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TMI Blog2012 (4) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... oners' case from Vapi to Surat "to facilitate coordinated and effective investigation" under Section 127(2) of the Act and asked the petitioners to either remain present or to furnish a reply in writing as to any objection to the said act of centralization. On July 25, 2011, the petitioners filed reply to the said notice thereby objecting to the proposal of centralization and transfer of the petitioners' case to Surat. On July 29, 2011, the respondent No.1 passed the order, which is the subject matter of these writ-applications under Section 127(2) of the Act by transferring the case to the respondent No.2 without giving any further opportunity of being heard. Further, it does not reflect from the said order that any of the written objections given by the petitioners was considered. On August 8, 2011, the petitioners again raised objection before the respondent No.1 against the centralization and transfer of the cases alleging that the same was highly unjustified and contrary to the principles of natural justice inasmuch as before passing such order appropriate opportunity of being heard was not given. The petitioners have thus come up with the present applications. 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officers and where the same might have to be consolidated by transferring cases from one or more officers handling the group matters to another officer handling the other matters. However, in the present case, even that principle cannot apply because the cases are sought to be transferred at Surat where there is not even a single concern of the petitioner group, which is located, much less pending. The petitioners being regularly assessed at Vapi ever since inception at Nani Daman and other concerns of the group are assessed either at Vapi or at Mumbai. In fact, when other concerns of the group were searched in 1989 and in 1998, all the group-cases were centralized in Mumbai. Therefore, there is no valid ground for the respondent No.1 to transfer the cases at Surat for centralization of assessment of search cases involving the petitioners. 5. Mr Soparkar, the learned Senior Advocate appearing on behalf of the petitioners, has at the very outset by relying upon the decision of the Supreme Court in the case of Ajanta Industries vs. Central Board of Direct Taxes reported in (1976) 102 ITR 281 (SC) vehemently contended before us that in the absence of any reason assigned in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 ITR 226 (ALL). Mr Bhatt further submits that in view of the fact that there was search in the office of the petitioners, his client rightly decided to centralize the investigation by transferring the matters to Surat and thus, there is no justification of interference with the aforesaid decision in these writ-applications. Mr Bhatt, therefore, prays for dismissal of the applications. 7. Therefore, the only question that falls for determination in these applications is whether the respondent No.1 was justified in transferring the matters to Surat. 8. After hearing the learned counsel for the parties and after going through the materials on record, we find that in the order issuing transfer no reason has been assigned as to why the case should be transferred to Surat where admittedly no unit of the petitioners group is functioning. 9. Therefore, the first point that arises for determination is that in the order of transfer no reason having been given whether such non-disclosure of reason itself vitiates the order or whether such defect can be cured by giving subsequent reason in these proceedings through affidavit-in-reply. 10. We find that the above point came up for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant an opportunity to be heard and there was consequently no need to record reasons for the transfer. This decision is not of any assistance to the revenue in the present case since that was a transfer from one Income-tax Officer to another Income-tax Officer in the same city, or, as stated in the judgment itself, "in the same locality " and the proviso to section 127(1), therefore, applied. When law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. Mr. Sharma also drew our attention to a decision of this court in S. Narayanappa v. Commissioner of Income-tax (4), where this court was dealing with section 34 of the old Act. It is clear that there is no requirement in any of the provisions of the Act or any section laying down as a condition for the initiation of the proceedings that the reasons which induced the Commissioner to accord sanction to proceed under section 34 must also be communicated to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce were not considered by the transferring authority. It has been submitted by him that as observed by the Supreme Court in the case of Ajantha Industries v. CBDT [1976] 102 ITR 281, the reasons should not only be recorded but they should also be communicated to the assessee. It has been submitted by the learned advocate appearing for the petitioner that the order of transfer was never communicated to the petitioner before filing this petition but the petitioner-assessee was informed only when a copy of the said order was received by the petitioner by way of an annexure to one of the affidavits filed in the present proceedings. Moreover, it has been submitted that the reasons are not recorded in the order. We have gone through the record and we have also perused the reasons which have been given by the concerned authority for transferring the case of the petitioner under section 127 of the Act. It is clear that the case of the petitioner has been transferred from Bhavnagar to Rajkot for administrative reasons. It has been submitted by the learned advocate, Shri Naik, and it has been stated in the affidavit filed by the Deputy Commissioner of Income-tax (Central Circle-I), Rajkot, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. S. K. Sharma, AIR 1996 SC 1669. The said judgments pronounced by the Supreme Court, which are later in point of time, than the one relied upon by Shri Puj, lay down the law to the effect that at times noncommunication of a report or reasons recorded by the authority would not vitiate the entire enquiry or the proceedings especially when even after furnishing the report or reasons to the concerned person no different consequences would have followed. Even in the instant case, after considering the objections filed by the petitioner, when the authority had recorded the reasons and had decided to transfer the case of the petitioner and its partners from Bhavnagar to Rajkot, in our opinion, it would not make any difference whether the said reasons were communicated at an earlier point of time or not. Of course, now the reasons have already been communicated and upon perusal of the said reasons, we are satisfied that the said reasons are just and proper and the decision with regard to the transfer is in the interest of administration. Simply because the said reasons are not incorporated in the impugned order, the reasons would not become non-est. Looking to the ratio of the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the rules of natural justice. According to the said decision, this was the law laid down in Mohd. Ramzan Khan's case AIR 1991 SC 471 and it is appropriate that the said law should apply to employees in all establishments whether Government or non-Government, public or private. According to the said decision, this will be the case whether there are rules governing the disciplinary proceeding or not and whether those expressly prohibit the furnishing of the copy of the report or are silent on the subject. Whatever the nature of punishment, further, whenever the rules require an inquiry to be held, the Supreme court proceeded, for inflicting the punishment in question, the delinquent employee should have the benefit of the report of the Inquiry Officer before the disciplinary authority records its findings on the charges levelled against him. 15. In the case of State Bank of Patiala v. S. K. Sharma (supra), a two-judge-bench of the Supreme Court was dealing with a case where in a disciplinary enquiry against a bank officer for temporary misappropriation, the enquiry officer failed to furnish the copies of the statements of two witnesses. However, the delinquent was permitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, proclamation, order, judgment or other proceedings before or during trial or in any enquiry or other proceeding under this Code or any error or irregularity in any sanction for the prosecution unless in the opinion of that Court a failure of justice has in fact been occasioned thereby." The Supreme Court further pointed out that it was not shown to the Court that the State Bank of Patiala (Officers') Service Regulation contains provision corresponding to Section 99, C. P. C. or Section 465, Cr. P. C. According to the said decision, the test in such cases should be one of prejudice but this statement is subject to a rider. The regulations may contain certain substantive provisions, e.g., who is the authority competent to impose a particular punishment on a particular employee/officer. Such provisions must be strictly complied with. However, there may be any number of procedural provisions which stand on a different footing. Even among procedural provisions, there may be some provisions, which are of a fundamental nature in the case of which the theory of substantial compliance may not be applicable. 17. We find that in those two decisions, the question related to irregulari ..... X X X X Extracts X X X X X X X X Extracts X X X X
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