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High Court Of Delhi
S.L.SINGHANIA - Appellant
Versus
ASSISTANT COMMISSIONER, INCOME TAX/WEALTH TAX - Respondent
Civil 321 of 1991
Decided On : 10/08/1991
INCOME TAX - Section 127 - Transfer of cases - No requirement to give reasons or opportunity of hearing when transfer is between officers in the same city - Kashi Ram Aggarwala v. Union of India, 56 ITR 14, followed.
Fact of the Case:
The petitioners challenged an order passed under Section 127 of the Income Tax Act, 1961, transferring their cases from one Assistant Commissioner of Income Tax to another, both situated in the same city. The petitioners contended that the Commissioner of Income Tax did not communicate the reasons for the transfer, that the order was not served on them, and that the transfer was effective only from the date of communication.
Finding of the Court:
The court held that Section 127(3) of the Income Tax Act, which applies to transfers between officers in the same city, does not require the Commissioner to give reasons for the transfer or to provide an opportunity of hearing to the assessee. The court also held that the order was served on the petitioners and that the transfer was effective from the date of the order.
Issues: 1. Whether the Commissioner of Income Tax was required to give reasons for the transfer under Section 127(3) of the Income Tax Act? 2. Whether the Commissioner was required to provide an opportunity of hearing to the assessee before effecting the transfer? 3. Whether the transfer was effective only from the date of communication to the petitioners?
Ratio Decidendi: 1. Section 127(3) of the Income Tax Act, which applies to transfers between officers in the same city, does not require the Commissioner to give reasons for the transfer or to provide an opportunity of hearing to the assessee. This is because the transfer is considered to be an administrative order made for the convenience of the department and no prejudice is caused to the assessee. 2. The order of transfer was served on the petitioners when it was endorsed to them at the bottom of the order and when they were informed of the transfer by the transferor officer. 3. The transfer was effective from the date of the order, not from the date of communication to the petitioners.
Final Decision: The writ petition was dismissed with costs.
( 1 ) IN this writ petition the challenge is to the order passed under Section 127 on 7th May 1990 by the Commissioner of Income Tax, Central I, who has transferred the cases of the petitioners from one Assistant Commissioner of Income Tax under his jurisdiction, namely. Central Circle 18 to another Assistant Commissioner of Income Tax also under his jurisdiction being Central Circle
( 2 ) INTERESTINGLY enough both the transferor and the transferee Offices are situated on the same floor, in the same building and in the same city. This writ petition which seeks to challenge this order of transfer and the consequent assessment orders passed in respect of petitioners 2 and 4 appears to be a desperate effort to avoid being assessed by the transferee officer. The challenge in this writ petition, as we shall presentlyee, has been made despite the fact that the legal contentions sought to be raised before us are squarely covered by an authoritative pronouncement of a Constitutional Bench of the Supreme Court of India in the case of Kashi Ram Aggarwala v. Union of India and Ors. , 56 ITR 14.
( 3 ) AS is evident what has been stated above, the petitioners, who are five in number and belong to the same family known as sirghania family and are being, presumably, assessed as a group, and were being dealt with by the Assistant Commissioner of Income Tax, Central Circle 18.
( 4 ) AFTER the order of 7th May 1990 was passed by the Commissioner of Income Tax, Central Circle I, transferring the cases to Assistant Commissioner of Income Tax, Central Circle 20. the peitioners were informed by latter dated. 8th May 1990 by the transferor officer that lh; cases have been transferred to- Central Circle 20 with effect from 10th Mav 1990. The order dated 7ih May 1990 according to the petitioner, was not CJmmunicated to it. This averment is made even though at ihe boitjm of the order dated 7th May 1990 a copy of the same is endorsed to the assesssee. Be that as it may, there ii no denying of the fact, and this is admited in the writ petition, that vide a letter dated 24th of January 1991 the Assessing Officer enclosed a copy of the said order dated 7thi May 1990.
( 5 ) PRIOR to the filing of ihe present writ petition assessment orders were passed by the Transferring Officer in respect of petitioners 2 and 4.
( 6 ) IT is submitted by the learned counsel for the petitioners before us that the Commissioner of Income Tax did not communicate the reasons for the transfer to the petitioners. Relyinp on Ajanta Industries and Others v. Central Board of Direct Taxes, 102 IIR 251, Manoj Didania v. U. O I , W ITR 177, Saptagiri Enterprises v. CIT- 189 ITK 705. Viflysanthi Investments Pvt Ltd. v. Chief Commissioner of Income Tax, 187 ITR 405. V. Vishwanathsaratvnew Education Institute, 161 ITR 895, and K. Joseph Jacobs. Agricultural income Tax Officer, 190 ITR 964, three contenions have been raised by the learned counsel for the petitioner. The first contention is that the reaso s for the transfer should have been communicated. The secjtd cantention is that the order dated 7th May 1990 was not served on the assessee by the Commissioner of Income Tax and lastly, it is contended that the order of transfer is effective onlyfronv the date when it was communicated to the petitioners. Intbisconriclionitis- submitted that any action taken prior to the communication of ihe order is. invalid.
( 7 ) WE find no force or substance in any of these contentions. Section 127, sub-sections (1) and (3), which are relevant, read as follows :-
"s. 127 (1 ). The Director General or Chief Commissioner or Commissioner may. after giving the assessee a redsonable opportunity of being heard in the mfctter whereever it is posoition ble to do so, and after recordiig his rea?ons for doing so, transfer any case from one or more Assessing Officers subordi- nate to him (whether wiih. or without concurrent jurisdiction) and other Assessing Officer or Asstssing Officers (wh
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