TaxTMI 
TaxTMI 
2010 (9) TMI 714
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....hearing and final disposal of this petition, to stay implementation and operation of the order at Annex. 'A', and of the notice at Annex. 'B' of this petition and stay further proceeding for the transfer of the petitioner's case from Ahmedabad to Bhopal; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition." 3. The facts stated briefly are that vide notice dated 29-7-2009 issued by the Dy. CIT, Circle-7, Ahmedabad, the petitioner was informed that the Dy. Director of Investigation, Bhopal, had made a proposal for centralization of her case in connection with the search and seizure action carried out in case of Shri Avtarsingh Khurana and Others. It was further stated in the notice that the petitioner was being given an opportunity of being heard with regard to the said subject and was requested to attend the office of the Dy. CIT or furnish a reply in writing before the date specified in the notice, if she wanted to represent her views in the matter. In response to the said notice, the petitioner filed a reply dated 6-8-2009 addressed to the Dy. CIT objecting to t....
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....whom the case is to be transferred are not subordinate to the same Director General, or Chief CIT or CIT, two basic requirements are required to be satisfied before making an order transferring the case under section 127(2) of the Act, viz., the concerned Director General, Chief CIT or CIT from whose jurisdiction the case is to be transferred is required to give the assessee a reasonable opportunity of being heard; and the concerned authority is required to record reasons for doing so. It was submitted in the present case the impugned order dated 11-11-2009 has been passed without affording any opportunity of hearing to the petitioner and no reasons have been recorded for transferring the case of the petitioner to the Assessing Officer at Bhopal, and as such the impugned order being in breach of the statutory provisions is illegal and invalid and as such the entire proceedings initiated pursuant thereto, including the impugned notice under section 153C of the Act would stand vitiated. In support of his submissions, the learned counsel placed reliance upon the decision of the Apex Court in the case of Ajantha Industries v. CBDT [1976] 102 ITR 281. Various other contentions have also....
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.... (a) where the Director Generals or Chief CITs or CITs to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief CIT or CIT from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Director Generals or Chief CITs or CITs aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief CIT or CIT as the Board may, by notification in the Official Gazette, authorise in this behalf." 8. In the present case, the case of the petitioner has been transferred from an Assessing Officer to an Assessing Officer who is not subordinate to the same CIT, hence the provisions of sub-section (2) of section 127 of the Act would be applicable. On a plain reading of the provisions of sub-section (2) of section 127 of the Act it is apparent that the same contemplates giving a reasonable opportunity of hearing to the assessee by the Director General, or Chief CIT or CI....
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....nclosed for ready reference) submitted that in the case of M/s Dilip Avtar Construction (P.) Ltd. the assessee has filed objections to the proposed centralization. vide this office letter of even No. dated 23rd Nov., 2009 (copy enclosed for ready reference) the Director of IT (Inv.), Bhopal has been requested to forward detailed reasons for proposed centralization. In the case of Smt. Madhu Khurana the CIT, Ahmedabad-III, Ahmedabad vide letter No. CIT-III/R.7/Khurana/2009-10, dated 17th Aug., 2009 (copy enclosed for ready reference) has anticipated that the assessee may challenge the order of centralization and therefore, requested to supply detailed reasons on the basis of which a speaking order justifying the transfer of cases to Bhopal may be passed. The said letter of the CIT-III Ahmedabad has been forwarded to Director of IT (Inv.), Bhopal vide this office letter dt. 25th Aug., 2009 (copy enclosed for ready reference). Similarly, CIT, Ahmedabad-VII, Ahmedabad, in the case of Shri Avtar Singh Khurana has also submitted that due to health problem the assessee has shown his inability to travel frequently from Ahmedabad to Bhopal. In this background a letter dt. 23rd Nov., 2009 (c....
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....priate case for challenging the order, inter alia, either on the ground that it is mala fide or arbitrary or that it is based on irrelevant and extraneous considerations. Whether such a writ or special leave application ultimately fails is not relevant for a decision of the question. We are clearly of opinion that the requirement of recording reasons under section 127(1) is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee." Examining the facts of the present case in the light of the principles enunciated in the aforesaid decision, even if for a moment it is assumed that the reasons have in fact been recorded in the file, the Apex Court has held that not only is the requirement of recording reasons under section 127(1) a mandatory direction under the law, but that non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee. Thus, non-communication of the reasons recorded would also vitiate the order made under section 127(2) of the Act. 12. In the facts of the present case, prima facie it app....