2009 (3) TMI 507 - HC - Income Tax

Transfer of case- Search and Seizure operation was carried out u/s 132(1) of the Act. in the business as well as the residential premises of the R group of case and the assessee s case was covered in the group. In order to centralize the entire group of cases and for co-ordinated investigation and assessment the assessee s case was transferred from Parulia to ranchi. Held that- though section 127 postulates that the assessee should be given reasonable opportunity of being heard no opportunity was granted to the assessee. No cause had been shown for denial of such opportunity the written objection furnished by the assessee was not dealt with. The order of transfer had been passed in the mechanical manner therefore the notice and the order of transfer could not be sustained and were to be set aside.

Summary

Issues:
Challenge to notice proposing transfer of income-tax file and order transferring the file without reasons and hearing.

Analysis:
The petitioner challenged a notice dated July 21, 2008, proposing the transfer of the income-tax file from one jurisdiction to another without providing reasons for the transfer. The petitioner argued that the notice should mention reasons to enable effective representation. Additionally, the order dated January 28, 2009, transferring the file did not grant a personal hearing as required by section 127 of the Income-tax Act, 1961, and did not address the written objection filed by the petitioner on July 23, 2008. The petitioner's objections were based on practical difficulties and lack of connections to the new jurisdiction. The respondents contended that their actions were justified.

The notice proposing the transfer mentioned centralizing cases for coordinated investigation and assessment without specifying detailed reasons for the transfer. The petitioner responded with objections citing personal circumstances, residence, business connections, and practical difficulties in complying with notices in the new jurisdiction. The impugned order transferring the file did not provide a reasonable opportunity for the petitioner to be heard, did not address the objections raised, and appeared to be passed mechanically. The court found the lack of a comprehensive reason for transfer and failure to grant a hearing unacceptable, leading to the notice and order being set aside and quashed.

The judgment allowed the writ petition, setting aside the notice and order, but permitted the respondents to take appropriate steps in accordance with the law. The court clarified that the disposal of the petition at the admission stage did not imply admission of the allegations made by the petitioner. No costs were awarded, and certified copies of the order were to be provided promptly to the parties upon request.