Income-tax case transfer requires prior notice, reasons and hearing before any valid decision can stand.

A transfer of an income-tax case under section 127 of the Income-tax Act cannot be sustained without prior notice, disclosure of reasons, an opportunity to object and a speaking order. The Delhi HC noted the assessee's objection that no such opportunity had been given before the purported transfer from New Delhi to Kolkata, and, in view of the Revenue's instruction to afford a fresh hearing, declined to examine the challenge further. The Commissioner was directed to grant a proper hearing before any fresh transfer decision, no further proceedings were to continue meanwhile before the Kolkata assessing authority, and the earlier transfer order was treated as revoked.

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Issues: Whether the transfer of the assessee's income-tax case from New Delhi to Kolkata could be sustained without prior notice, disclosure of reasons, and opportunity of hearing under section 127 of the Income-tax Act, 1961.

Analysis: The Court recorded that the assessee had objected to the transfer on the ground that no prior intimation or hearing had been granted before the purported transfer order. Relying on the settled principle that a transfer order under section 127 must be preceded by notice, disclosure of reasons, an opportunity to object, and a speaking order communicating those reasons, the Court declined to examine the merits of the challenge further in view of the Revenue's instruction to afford a fresh opportunity.

Outcome: The petition was disposed of with a direction that the Commissioner grant the petitioner a proper opportunity of hearing before taking any fresh decision on transfer of the case, no further proceedings were to continue meanwhile before the Kolkata assessing authority, and the earlier transfer order was treated as revoked.

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