Intra-city transfer of assessment cases does not require prior notice or reasons when the special circle is validly constituted.

A transfer of assessment cases within the same city did not attract the statutory requirement of prior notice or recorded reasons, because the proviso applied only to transfers outside the same city, locality or place. The court also held that Special Circle-III, Hyderabad was validly constituted, so the transfer of the assessees' cases to that circle was lawful. As the Income-tax Officer was already entrusted to act for the Wealth-tax Officer and Gift-tax Officer in respect of the same assessees, separate transfer orders under the Wealth-tax Act and the Gift-tax Act were unnecessary. The challenge to the transfer failed.

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Issues: (i) Whether the Special Circle-III, Hyderabad was validly constituted and the transfer of the assessees' cases to it was lawful; (ii) whether prior notice and reasons were required under the transfer provision when the cases were shifted within Hyderabad city; (iii) whether separate transfer orders were necessary under the Wealth-tax Act and the Gift-tax Act.

Issue (i): Whether the Special Circle-III, Hyderabad was validly constituted and the transfer of the assessees' cases to it was lawful.

Analysis: The jurisdictional authority had power to create additional circles and direct that the officer in charge perform functions in respect of specified cases. The existence of administrative arrangements at Hyderabad and the fact that the officer sometimes attended from Visakhapatnam did not negate the legal constitution of the circle or convert the transfer into a transfer to a non-existent office. Section 126 was held to be inapplicable on the facts.

Conclusion: The Special Circle-III, Hyderabad was validly constituted, and the transfer to it was upheld.

Issue (ii): Whether prior notice and reasons were required under the transfer provision when the cases were shifted within Hyderabad city.

Analysis: The proviso requiring notice applies only where the transfer is from one place to another outside the same city, locality or place. Where the offices are situated in the same city, the notice requirement does not arise. The principle was distinguished from cases involving transfer between different cities, and the transfer was treated as an intra-city administrative movement.

Conclusion: No prior notice or separate reasons were required for the transfer within Hyderabad city.

Issue (iii): Whether separate transfer orders were necessary under the Wealth-tax Act and the Gift-tax Act.

Analysis: The Income-tax Officer was statutorily entrusted to perform the functions of the Wealth-tax Officer and the Gift-tax Officer in respect of the same assessees. The special transfer provisions under the Wealth-tax Act and the Gift-tax Act were not attracted because the matter was not a transfer from one separate officer to another in different locations.

Conclusion: Separate transfer orders under the Wealth-tax Act and the Gift-tax Act were not necessary.

Final Conclusion: The challenge to the transfer of the assessees' cases failed in all material respects, and the writ petition was dismissed with costs.

Ratio Decidendi: A transfer of assessment cases between officers functioning in the same city does not attract the statutory requirement of prior notice and reasons, and a validly constituted special circle may lawfully exercise jurisdiction over the transferred cases.

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