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IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JODHPUR
VIJAY BISHNOI, YOGENDRA KUMAR PUROHIT, JJ.
Mahendra Singh Rao S/o Shri Raj Singh Rao – Petitioner
Versus
The Principal Commissioner of Income Tax, Udaipur – Respondent
D.B. Civil Writ Petition No. 19355 of 2022
Decided On : 24-08-2023
Income Tax Act - Transfer Order - Opportunity of Hearing
Fact of the Case:
The petitioner challenged the transfer order and consequential notices issued by the Principal Commissioner of Income Tax, Udaipur, citing lack of opportunity of hearing before the transfer.
Finding of the Court:
The court allowed the writ petition, setting aside the transfer order and notices, and directing the respondents to resume proceedings from the stage before the transfer order. The court also mandated that if the case is still proposed to be transferred, opportunity of hearing must be provided to the petitioner.
Issues: Opportunity of hearing before transfer under Section 127 of the Income Tax Act
Ratio Decidendi: The court held that it is mandatory for the concerned authority to provide opportunity of hearing to the assessee before transferring the case, as per Section 127 of the Income Tax Act.
Final Decision: The impugned transfer order and consequential notices were set aside, and the respondents were directed to resume proceedings from the stage before the transfer order. Opportunity of hearing must be provided if the case is still proposed to be transferred.
ORDER :
1. This writ petition is filed by the petitioner challenging the order dated 22.06.2022 passed by the Principal Commissioner of Income Tax, Udaipur while exercising powers under Section 127 of the Income Tax Act and consequential impugned notice dated 30.06.2022 issued under Section 143 of the Income Tax Act and the notices dated 16.11.2022 and 29.12.2022 issued under Section 142 of the Income Tax Act.
2. Learned counsel for the petitioner has contended that before transferring the case of the petitioner from ITO, Ward-2(1), Udaipur to ITO, Ward-1(3), Kozhikode, no opportunity of hearing was granted to the petitioner as provided under Section 127 of the Income Tax Act. It is submitted by learned counsel for the petitioner that this Court in DBCWP No. 6847/2021 (Murliwala Agrotech Private Limited vs. Union of India and Others) decided on 20.07.2022, involving identical issue, has set aside the transfer order and the notices issued by the concerned authority while holding that it is mandatory for the concerned authority to provide opportunity of hearing to the assessee before transferring the case.
3. Learned counsel for the respondents is not in a position to dispute the above fact.
4. In these circumstances, the instant writ petition is allowed. The impugned transfer order dated 22.06.2022 and consequential notices dated 30.06.2022, 16.11.2022 and 29.12.2022 are set aside. The respondents are permitted to resume the proceedings from the stage former to the transfer order dated 22.06.2022 was passed. If it is still proposed to transfer the case of the petitioner, opportunity of hearing shall be provided to him and thereafter, proceedings shall be continued and concluded as per law within a period of six months from the date of production of certified copy of this order. No order as to costs.
5. Stay petition is disposed of.
AI
Opportunity of hearing is mandatory for the concerned authority before transferring a case under Section 127 of the Income Tax Act.
The court established that the requirement of a hearing before transferring cases under Section 127 of the Income Tax Act is fundamental to ensuring natural justice.
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.
Administrative authorities cannot exercise the power to transfer assessment proceedings in a repetitive manner. Once a transfer order is invalidated, any subsequent attempt to transfer the same case ....
The court reaffirmed the necessity of natural justice in administrative decision-making, stressing the need for consideration of a party's objections prior to adverse decisions.
Transfer orders under Section 127 of the Income Tax Act must comply with principles of natural justice, including providing an opportunity for the assessee to be heard.
The court upheld the transfer order under Section 127(2) of the Income Tax Act, confirming its reasoned nature and the existence of agreement between jurisdictional Commissioners.
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