1984 (11) TMI 21 - HC - Income Tax

Summary

Issues involved:
The issues involved in the judgment are the transfer of income-tax cases from one jurisdiction to another u/s 127 of the Income-tax Act, 1961 without proper communication of reasons and violation of principles of natural justice.

Details of the Judgment:

Issue 1: Lack of Communication of Reasons for Transfer
The petitioner filed a petition u/s 127 of the Income-tax Act, 1961, challenging the transfer of income-tax cases from Ujjain to Gwalior without proper communication of reasons. The petitioner argued that no reasons for transfer were communicated to him, and the vague mention of "detailed and co-ordinated investigation" was insufficient. The court noted that under section 127(1), it is mandatory to record and communicate reasons for transfer, citing precedents like Pannalal Binjraj v. Union of India and Ajantha Industries v. Central Board of Direct Taxes. The court held that non-communication of reasons invalidated the transfer order, quashing it and ruling that the Gwalior Income-tax Officer had no jurisdiction.

Issue 2: Lack of Opportunity and Jurisdiction
The petitioner contended that he was not given an adequate opportunity to present his case before the transfer, and the Gwalior Income-tax Officer had no jurisdiction over his cases. The court emphasized the necessity of a reasonable opportunity for the assessee to be heard before a transfer, as established in Sagarmal Spinning and Weaving Mills Ltd. v. CBDT. It was held that without proper opportunity and recording of reasons, the transfer order was unjustifiable, leading to its quashing and setting aside.

Conclusion:
The court allowed the petition, emphasizing the importance of following principles of natural justice and providing reasons for transfers u/s 127 of the Income-tax Act, 1961. The transfer of cases from Ujjain to Gwalior was deemed invalid due to lack of communication of reasons, inadequate opportunity for the petitioner, and absence of jurisdiction of the Gwalior Income-tax Officer. The court ruled in favor of the petitioner, setting aside the transfer order and holding that the Gwalior Income-tax Officer lacked jurisdiction to decide the cases.