2006 (5) TMI 66 - HC - Income Tax

Transfer of case - It is not in dispute that no notice of the proposed transfer order was ever issued to the petitioner nor any objections invited from it. The order does not even enumerate the reasons which made it necessary to transfer the assessment proceedings from Delhi to Meerut. That a notice ought to go to the assessee and the order of transfer ought to disclose proper application of mind to the objections which the assessee may have raised is fairly well-settled. Inasmuch as both these requirements have failed in the instant case, the transfer of proceedings from Delhi to Meerut is rendered unsustainable. - we allow this writ petition, quash the order passed by the respondent

Summary

Issues:
1. Correctness of order transferring income-tax assessment proceedings from Delhi to Meerut without notice or reasons provided to the petitioner.

Detailed Analysis:
The judgment in this case revolves around the correctness of an order transferring income-tax assessment proceedings from Delhi to Meerut without issuing any notice or providing reasons to the petitioner. The petitioner challenged the order dated August 5, 2005, as amended by a corrigendum dated August 17, 2005, passed by the respondent under section 127(2) of the Income-tax Act, 1961. It was highlighted that the transfer order lacked essential procedural safeguards as no notice was issued to the petitioner, and the reasons for the transfer were not disclosed. The court emphasized that the assessee should be notified of such transfers and the order should demonstrate a proper application of mind to any objections raised by the assessee. As these requirements were not met in this case, the transfer of proceedings to Meerut was deemed unsustainable.

The respondent's counsel suggested that a fresh order could be made after hearing the petitioner's objections to rectify the procedural irregularities. It was proposed that the petitioner should appear before the Commissioner to receive a show-cause notice and file a reply, thus avoiding unnecessary delays in issuing a formal notice. The court accepted this proposal and allowed the writ petition, thereby annulling the original order and directing the petitioner to appear before the Commissioner on a specified date to receive the show-cause notice. The petitioner was granted the opportunity to submit objections, and the Commissioner was authorized to issue a fresh order in compliance with the law after considering the objections filed by the petitioner.

In conclusion, the court ruled in favor of the petitioner, quashing the initial order transferring the assessment proceedings and providing a procedural framework for addressing the objections raised by the petitioner. The judgment emphasized the importance of adhering to due process and ensuring that the assessee is given a fair opportunity to present their objections before any transfer of proceedings is finalized. The parties were directed to bear their own costs in the matter, bringing the legal proceedings to a close.