1965 (3) TMI 11 - HC - Income Tax

Opportunity to be heard is not required to be given to assessee before ordering transfer of cases

Summary

Issues:
1. Jurisdiction of the Income-tax Officer in assessing the petitioner.
2. Validity of transfer orders without providing an opportunity of being heard.

Detailed Analysis:

Issue 1: Jurisdiction of the Income-tax Officer
The petitioner alleged that the Income-tax Officer from Bombay had no jurisdiction to assess him as he was a permanent resident of Trivandrum and had ceased business activities after 1953. The petitioner had written to the Income-tax Officer stating he had no taxable income and was living a retired life in Trivandrum. The petitioner contended that the transfer orders transferring his cases from Ernakulam to Bombay were invalid due to lack of jurisdiction. However, the Income-tax Officer later withdrew the notices for assessment years 1957-58 and 1959-60. The petitioner moved a petition in the Kerala High Court challenging the jurisdiction of the Bombay Income-tax Officer, which was dismissed after the Central Board of Revenue informed the petitioner that the transfer orders had been withdrawn.

Issue 2: Validity of transfer orders without opportunity of being heard
The petitioner's counsel contended that the transfer orders were made before an amendment to section 5(7A) of the Indian Income-tax Act in 1956, and thus, the orders were invalid. The counsel argued that the orders were passed without giving the petitioner an opportunity to be heard, citing previous Supreme Court judgments emphasizing the importance of natural justice and providing a hearing before transferring cases. However, the court disagreed with the petitioner's contentions, stating that the retrospective amendment to section 5(7A) validated the transfer orders. The court noted that while providing an opportunity to be heard is advisable, the absence of such an opportunity did not render the orders invalid. The court highlighted that the Income-tax Act of 1961 included provisions for being heard in certain cases, but the lack of a hearing did not vitiate the impugned orders in this case.

In conclusion, the court dismissed the petition, ruling against the petitioner on both issues. The court held that the retrospective amendment validated the transfer orders, and the absence of a hearing did not render the orders invalid. The court emphasized the importance of providing an opportunity to be heard but stated that the lack of such an opportunity did not affect the validity of the transfer orders in this case.