High Court Of Delhi
Melco India (P) Ltd. & Ors. vs. CIT & Ors.
Section 127
D.K. Jain & Ms. Sharda Aggarwal, JJ.
Civil Writ Petn. No. 6922 & Civil Misc. No. 11772 of 2002
1st November, 2002
Counsel Appeared
O.S. Bajpai, for the Petitioners : R.C. Pandey, for the Respondents
JUDGMENT
D.K. JAIN, J. :
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, dt. 4th Oct., 2002, passed by the CIT, Delhi-II, New Delhi, in exercise of powers under s. 127 of the IT 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. 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.
4. 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 viewpoint 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 No. 1 and 2 companies reside at Faridabad and even the functionaries of petitioners No. 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.
5. 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 petitioners cases should be transferred from Delhi or not. The only question we are concerned is whether the CIT 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.
6. In Ajantha Industries & Ors. vs. CBDT & Anr. 1976 CTR (SC) 79 : (1976) 102 ITR 281 (SC), while dealing with the provisions of s. 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.
Elucidating the principle enunciated in Ajantha Industries’ case (supra), a Division Bench of Andhra Pradesh High Court in Vijayasanthi Investments (P) Ltd. vs. Chief CIT & Ors. (1991) 91 CTR (AP) 36 : (1991) 197 ITR 405 (AP) observed as under : “In the matter of the transfer of a case under s. 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 assessee 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 assessee 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.”
7. 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. Accordingly, we allow the writ petition; set aside the impugned order dt. 14th Oct., 2002, and make the rule absolute. There will, however, be no orders as to costs.
[Citation : 260 ITR 450]
