Adherence to the principles of natural justice, including providing the assessee with a reasonable opportunity of being heard, is fundamental in adversarial proceedings, even in faceless proceedings.

JUDGMENT

1. The instant writ petition has been preferred by the petitioner being aggrieved of the transfer order dated 21.11.2019 (Annexure-7), passed by the respondent Principal Commissioner of Income Tax Department, Udaipur under Section 127 of the Income Tax Act and the notices issued in pursuance thereof.

2. The grievance of the petitioner is that by order Annexure-7, the assessment file of the petitioner has been transferred to the Deputy/ACIT, Central Circle-14, New Delhi, without providing any opportunity of hearing.

3. Shri Anjay Kothari, learned counsel representing the petitioner, referred to Section 127 (1) of the Income Tax Act, which reads as below:-

"127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or 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 or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him."

and urged, that a plain reading of the Section would make it clear that case can be transferred without opportunity of being heard to the assessee only in a situation where, the competent authority is of the opinion, for reasons to be recorded in writing, that it is not possible to provide such opportunity to the assessee. He submits that in the case at hand, neither any situation existed wherein, it was not possible to provide opportunity of hearing to the petitioner, nor did the competent authority record any reasons for not providing opportunity of hearing to the petitioner before transferring its case from Circle Udaipur to Circle New Delhi.

4. In support of his contentions, Shri Kothari placed reliance on (1.) Smt. Jeewan Kumari v. Union of India & Ors. reported in (1979) 118 ITR 573 (Raj.) and (2.) Noorul Islam Educational Trust v. Commissioner of Income Tax reported in (2017) 291 CTR (SC) 230. He, thus, urged that the impugned transfer order dated 21.11.2019 (Annexure-7) and the subsequent proceedings sought to be taken in furtherance thereof, do not stand to scrutiny as being in violation of statutory provision and so also, the principles of natural justice and hence, the same deserves to be quashed.

5. On the other hand, Shri K.K. Bissa, learned counsel representing the respondents, placed reliance on the Division Bench judgment rendered by High Court of Madras in the case of Advantage Strategic Consulting (P.) Ltd. v. Principal Commissioner of Income Tax, Chennai reported in [2021] 430 ITR 1 (Madras), and urged that the assessment proceedings have now become faceless and as such, no prejudice would be caused to the petitioner by the transfer of its case from Udaipur to New Delhi. He, thus, submitted that no interference is called for in the impugned order and the subsequent notices.

6. We have given our thoughtful consideration to the submission advanced at bar and have gone through the impugned order, the statutory provision and the judgments cited at bar.

7. At the outset, we may state here that Section 127(1) of the Income Tax Act, which deals with powers of the competent authority to transfer the assessment proceedings, is framed with the salutary objective of adherence to the principle of natural justice, which is fundamental to any proceeding of adversarial nature. It cannot be denied that the assessment/reassessment proceedings under the Income Tax Act, would be adversarial to the assessee and hence, adherence to the principles of natural justice, is sine qua non.

8. Whenever it is proposed to transfer the case of assessee from one assessing authority to another, providing opportunity of hearing to the assessee is essential and can be circumvented only if the competent authority feels, for reasons