasons for transfer in the show-cause notice denied the petitioner an effective opportunity to object, rendering the proceeding invalid. The court noted that even though the petitioner responded to the notice and was heard, the absence of disclosed reasons in the notice was a critical flaw. The court referenced Supreme Court and High Court decisions, highlighting the necessity of recording reasons for transfer and providing a clear opportunity for the assessee to make representations. The court held that failure to disclose reasons in the show-cause notice hindered the petitioner's ability to object effectively, violating the principles of natural justice. The court stressed that the assessee must know the grounds for transfer to present meaningful objections. The court concluded that the denial of a reasonable opportunity of hearing due to non-disclosure of reasons in the show-cause notice invalidated the proceeding. The court allowed the respondents to proceed afresh, emphasizing the need to disclose grounds for transfer in show-cause notices for effective representation. The judgment applies to multiple related cases, and no costs were awarded.
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