2021 (9) TMI 563 - HC - Income Tax

Transfer of case u/s 127 - petitioner has challenged the impugned action of transfer of his income tax file from Principal Commissioner of Income Tax-II Kolkata to Deputy Commissioner of Income Tax, Central Circle 19, New Delhi - Petitioner submits that without considering and disposing the aforesaid letters/representations and without communication of the formal order of disposal and/or rejection of the petitioner s prayer made in the aforesaid letters such decision of transfer was taken and even such order of transfer has not been communicated to the petitioner and after about eighteen months from his second letter dated 3rd October, 2019, petitioner came to know from the official portal of income tax on 17th July, 2021 that his case has been transferred from Kolkata to Delhi - HELD THAT - Considering the submission of the parties, respondents are directed to produce the record particularly with regard to the receipt of the letter dated 18th September, 2019 and fate or decision of the respondents income tax authority on the petitioner s letter dated 18th September, 2019 and 3rd October, 2019 as to whether the same was considered and disposed of or rejected and whether such decision was communicated to the petitioner before taking any final decision of the transfer of the case of the petitioner and whether formal order of transfer was communicated to the petitioner. The respondents shall produce the relevant record in the aforesaid regard on 20th September, 2021 and petitioner will also come up with sufficient document to show as to how the letter dated 18th September, 2019 was sent or served on the respondents concerned. List this matter on 20th September, 2021

Summary

Issues:
Challenge to transfer of income tax file under Section 127 of the Income Tax Act, 1961 without proper communication and consideration of petitioner's responses.

Analysis:
The petitioner challenged the transfer of his income tax file from Kolkata to New Delhi under Section 127 of the Income Tax Act, 1961, after discovering it on the income tax portal on 17th July, 2021. The petitioner had received a show-cause notice on 5th September, 2019, regarding the transfer, to which he responded by denying the allegations and requesting time to submit a detailed reply due to his unavailability in Kolkata. Despite sending follow-up letters on 18th September, 2019, and 3rd October, 2019, the petitioner received no response from the income tax authority. The petitioner only became aware of the transfer on 17th July, 2021, without any formal communication from the authorities. The court directed the respondents to produce records regarding the receipt and consideration of the petitioner's letters dated 18th September, 2019, and 3rd October, 2019, before making a final decision on the transfer. The court also instructed the petitioner to provide evidence of how the letter dated 18th September, 2019, was served on the respondents, setting a further hearing for 20th September, 2021.

This case highlights the importance of procedural fairness and communication in administrative actions such as the transfer of income tax files. The petitioner's right to be heard and to receive a response to his representations before a decision is made on the transfer is crucial in maintaining transparency and fairness in such processes. The court's direction for the respondents to produce records and clarify the fate of the petitioner's letters emphasizes the need for authorities to follow due process and provide reasons for their decisions, especially when they impact individuals' rights and interests. The case underscores the significance of effective communication and adherence to procedural requirements in administrative actions to uphold principles of natural justice and ensure accountability in decision-making processes.