2013 (11) TMI 1756 - HC - Income Tax

Summary

Issues Involved:
1. Legality and validity of the transfer order u/s 127 of the IT Act, 1961.
2. Adequacy of reasons provided for the transfer.
3. Compliance with principles of natural justice.
4. Jurisdiction and authority of the CIT, Ujjain.

Summary:

1. Legality and Validity of the Transfer Order u/s 127 of the IT Act, 1961:
The petitioners challenged the order dated 31st May 2013, passed by the CIT, Ujjain, directing the transfer of their assessment cases from Ratlam to Indore. The respondents argued that the order was issued under s. 127 of the IT Act after issuing proper show-cause notices and providing opportunities for hearing. The court found that the CIT, Ujjain, acted within his jurisdiction and followed due process, making the transfer order legally valid.

2. Adequacy of Reasons Provided for the Transfer:
The petitioners contended that the reasons for the transfer were cryptic and insufficient. The respondents stated that the transfer was for "administrative convenience and facilitating coordinated investigation in the group cases with reference to interlinked documents/transactions." The court held that the reasons provided were adequate and specific, emphasizing that coordinated investigation and administrative convenience are valid grounds for transfer under s. 127.

3. Compliance with Principles of Natural Justice:
The petitioners argued that the transfer order violated principles of natural justice as proper reasons were not recorded, and they were not given a fair hearing. The court noted that exhaustive show-cause notices were issued, and the petitioners were given opportunities to respond. The final order addressed the objections raised by the petitioners, demonstrating compliance with natural justice principles.

4. Jurisdiction and Authority of the CIT, Ujjain:
The petitioners questioned the jurisdiction of the CIT, Ujjain, to pass the transfer order, especially since an earlier order had centralized the cases at Ratlam. The court clarified that the CIT, Ujjain, had the authority to pass the transfer order under s. 127, and the earlier centralization did not bar the issuance of a new order. The court also noted that the transfer was necessary for effective and coordinated investigation, which justified the exercise of jurisdiction by the CIT, Ujjain.

Conclusion:
The court dismissed the writ petition, upholding the transfer order dated 31st May 2013, passed by the CIT, Ujjain, under s. 127 of the IT Act, 1961. The court found that the transfer was legally valid, adequately reasoned, compliant with principles of natural justice, and within the jurisdiction of the CIT, Ujjain. No order as to costs.