Court quashes transfer order & assessment due to lack of hearing opportunity & reasons.

The court quashed the transfer order dated 11.9.2008 and subsequent assessment orders due to the failure to provide a reasonable opportunity of hearing and the absence of recorded reasons for the transfer, as mandated by Section 127 of the Income Tax Act.

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Issues Involved:
1. Legality of the transfer order dated 11.9.2008.
2. Requirement of opportunity of hearing before passing the transfer order.
3. Validity of assessment orders passed by the Assistant Commissioner of Income Tax, Central Circle-4, New Delhi.

Issue-wise Detailed Analysis:

1. Legality of the Transfer Order Dated 11.9.2008:
The petitioner challenged the transfer order dated 11.9.2008 issued by the Commissioner of Income Tax, Ghaziabad, arguing that it was passed without giving any opportunity to the petitioner and without recording any reason for the transfer. The court found that the transfer order did not record any reasons for transferring the case from ITO Ward 2 (3), Ghaziabad to Central Circle 4, New Delhi. The court referred to Section 127 of the Income Tax Act, which mandates that reasons must be recorded for such transfers and that the assessee must be given a reasonable opportunity of being heard. The court concluded that both these requirements were not fulfilled, rendering the transfer order patently illegal and liable to be set aside.

2. Requirement of Opportunity of Hearing Before Passing the Transfer Order:
The petitioner argued that no opportunity of hearing was provided before the transfer order was issued, which is a mandatory requirement under Section 127 of the Income Tax Act. The court agreed, stating that the reasonable opportunity of hearing is a prerequisite for passing a transfer order unless it is shown that it is not possible to do so. In this case, no such reason was recorded. The court emphasized that the requirement of recording reasons and providing an opportunity of hearing is mandatory. The court cited the Apex Court's decision in Ajantha Industries v. Central Board of Direct Taxes, which held that non-communication of reasons for transfer is not saved by merely recording reasons in the file without communicating them to the assessee.

3. Validity of Assessment Orders Passed by the Assistant Commissioner of Income Tax, Central Circle-4, New Delhi:
The petitioner contended that the assessment orders passed by the Assistant Commissioner of Income Tax, Central Circle-4, New Delhi were invalid as they were based on the illegal transfer order. The court agreed, stating that since the transfer order dated 11.9.2008 was illegal, all subsequent assessment orders passed by the Assistant Commissioner of Income Tax, Central Circle-4, New Delhi were without jurisdiction and thus liable to be quashed. The court quashed the assessment orders for the years 2000-01 to 2006-07.

Conclusion:
The court quashed the transfer order dated 11.9.2008 and all subsequent assessment orders passed by the Assistant Commissioner of Income Tax, Central Circle-4, New Delhi, due to the failure to provide a reasonable opportunity of hearing and the absence of recorded reasons for the transfer, as mandated by Section 127 of the Income Tax Act.

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