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.

ORDER :

In S.B. Civil Writ Petition No.7436/2019, 1858/2018, 3087/2018, 3990/2018, 5160/2019, 7393/2019, 7405/2019 & 7408/2019.

1. For the sake of convenience and looking into the commonality of the issues raised, the present petitions are being decided, while treating D.B. Civil Writ Petition No.7436/2019 as a lead case:-

1.1. The reliefs claimed, in sum and substance, read as follows:

"A. By an appropriate Writ, Order or Direction, Notices dated 3-11-2017 (Annex.7) issued by the respondent no.2 & Order dated 8.12-2017 (Annex.10) passed by the respondent no.1 may kindly be quashed & set aside and accordingly the respondents may kindly be directed to exoneate the petitioners from all the proceedings and further to drop them qua petitioners as has been shown to be initiated in Notices dated 3-11-2017.

B. That the heavy cost may kindly be imposed upon the Respondents for violating the statutory provisions of the Income Tax Act, 1961.

C. Any other order or direction, which this Hon'ble Court deems fit and proper in the facts and circumstances of the case, may kindly be passed in favour of the petitioners.

D. The cost of the writ petition may kindly be awarded in favour of the petitioners."

2. As revealed from the above prayer clauses, the petitioner is aggrieved of the impugned transfer orders passed by the respondent Principal Commissioner of Income Tax Department, Bikaner under Section 127 of the Income Tax Act, 1961 (in short, ‘Act of 1961’) and the notices issued in pursuance thereof.

3. Learned counsel for the petitioners submits that the impugned transfers have been made without providing any opportunity of hearing to the petitioners, which as per the petitioners, is violative of Section 127 of the Act of 1961. The said Section 127 reads as follows:-

“127. Power to transfer cases.-(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.

(2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Director General or Chief Commissioner or Commissioner,—

(a) where the Directors General or Chief Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Director General or Chief Commissioner or Commissioner from whose jurisdiction the case is to be transferred 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, pass the order;

(b) where the Directors General or Chief Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Director General or Chief Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf.”

3.1. In support of such submission, learned counsel placed reliance on (1.) Smt. Jeewan Kumari Vs. Union of India & Ors. reported in (1979) 118 ITR 573 (Raj.), (2.) Noorul Islam Educational Trust Vs. Commissioner of Income Tax reported in (2017) 291 CTR (SC) 230 & (3) Murliwala Agrotech Private Ltd. Vs. Union of India (D.B. Civil Writ Petition No.6847/2021), decided on 20.07.2022 by this Court.

4. On the other hand, learned counsel representing the respondents, while opposing the submission made on behalf of the petitioners, placed reliance on the Division Bench judgment rendered by Hon’bl