2007 (2) TMI 640 - HC - Income Tax

Summary

Issues Involved:
1. Legality of the transfer order dated 4-1-2007.
2. Compliance with principles of natural justice.
3. Authority and jurisdiction under section 127 of the Income-tax Act, 1961.

Summary:

1. Legality of the transfer order dated 4-1-2007:
The petitioner, M/s. Rimjhim Ispat Ltd., challenged the transfer order dated 4-1-2007 issued u/s 127 of the Income-tax Act, 1961, transferring its assessment cases from Kanpur to New Delhi. The petitioner argued that the notice dated 10-11-2006 did not disclose the reasons for the proposed transfer, and the order was passed mechanically without independent application of mind by the respondent No. 1, who allegedly acted on the dictates of the Commissioner of Income-tax (Central)-III, Delhi.

2. Compliance with principles of natural justice:
The petitioner contended that the lack of specific reasons in the notice deprived it of a fair opportunity to contest the transfer. The Court, however, found that the notice did provide brief reasons for the transfer, namely, the search conducted at the premises of M/s. Radico Khaitan Ltd. and the need for coordinated investigation and meaningful assessment. The petitioner was given an opportunity to respond, and its objections were considered by the Commissioner of Income-tax, Kanpur.

3. Authority and jurisdiction under section 127 of the Income-tax Act, 1961:
The Court examined the jurisdictional authority under sections 120 and 127 of the Income-tax Act. It held that the power to transfer cases is vested in the authorities, and the requirement of reasonable opportunity and recording of reasons was met in this case. The Court referenced several precedents, including *Pannalal Binjraj v. Union of India* and *Ajantha Industries v. CBDT*, to affirm that the transfer order did not materially infringe on the petitioner's rights and was not arbitrary or based on irrelevant considerations.

Conclusion:
The Court concluded that the principles of natural justice were complied with, and the transfer order was legally valid. The writ petition was dismissed in limine.