2008 (11) TMI 177 - HC - Income Tax

Change in Jurisdiction Section 127 Opportunity of being heard - Files Transferred from Kolkata to Ranchi Assessee raised the objection From the order impugned at appeared the department considered the written objection. consideration means taking into account and dealing with the materials on record leading to a decision. However, the order impugned is silent how the replies and enclosures on record were considered. Therefore, the logical conclusion would be that the materials on record were not considered at all. Further, section 127 of the Act postulates that the assessee should be given a reasonable opportunity of being - Held that the order impugned passed under section 127 of the Act cannot be sustained and is, thus, set aside and quashed. The writ petition is allowed. Department directed to proceed afresh in accordance with law after giving the petitioner an opportunity of hearing on the basis of materials already on record.

Summary

Issues:
Challenge to order under section 127 of the Income-tax Act, 1961 transferring file from Kolkata to Ranchi without opportunity of hearing and consideration of written objections.

Analysis:
The petitioner challenged the order under section 127 of the Income-tax Act, 1961, transferring the file from Kolkata to Ranchi, citing lack of opportunity for a hearing and non-consideration of written objections. The respondent argued that personal hearing is not mandatory as per the Madhya Pradesh Industries Ltd. case and written objections suffice. The order detailed the reasons for transfer post search operations, assessees' objections, and subsequent communications. The Commissioner transferred the cases citing coordinated investigation interests, despite objections of practical inconvenience by assessees. The order emphasized the Revenue's duty to provide a reasonable opportunity of being heard to the assessee. The court found the absence of a hearing opportunity for the petitioner, breaching section 127 provisions, and set aside the order, directing a fresh proceeding with a hearing opportunity.

This detailed judgment highlights the importance of providing an opportunity for a hearing to the assessee before transferring cases under section 127 of the Income-tax Act, 1961. It emphasizes the need for considering written objections and materials on record while making such decisions, ensuring compliance with the principles of natural justice and statutory provisions. The court's decision to quash the order due to the lack of a hearing opportunity showcases the significance of procedural fairness and adherence to legal requirements in administrative actions under tax laws.