1981 (8) TMI 47 - HC - Income Tax

Transfer of Income Tax cases upheld on valid grounds; Petitions dismissed for lack of addressing reasons for transfer.

The writ petitions challenging the transfer of cases under section 127 of the Income Tax Act from ITO, Trust Circle, Jaipur to ITO, X Ward, Bombay were ... Reasonable opportunity of being heard - reasoned order requirement under section 127(1) of the Income-tax Act - transfer of assessment for coordinated investigation - rejection of objections and requirement to communicate reasons - assessment transfer versus convenience of the assesseeReasonable opportunity of being heard - Petitioners were afforded a reasonable opportunity of being heard before transfer under s.127(1). - HELD THAT: - The Board served a notice informing the petitioners of the proposal to transfer their cases, the reasons for the proposed transfer, and afforded them the option to appear personally before the Member (Income-tax) on a specified date or to file objections in writing by that date. The petitioners submitted written objections in response and there is no material to show that they were prevented from personally appearing on the date indicated or that any request for an alternative date was refused. Consequently, the statutory requirement of giving the assessee a reasonable opportunity of being heard was satisfied.The contention that no reasonable opportunity was afforded is rejected and the Board complied with the hearing requirement.Reasoned order requirement under section 127(1) of the Income-tax Act - transfer of assessment for coordinated investigation - The order of transfer sufficiently recorded reasons within the meaning of s.127(1). - HELD THAT: - The impugned order expressly stated that the transfer was effected to facilitate coordinated investigations along with other connected cases, which discloses the rationale for transfer. This satisfies the requirement to record reasons; Ajantha Industries v. CBDT (relied upon by petitioners) is distinguishable because, unlike that case, reasons here were communicated in the order and in the notice proposing transfer.The recorded statement that the transfer was for facilitating coordinated investigation constitutes adequate reasons under s.127(1).Rejection of objections and requirement to communicate reasons - assessment transfer versus convenience of the assessee - Failure to set out reasons for rejecting the petitioners' written objections did not vitiate the transfer order where objections did not controvert the disclosed reasons for transfer. - HELD THAT: - The objections filed by the petitioners complained of inconvenience and asserted localised activities, but did not contradict the reason disclosed in the notice - that coordinated investigation in Bombay was necessitated by financial transactions and connected cases there. The Board was entitled to proceed on the basis that the petitioners had not contradicted the disclosed rationale. Further, the convenience of the assessee cannot override the revenue's requirement for effective investigation. Authorities cited by the petitioners on cancellation of licences and analogous contexts were held inapplicable.Absence of express reasons in the order for rejecting the objections does not invalidate the transfer where the objections did not address the disclosed grounds and the need for coordinated investigation prevailed.Final Conclusion: Writ petitions dismissed summarily; the transfer of the petitioners' cases to ITO, X-Ward, Bombay complied with s.127(1) as the petitioners were given an opportunity to be heard, adequate reasons for transfer were recorded, and the objections did not negate the disclosed basis for coordinated investigation. Issues involved: The issues involved in this case are the transfer of cases u/s 127 of the Income Tax Act, 1961 from one jurisdiction to another, the opportunity of being heard before the transfer, the requirement of giving reasons for transfer, and the rejection of submissions made by the petitioners.Transfer of Cases u/s 127 of the Income Tax Act: The petitioners, educational institutions, were being assessed by the ITO, Sikar, and later transferred to the ITO, Trust Circle, Jaipur. The Central Board of Direct Taxes proposed to transfer their cases to ITO, X Ward, Bombay for coordinated investigation. The petitioners objected to the transfer, but the Board passed the transfer order on the grounds of facilitating coordinated investigation.Opportunity of Being Heard: The petitioners contended that they were not given a reasonable opportunity of being heard before the transfer order was passed. However, it was found that the petitioners were served with a notice informing them of the proposed transfer and were given a chance to appear before the Member (Income-tax) of the Board, which they did not utilize. Thus, the contention of not being afforded a reasonable opportunity was dismissed.Requirement of Giving Reasons for Transfer: The petitioners argued that the order of transfer did not provide reasons as required by s. 127(1) of the Act. The Supreme Court precedent was cited where non-communication of reasons for transfer was considered a serious infirmity. However, in this case, the order stated that the transfer was to facilitate coordinated investigations, which was deemed a valid reason for the transfer.Rejection of Submissions by Petitioners: The petitioners claimed that the Board should have given reasons for rejecting their submissions against the transfer. It was noted that the petitioners' objections did not address the reasons for the proposed transfer, and therefore, the Board's decision to transfer the cases was upheld. Precedents cited by the petitioners were deemed inapplicable to the present case.In conclusion, the writ petitions were dismissed as they lacked merit, and the transfer of cases from ITO, Trust Circle, Jaipur to ITO, X Ward, Bombay was upheld for coordinated investigation purposes.