Judgment

GAJENDRAGADKAR, C.J.I. :

These two appeals arise out of two writ petitions filed by the appellant Kashiram Agarwala in the Punjab High Court, Circuit Bench, at Delhi challenging the validity of two orders passed by the Central Board of Revenue (hereinafter called the Board ) under S.127(1) of the Income-tax Act, 1961 (No. 43 of 1961) (hereinafter called the Act ). These two orders have been passed on the 18th January, 1963, and they have directed that the income-tax proceedings then pending against the appellant should be transferred from the Income-tax Officers D Ward District IV(I), and F Ward District IV(2), Calcutta, respectively to the Income-tax Officer E Ward Companies District III, Calcutta. The petitioner alleged that these two orders were invalid, because before exercising its power under S. 127(1), the Board had failed to comply with a mandatory requirement prescribed by the said provision. These petitions were dismissed summarily by the High Court, and it is against these orders of summary rejection that the appellant has come to this Court by special leave.

2. Section 127(1) of the Act reads thus:

"The Commissioner 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, transfer any case from one Income-tax Officer subordinate to him to another also subordinate to him, and the Board may similarly transfer any case from one Income-tax Officer to another:

Provided that nothing in this sub-section shall be deemed to require any such opportunity to be given where the transfer is from one Income-tax Officer to another whose offices are situate in the same city, locality or place."

Sub-section (2) lays down that the transfer which is authorised to be made by sub-section (1), can be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Income-tax Officer from whom the case is transferred. There is an explanation to S. 127 which it is unnecessary to mention.

3. It is common ground that the impugned orders do not record any reasons why the Board thought it necessary to transfer the cases pending against the appellant from one Incometax Officer to the other; and the argument is that Section 127(1) imposes an obligation on the authority exercising its power under the said Section to record its reasons for directing the transfer of a case from one Income-tax Officer to another. It will be noticed that S.127(1) requires that where the power conferred by it is intended to be exercised, an opportunity should be given to the assessee wherever it is possible to do so, and reasons have to be recorded for making the order of transfer. The requirement that opportunity should be given, cannot be said to be obligatory, because it has been left to the discretion of the authority to consider whether it is possible to give such an opportunity to the assessee. It is, of course, true that in coming to the conclusion that it is not possible to give the required opportunity to the assessee, the authority must act reasonably and bona fide; but if the authority comes to the conclusion that it is not possible to give a reasonable opportunity to the assessee, that can be dispensed with. That, however, is not so with regard to the requirement that reasons must be recorded for making the transfer. So far as S. 127(1) is concerned, there is no dispute about this position.

4. The question which calls for our decision in the present appeals is: what is the effect of the proviso to S. 127(1)? The proviso lays down that nothing in sub-section (1) shall be deemed to require any such opportunity to be given in a case like the present. It is plain that the transfer in the present case is from one Income-tax Officer to another whose offices are situate in the same locality; and so, the point to consider is, what is the effect of this proviso? It is urged by Mr. Jain that the eff