2023 (10) TMI 658 - HC - Income Tax

Transfer orders set aside for lack of reasons and missing Document Identification Numbers under Section 127(1)

Delhi HC set aside transfer orders directing petitioners' cases from local jurisdiction to DCIT Mumbai. The orders were non-speaking, failed to provide ... Non speaking orders - Orders do not bear a Document Identification Number (DIN) - transfer of cases concerning the petitioners to DCIT, Mumbai was proposed for administrative convenience and coordinated investigation carried out qua Suumaya - HELD THAT:- The concerned officer, while passing the impugned order, has not said a word as to what prevailed with her in directing the transfer of the petitioners’ cases to DCIT, Mumbai. As indicated above, the orders do not bear the DIN as well. Although Respondent [Mr Aseem Chawla] did try to persuade us to sustain the impugned orders, having regard to the fact that coordinated investigation was necessary as Suumaya Group was in Mumbai, we are not inclined to accept the plea as the impugned orders do not even advert to the reasons stated in the letter i.e., search on Suumaya group, administrative convenience, and coordinated investigation. There were several reasons given by the petitioners as to why the transfer ought not to take place. The least the PCIT could have done was to discuss, in the briefest of terms, why these reasons did not prevail with her. It cannot be disputed that Section 127(1) required PCIT to set forth reasons in the order. What compounds the injury is that the impugned orders do not bear a DIN, which is a requirement of the CBDT Circular No. 19/2019 dated 14.08.2019. Thus, for the foregoing reasons, we are inclined to set aside the impugned orders. Issues involved:The judgment involves challenges to two separate orders under Section 127(2) of the Income-tax Act, 1961. The primary issues raised are that the impugned orders are non-speaking orders and do not bear a Document Identification Number (DIN).Issue 1: Non-speaking ordersThe writ petitions challenge the impugned orders on the grounds that they are non-speaking orders. The petitioners argue that the orders fail to provide any reasoning or justification for transferring the cases from one Assessing Officer to another. The petitioners contend that the lack of reasoning violates the requirement under Section 127(1) of the Income Tax Act, which mandates the recording of reasons for such transfers. The petitioners cite the Supreme Court's decision in Ajantha Industries v. Central Board of Direct Taxes, emphasizing the importance of communicating reasons to the assessee. The court agrees with the petitioners and sets aside the impugned orders due to the absence of proper reasoning.Issue 2: Lack of Document Identification Number (DIN)Another ground for challenging the impugned orders is the absence of a Document Identification Number (DIN). The petitioners argue that the orders being non-speaking and lacking a DIN render them invalid. The court notes that the DIN is a requirement under CBDT Circular No. 19/2019 and finds that the impugned orders do not comply with this essential administrative procedure. Consequently, the court directs the setting aside of the impugned orders based on this deficiency.Conclusion:In conclusion, the High Court of Delhi, comprising Hon'ble Mr. Justice Rajiv Shakdher and Hon'ble Mr. Justice Girish Kathpalia, grants relief to the petitioners by setting aside the impugned orders. The court emphasizes the importance of providing proper reasoning in official orders and complying with administrative requirements such as the Document Identification Number. The Principal Commissioner of Income Tax is directed to address the concerns raised by the petitioners if considering a reevaluation of the transfer process. The writ petitions are disposed of accordingly, and pending applications are closed.