Court sets aside jurisdiction transfer order, emphasizing valid reasons and reasonable connection under Income-tax Act.

The court set aside the order transferring the petitioner's income-tax case to Cuttack jurisdiction, emphasizing the need for a reasonable connection and valid reasons for such transfers under the Income-tax Act, 1961. The court found the transfer unnecessary as the cases of the petitioner's relatives had already attained finality, questioning the administrative justification for the transfer. Ultimately, the court allowed the writ petition, concluding that the impugned order lacked justification and interfered with it, leading to the order's setting aside.

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Issues involved:
The challenge against an order transferring the file of the petitioner to a different jurisdiction u/s 127 of the Income-tax Act, 1961.

Details of the judgment:

The petitioner, an income-tax assessee, challenged the transfer of her case to Cuttack from Nagaon jurisdiction. The petitioner argued that the transfer lacked reasonable connection with the object of investigation and was legally fragile. The petitioner highlighted that the block assessments of her relatives were set aside in appeal and finalized by the Settlement Commission, making the transfer unnecessary.

The departmental counsel contended that the transfer was based on connecting the petitioner's income to her relatives' undisclosed income, justifying the administrative necessity for the transfer.

The court noted that the power of transfer u/s 127 of the Act is to be sparingly exercised for administrative necessities. The order transferring the case to facilitate coordinated investigation of the petitioner's relatives was found to be justified. However, the court observed that the transfer was made despite the block assessments of the relatives being finalized and set aside in appeal. The lack of information on the terms of the appeals' disposal raised doubts on the validity of the transfer.

The court further pointed out that the cases of the relatives had attained finality under section 245-I of the Act, rendering the transfer of the petitioner's case unnecessary. The court concluded that the impugned order lacked justification and interfered with it, setting it aside.

Therefore, the court allowed the writ petition and set aside the order transferring the petitioner's case to Cuttack, emphasizing the need for a reasonable connection and valid reasons for such transfers under the Act.

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