2008 (12) TMI 8 - HC - Income Tax

High Court quashes order transferring cases under Income Tax Act, emphasizes fair process

The High Court set aside the order transferring cases under Section 127(2) of the Income Tax Act from Delhi to Meerut, directing the Commissioner of ... Order of transfer of cases – Assessee’s contention that the order of transfer u/s 127(2) ought to disclose proper application of mind to the objections which the assessee may have raised, is acceptable – order does not disclose proper application of mind to the objections and obviously the order does not indicate as to how the objections raised by the petitioners have been met - we set aside the impugned order passed by Commissioner of Income Tax (Delhi)-I, New Delhi Issues:Challenge to order transferring cases under Section 127(2) of the Income Tax Act, 1961 from Delhi to Meerut for administrative convenience and coordinated investigation.Analysis:1. The batch of writ petitions challenged the order dated 07.10.2008 transferring cases of the petitioners to the Assessing Officer at Meerut under Section 127(2) of the Income Tax Act, 1961. The petitioners raised objections citing their presence in Delhi and Noida, the location of business activities, and the convenience of attending assessment proceedings in Delhi due to proximity. The impugned order did not address these objections but stated the transfer was for administrative convenience and coordinated investigation.2. The petitioners' counsel referred to a previous court decision emphasizing that orders under Section 127(2) should reflect consideration of objections raised by the assessee. The current order lacked a proper application of mind to the objections, failing to demonstrate how the objections were addressed. The order did not indicate any response to the petitioners' objections, leading to a lack of satisfaction regarding the decision-making process.3. Consequently, the High Court set aside the impugned order, allowing the Commissioner of Income Tax (Delhi)-I, New Delhi to issue a new order under Section 127(2) after providing the petitioners with another opportunity to be heard. The court directed that the new order must specifically address any objections raised by the petitioners, ensuring a transparent and reasoned decision-making process.4. The writ petitions were disposed of accordingly, with the court ordering the issuance of a new order after considering the objections raised by the petitioners. The court directed the provision of a fair opportunity for the petitioners to present their case and emphasized the importance of addressing objections in the decision-making process to uphold principles of natural justice and procedural fairness.