2015 (5) TMI 797 - HC - Income Tax

Validity of transfer order - Held that - From the records produced by the respondent, it appears that a notice dated 13.10.2014 was sent to the petitioner at the address recorded in the official register but came back undelivered with the remarks not known . It further appears from the postal envelope containing the said notice that a remark is made as addressee moved . The presumption under Section 27 of the West Bengal General Clauses Act can be raised for due service provided it is correctly addressed, prepaid and dispatched though a postal authorities. It is no doubt that such presumption is rebuttable one and the addressee is to prove before the Court of law that the postal article in fact did not reach to him and not tender by the postal authorities in due course of business. Mere denial does not rebut the presumption. If the stand of the respondent is taken to be true, the responsibility ceases the moment the postal article is despatched by speed post which is correctly addressed and the sufficient stamps required therefor, is paid, the authority losses the control of the said article and it would be presumed that the same has reached to the addressee. This Court can very well raise such presumption unless the materials produced before this Court speaks otherwise. If the order of transfer is passed on 15th November, 2014, there was no occasion to send further notice by jurisdictional Commissioner at Kolkata on 7th January, 2015 and 20th February, 2015. Even if this Court accepts the submission of the respondent authorities that there was no infraction and/or violation of the provisions contained under Section 127 as the notice was dispatched and/or sent to the addressee/ petitioner but the fact remains that the postal articles returned with the postal remarks not known and subsequent letters issued on 7th January, 2015 and 20th February, 2015 gives an adverse indication as there was no reflection of the order of transfer therein. This Court, therefore, finds that a prima facie case has been made out which must be decided after the exchange of affidavits. The respondents are directed to file affidavit-in-opposition within a period of six weeks from date; reply, if any, be filed within one week thereafter.Let this matter appear after seven weeks as For Orders in the supplementary list.

Summary

Issues: Challenge to transfer order under Section 127 of the Income Tax Act, 1961 based on principles of natural justice and communication of order.

Analysis:
The writ petition challenges the transfer order dated 15th November, 2014, transferring all cases of the petitioner to New Delhi under Section 127 of the Income Tax Act, 1961. The petitioner argues that the order is invalid, illegal, and violates natural justice principles as no notice was served before the proceeding, rendering the order invalid under Section 127(ii)(a) of the Act. Reference is made to legal precedents highlighting the importance of communication and reasons for such orders. The respondent contends that a notice was sent to the petitioner, who was aware of the proceedings, and disputes the claim of non-service of notice. The Court notes the authority's power to transfer cases under Section 127, emphasizing the need for a reasonable opportunity of hearing for the assessee. The petitioner's argument of lack of communication and hearing before the final order is addressed, stressing the significance of natural justice principles in legal actions.

The judgment discusses the mandatory nature of recording reasons under Section 127(1) and the requirement of communication to the affected party. Legal precedents are cited to support the necessity of serving notice and providing an opportunity for hearing before passing transfer orders. The Court examines the postal remarks of 'not known' on returned notices and the implications for service validity. The rebuttable presumption of due service under the West Bengal General Clauses Act is explained, emphasizing the burden on the addressee to prove non-receipt of postal articles. The Court evaluates the subsequent letters sent by the jurisdictional Commissioner and their lack of reference to the transfer order, raising doubts about proper communication.

A prima facie case is acknowledged, necessitating further affidavits exchange for a final decision. The respondents are directed to submit an affidavit-in-opposition within six weeks, with a reply due within one week thereafter. A stay is ordered on the operation of the impugned order until eight weeks from the date or until further notice. The matter is scheduled to appear for orders in the supplementary list after seven weeks, indicating the procedural steps to be followed in the case.