Court quashes file transfer order under Income-tax Act, stresses reasoned judgment

SINGHAL ENTERPRISES P. LTD. Versus COMMISSIONER OF INCOME-TAX

SINGHAL ENTERPRISES P. LTD. Versus COMMISSIONER OF INCOME-TAX - [2009] 315 ITR 246 (Cal) Issues:
Challenge to order under section 127 of the Income-tax Act, 1961 transferring file from Kolkata to Ranchi without opportunity of hearing or consideration of written objections.

Analysis:
The petitioner challenged the order under section 127 of the Income-tax Act, 1961, transferring the file from Kolkata to Ranchi, citing lack of opportunity for hearing and non-consideration of written objections dated June 11, 2008, and September 8, 2008. The petitioner's case was similar to another case where the transfer order was quashed, relying on the judgment in Rajesh Mahajan v. CIT, which emphasized the importance of considering written objections as per legislative mandate.

The Revenue contended that the petitioner was given an opportunity to appear, and personal inconvenience cannot override the need for coordinated investigation. Citing the apex court judgment in Mahabir Prasad Santosh Kumar v. State of U. P., it was argued that the decision must be based on cogent reasons, which in this case, supported the transfer order.

The order detailed the objections raised by the assessees against the transfer, emphasizing practical inconvenience in attending proceedings at Ranchi. The Commissioner considered the objections but found no substantive merit, asserting that personal inconvenience cannot dictate the centralization of cases. The order was passed under the powers conferred by section 127 of the Act, transferring the case to a different Assessing Officer.

The court analyzed the order and found that while the objections were considered, there was no indication of how they were deliberated upon in reaching the decision. Citing legal principles, the court emphasized the need for a reasoned judgment based on facts and law. As the petitioner's objections were not adequately addressed, the court set aside and quashed the order, directing a fresh hearing with proper consideration of the materials on record.

The court also noted that the respondents were not required to file affidavits, deeming the allegations in the writ petition not admitted. No costs were awarded, and all parties were instructed to act as per the court's order.