JUDGMENT

GOSWAMI, J.:—The appellant No. 1 is a registered firm and appellants 2 and 3 are the only two partners of that firm. They are assessees under the Income-tax Act. Their assessments have been made for a number of years in Nellore District in the usual course. On January 23, 1973, the Central Board of Direct Taxes (briefly the Central Board) sent a notice to the appellants under Section 127 of the Income-tax Act, 1961 (briefly the Act) proposing to transfer their case files "for facility of investigation" from the respective Income-tax Officer at Nellore to the Income-tax Officer, B Ward, Special Circle II, Hyderabad. By this notice 438 they were also asked to submit in writing if they had any objection to the propose transfer within 15 days of receipt of the notice. The appellants made their representation objecting to the transfer and on July 26, 1973, the Central Board passed the impugned order transferring the cases from Nellore to Hyderabad.

2. There is no provision of appeal or revision under the Act against such orders of transfer. The appellants, therefore, preferred an application under Article 226 of the Constitution before the High Court of Andhra Pradesh questioning the validity of the order chiefly on the ground of violation of the principles of natural justice inasmuch as no reasons were given nor communicated in the said order. The learned single Judge after having called for the relevant file found that certain reasons were recorded by the Central Board prior to the passing of the impugned order and held that mere failure to communicate the reasons to the appellants was not fatal to the order. The writ petition was, therefore, dismissed.

3. The appellants Letters Patent Appeal before the Division Bench of the High Court also met with the same fate. Hence this appeal by special leave.

4. The short question that arises for consideration is whether failure to record the reasons in the order which was communicated to the appellants is violative of the principles of natural justice for which the order should be held to be invalid.

5. Section 5 (7A) was the corresponding section in the Income-tax Act, 1922 (briefly the Old Act). The section may be set out:

"The Commissioner of Income-tax may transfer any case from one Income-tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income-tax Officer to another. Such transfer may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Income-tax Officer from whom the case is transferred"

The successor section under the Income-tax Act, 1961 is Section 127 and the same may be set out:

"Transfer of cases from one Income-tax Officer to another:-

(1) 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 situated in the same city, locality or place.

(2) The transfer of a case under sub-s. (1) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Income-tax Officer from whom the case is transferred.

Explanation:- In this section and in Sections 121 and 125, the word case in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be comm