Delhi High Court
Melco India (P.) Ltd. And Ors. vs Commissioner Of Income-Tax on 1 November, 2002
Equivalent citations: (2003)179CTR(DEL)242, [2003]260ITR450(DELHI)
Author: D.K. Jain
Bench: D.K. Jain, Sharda Aggarwal
JUDGMENT D.K. Jain, J.
1. Rule D.B.
2. Since a very short point of law is involved, and there is no controversy on facts, we proceed to dispose of the writ petition at this stage itself.
3. A common order, dated October 4, 2002, passed by the Commissioner of Income-tax, Delhi-II, New Delhi, in exercise of powers under Section 127 of the Income-tax Act, 1961 (for short the "Act"), transferring the cases of the four petitioners from New Delhi to Central Circle, Faridabad, is under challenge in this writ petition.
4. The main ground of challenge is that before passing the impugned order, the petitioners were not granted any opportunity of being heard in the matter of transfer of their jurisdiction from Delhi, where they are being assessed for the last several years.
5. On the last date of hearing, we had asked Mr. R.C. Pandey, learned senior standing counsel for the Revenue, who had put in appearance on advance notice, to seek instructions as to whether an opportunity to put forth their view point on the issue was granted to the petitioners or not. Mr. Pandey very fairly states that as per his instructions, no notice was issued to the petitioners before passing the said order. He would, however, submit that since the entire business activity of the petitioners is at Faridabad and even the functionaries of petitioners Nos. 1 and 2 companies reside at Faridabad, no prejudice is likely to be caused to them on account of transfer of their cases to Faridabad.
6. We are unable to persuade ourselves to agree with learned counsel for the respondents. In this petition, we are not concerned with the question whether the petitioners' cases should be transferred from Delhi or not. The only question we are concerned is whether the Commissioner has exercised his power of transfer of jurisdiction from one place to another by following the settled principles of law in the matter of transfer of cases.
7. In Ajantha Industries v. CBDT [1976] 102 ITR 281, while dealing with the provisions of Section 127 of the Act, their Lordships of the Supreme Court observed that before making an order of transfer the Legislature has imposed the requirement of a show cause notice and also recording of reasons.
8. Elucidating the principle enunciated in Ajantha Industries v. CBDT a Division Bench of the Andhra Pradesh High Court in Vijayasanthi Investments Pvt. Ltd. v. Chief CIT [1991] 187 ITR 405, observed as under (page 411) :
"... in the matter of the transfer of a case under Section 127 of the Act, it is necessary that the authority which proposes to transfer the case must, wherever it is possible to do so, give the assessed a reasonable opportunity of being heard with a view to enable him to effectively show cause against the proposed transfer. The notice must also propose to give a personal hearing. It is also necessary to mention in the notice the reasons for the proposed transfer so that the assessed could make an effective representation with reference to the reasons set out. It is not sufficient merely to say in the notice that the transfer is proposed 'to facilitate detailed and co-ordinated investigation'. The reasons cannot be vague and too general in nature but must be specific and based on material facts. It is again not merely sufficient to record the reasons in the file but it is also necessary to communicate the same to the affected party."
9. We are in respectful agreement with the view expressed by the Andhra Pradesh High Court. In this view of the matter, the impugned order cannot be sustained, as admittedly no notice was issued to the petitioners giving them an opportunity of being heard.
10. Accordingly, we allow the writ petition ; set aside the impugned order dated October 14, 2002, and make the rule absolute.
11. There will, however, be no order as to costs.