Writ petition granted against file transfer without hearing under Income-tax Act

The High Court of Calcutta allowed a writ petition challenging the transfer of a file from Kolkata to Mumbai under section 153C of the Income-tax Act, 1961 without providing an opportunity of hearing to the petitioners. The court found the transfer to be in violation of section 127 as no hearing was granted to the petitioners, following the principles of natural justice. The court set aside and quashed the transfer order, granting the Revenue the liberty to take action after issuing notice and providing a hearing to the petitioners. No costs were awarded, and parties were instructed to act on a xerox copy of the order.

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Issues involved: Challenge to transfer of file from Kolkata to Mumbai u/s 153C of the Income-tax Act, 1961 without opportunity of hearing.

Summary:
The High Court of Calcutta heard a writ petition challenging the transfer of a file from Kolkata to Mumbai u/s 153C of the Income-tax Act, 1961 without providing an opportunity of hearing to the petitioners. The petitioners argued that the transfer was done without inviting objection and without granting them a hearing. The court noted that no affidavits or records were produced by the Revenue despite directions, leading to the petitioners' assertions being deemed correct.

In analyzing the issue, the court referred to section 127 of the Act, highlighting that for inter-city transfers, principles of natural justice must be followed by giving the assessee an opportunity of hearing and recording reasons for the transfer. However, for intra-city transfers, no such opportunity is required. Since the transfer from Kolkata to Mumbai was inter-city, the court found that the transfer was in violation of sub-section (1) of section 127 as no hearing was provided to the petitioners. Citing the precedent set in Nitin Developers [2006] 284 ITR 605 (Delhi), the court set aside and quashed the order of transfer.

The court allowed the writ petition, granting the Revenue the liberty to take action in accordance with the law after issuing notice and providing an opportunity of hearing to the petitioners. No costs were awarded, and all parties were instructed to act on a xerox signed copy of the order.

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