The main legal point established in the judgment is that the show-cause notice and the order of transfer must contain valid reasons for the transfer, and the affected parties must be given a reasonable opportunity to be heard, in compliance with the mandatory provisions of section 127(1) of the Income Tax Act, 1961.

R.V. Raveendran, J.—The twenty petitioners are all Income Tax assessee. The petitioners are either individuals or proprietary concerns or partnership firms or private trusts or private limited companies incorporated under the Companies Act. They all belong to a group known as Yenepoya Group. They have their place of residence/ place of business/office at Mangalore. Their assessment files are with several different assessing authorities at Mangalore.

2. The Chief Commissioner of Income Tax, Bangalore (third respondent) initiated proceedings under section 127 of the Income Tax Act, 1961 ("the Act", for short), for transfer of the Income Tax cases of all the petitioners from their respective jurisdictional assessing authorities to the Assistant Commissioner of Income Tax, Central Circle-III, Bangalore (second respondent). The respective earlier assessing authorities are impleaded as respondents (first respondent in the respective cases). The third respondent caused show-cause notices dated August 20, 1992, to be issued to all the petitioners proposing to transfer their cases from their respective existing assessing authorities at Mangalore to the file of the second respondent under section 127 of the Act to facilitate proper investigation. By the said notices, the petitioners were also required to appear before the Chief Commissioner of Income Tax, Bangalore, on September 7, 1992, at 11.15 a.m. and in case any of the petitioners did not wish to appear personally or through their authorised representative, they were required to file their objections in writing by September 7, 1992.

3. The petitioners did not choose to appear before the third respondent either in person or through their authorised representatives on September 7, 1992, but filed their objections on August 18, 1992, wherein wherein they objected to the proposed transfer on the following ground :

"We hereby register our objections to the proposal, since we fall in the jurisdiction of Mangalore and all the business firms in which we are partners are situated in Mangalore. We have no office in Bangalore whatsoever. The Income Tax consultant is also stationed in Mangalore and if the file is transferred to Bangalore we shall find it difficult to appear before you with the books, in view of the long distance and also in view of the number of days that may be lost in appearing and producing the books and documents before you for hearing.

There is, therefore, no jurisdiction to transfer our files to Bangalore, which have been all along handled by the Mangalore Income Tax office. We, therefore, request you not to transfer our files which will cause tremendous strain and inconvenience to us and also delay in appearing before you. We hope you will appreciate our objection and retain our files in Mangalore itself. An opportunity of being personally heard may kindly be given before disposal of our objections."

4. Thereafter, the third respondent passed an order dated October 7, 1992 (annexure 'C' to the petition), transferring the cases of all the twenty petitioners from the respective jurisdiction assessing authorities at Mangalore to the second respondent (Assistant Commissioner of Income Tax, Central Circle-III, Bangalore). The order dated October 7, 1992, communicated to the petitioner reads as follows :

"In exercise of the powers conferred under section 127(2) of the Income Tax Act, 1961, the Chief Commissioner of Income Tax, Bangalore, hereby transfers the cases, the particulars of which are mentioned in columns 2 and 3 of the schedule below, from the Assessing Officer in column 4 to the Assessing Officer in column 5 below, in order to facilitate proper coordinated investigation and after giving them proper opportunity of being heard in terms of section 127 of the Income Tax Act, 1961.

SCHEDULE

This order shall take from October 15, 1992.

(Sd.)

for Chief Commissioner of Income Tax, Bangalore."

5. The petitioners have challenged the transfer of their ceases to Bangal