2025 (1) TMI 1672 - HC - Income Tax

Transfer order under Section 127 not proved communicated; proceedings under Sections 143(2), 142(1) stayed pending challenge

HC considered a challenge to a transfer order u/s 127 on the ground that, though passed by the Principal CIT, Bareilly, it was not communicated to the ... Validity of transfer order passed u/s 127 - notices u/s 143(2) have been issued by the Assistant Commissioner of Income Tax/Deputy Commissioner of Income Tax (International Taxation), Circle 1(1) (1), Delhi and another notice u/s 142(1) has been issued by the Assistant Commissioner of Income Tax, Central Circle-30, Delhi - HELD THAT:- Instructions have been produced, indicating that the order has been passed on 23.08.2023 by the Principal Commissioner of Income Tax, Bareilly, however, the details of dispatch of the order to the assessee is not readily available with the respondents. A perusal of the endorsement made on the order dated 23.08.2023 reveals that the said order has been sent by endorsement to the authorities named therein and the sixth person indicated is the assessee concerned. Apparently, the order has not been communicated to the petitioner. Reliance has been placed by counsel for the petitioner on Ajanhta Industries [1975 (12) TMI 1 - SUPREME COURT (LB)] to indicate that passing of the order and its communication to the assessee is mandatory and non-communication thereof is not saved by showing that reasons existed. Matter requires consideration. Issue notice. Counter affidavit be filed within a period of six weeks. In the meanwhile and till further orders, further proceedings pursuant to notice under Section 123(2) and 142 of the Act initiated by respondent Nos. 2 and 3, shall remain stayed. Petitioner challenged that a notice dated 03.08.2023 under Section 127, Income Tax Act, 1961 was not communicated though an order dated 23.08.2023 purportedly under Section 127 was passed. Respondents produced instructions indicating the order was passed by the Principal Commissioner on 23.08.2023 but details of dispatch to the assessee are not readily available. Endorsement on the order lists the assessee as the sixth addressee, and 'apparently, the order has not been communicated to the petitioner.' Reliance was placed on Ajanhta Industries v. Central Board of Direct Taxes ([1976] 102 ITR 281) that 'passing of the order and its communication to the assessee is mandatory and non-communication thereof is not saved by showing that reasons existed.' Court issued notice, directed filing of a counter-affidavit within six weeks, and ordered that, 'in the meanwhile and till further orders, further proceedings pursuant to notice under Section 123(2) and 142 of the Act ... shall remain stayed.'