Murliwala Agrotech Private ... vs Union Of India
2022 Latest Caselaw 9435 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 6847/2021

Murliwala Agrotech Private Limited, Through Its Director - Rakesh Gupta, Aged About 49 Years, G-240-245, RIICO Industrial Area, Gudi, Udaipur - 313001, Rajasthan.

----Petitioner Versus

1. Union Of India, Through The Secretary To The Government Of India, Ministry Of Finance, Department Of Revenue, New Delhi.

2. Principal Commissioner Of Income Tax, 3rd Floor, Aayakar Bhawan, Subcity Centre, Udaipur.

3. The Assistant Commissioner Of Income Tax, Circle-2, Income Tax Department, Udaipur.

4. Deputy Commissioner Of Income-Tax, Central Circle 14, New Delhi, 354, 3rd Floor, Income Tax Building, E-2, ARA Centre, Jhandewalan Extension, New Delhi.

                                                                     ----Respondents


For Petitioner(s)           :     Mr. Anjay Kothari
For Respondent(s)           :     Mr. K.K. Bissa



            HON'BLE MR. JUSTICE SANDEEP MEHTA
           HON'BLE MR. JUSTICE KULDEEP MATHUR

                                       Order

20/07/2022

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.

The grievance of the petitioner is that by order Annexure-7,

the assessment file of the petitioner has been transferred to the

(2 of 5) [CW-6847/2021]

Deputy/ACIT, Central Circle-14, New Delhi, without providing any

opportunity of hearing.

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.

In support of his contentions, Shri Kothari placed reliance on

(1.) Smt. Jeewan Kumari Vs. Union of India & Ors. reported

(3 of 5) [CW-6847/2021]

in (1979) 118 ITR 573 (Raj.) and (2.) Noorul Islam

Educational Trust Vs. 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.

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. Vs. 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.

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.

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

(4 of 5) [CW-6847/2021]

the assessee and hence, adherence to the principles of natural

justice, is sine qua non.

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 to be recorded in

writing, that it is not possible to do so. In the present case, the

respondents have neither setup any such case that it was not

possible to provide opportunity of hearing to the assessee, nor any

reasons to do so were recorded before taking the decision to

transfer the case from Circle Udaipur to Circle New Delhi.

Notwithstanding the fact that the assessment proceedings

under the Income Tax Act, have now become faceless, it cannot

be denied that the assessee would be entitled to engage Counsel/

Advisors of his choice to defend himself even in the faceless

proceedings and thus, the requirement of following the principles

of natural justice cannot be evaded in a casual manner.

In the case of Advantage Strategic Consulting (P) Ltd.

(supra), relied upon by counsel Shri Bissa, the factual situation

was totally different because transfer had been made from one

Circle to another in the same city. Furthermore, during pendency

of the proceedings, the assessment order had been passed. In

that situation, Hon'ble Division Bench went on to hold that

proceedings before the High court, had become infructuous.

In the present case, the transfer order and the notices issued

in furtherance thereof, have been stayed by this Court and as

such, the facts of the case at hand are totally distinguishable.

(5 of 5) [CW-6847/2021]

A Division Bench of this Court in the case of Smt. Jeewan

Kumari (supra), has held that as per Section 127(1) of the

Income Tax Act, it was incumbent for the Board to have provided

opportunity of hearing to the assessee before ordering transfer of

her case. Similar view was taken by Hon'ble the Supreme Court in

the case of Noorul Islam Educational Trust (supra).

Consequently, we are of the opinion that the impugned

transfer order dated 21.11.2019 (Annexure-7) and the notices

(Annexure-2, Annexure-6 and Annexure-12), as a consequence

thereof, do not stand to scrutiny and hence, the same are declared

invalid and set aside.

The respondents are permitted to resume the proceedings

from the stage former to the transfer order (Annexure-7) dated

21.11.2019, was passed. If it is still proposed to transfer the case

of the petitioner, opportunity of hearing shall be provided to it and

thereafter, proceedings shall be continued and concluded as per

law within a period of three months from today.

The writ petition is allowed in these terms.

No order as to cost.

                                   (KULDEEP MATHUR),J                                       (SANDEEP MEHTA),J


                                   75-/Devesh Thanvi/-









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