Transfer of income-tax cases: prior hearing may be dispensed with where not possible, if reasons for centralisation are recorded.

Section 127(2)(a) of the Income-tax Act permits transfer of income-tax cases without prior hearing where affording notice is not possible, but it still requires recorded reasons in every case. The transfer here was made in the context of search proceedings and centralized investigation of a group for coordinated assessment at one place, which was treated as a valid basis for centralisation. The order disclosed the reason for transfer, and the assessee's failure to promptly object when the transferee officer first acted further supported the challenge's rejection. The consequential jurisdictional objection therefore failed.

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Issues: Whether the transfer of the assessee's income-tax cases under section 127(2)(a) was invalid for want of prior opportunity of hearing and for failure to record and communicate reasons.

Analysis: Section 127(2)(a) requires a reasonable opportunity of hearing only where it is possible to do so, but it mandates recording of reasons in every case. The transfer order was made in the context of search proceedings and centralized investigation of a group of cases for coordinated assessment at one place. The Court held that the statutory phrase qualifying the hearing requirement cannot be ignored, and on the facts the authorities were justified in dispensing with prior notice because of urgency and the need for coordinated investigation. The order disclosed the basis of centralization, which was held to be a valid reason for transfer, and the assessee did not promptly object when the transferee officer first acted.

Conclusion: The transfer order was held valid, and the challenge to consequential action based on want of jurisdiction failed.

Ratio Decidendi: Under section 127(2)(a) of the Income-tax Act, 1961, prior hearing is not mandatory where it is not possible to afford it, but reasons for transfer must be recorded and the transfer may be sustained where centralization for coordinated investigation provides a valid basis.

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