Case Note & Summary
The petitioner, Shikshana Prasaraka Mandali, a public charitable trust established in 1888 engaged in running educational institutions, challenged the order dated 2/8/2012 passed by the Commissioner of Income Tax (Central), Pune under Section 127(2) of the Income Tax Act, 1961. By the impugned order, the petitioner's case was transferred from the Assistant/Deputy Commissioner of Income Tax, Central Circle, Pune to the Assistant/Deputy Commissioner of Income Tax, Central Circle-12, Mumbai. The petitioner contended that no proper opportunity of hearing was given and the order was not a speaking order. The respondents argued that a hearing was given and the transfer was for co-ordination and effective investigation. The court examined the facts and found that the petitioner was given only a short notice and the objections raised were not considered. The impugned order merely stated that the transfer was for 'co-ordination and effective investigation' without any reasons. The court held that the transfer order violated the principles of natural justice and the requirement of a speaking order under Section 127(2). The court set aside the impugned order and directed the Commissioner to pass a fresh order after giving a proper hearing and recording reasons.
Headnote
A) Income Tax - Transfer of Case - Section 127(2) Income Tax Act, 1961 - Requirement of Hearing and Speaking Order - The Commissioner transferred the petitioner's case from Pune to Mumbai without considering the petitioner's objections and without providing reasons in the order. The court held that the transfer order is invalid as it violates the principles of natural justice and the requirement of a speaking order under Section 127(2). The Commissioner must give a meaningful hearing and pass a reasoned order. (Paras 1-10) B) Income Tax - Transfer of Case - Section 127(2) Income Tax Act, 1961 - Application of Mind - The impugned order merely stated that the transfer was for 'co-ordination and effective investigation' without any further elaboration. The court held that this does not demonstrate application of mind and the order is liable to be set aside. (Paras 5-8)
Issue of Consideration
Whether the transfer of the petitioner's case from Pune to Mumbai under Section 127(2) of the Income Tax Act, 1961 is valid when the petitioner was not given a proper opportunity of hearing and the order does not disclose reasons for transfer.
Final Decision
The impugned order dated 2/8/2012 is quashed and set aside. The Commissioner is directed to pass a fresh order after giving a proper opportunity of hearing to the petitioner and recording reasons for the transfer.
Law Points
- Transfer of case under Section 127(2) of Income Tax Act
- 1961 requires proper hearing and application of mind
- Transfer order must be a speaking order with reasons
- Opportunity of hearing must be meaningful and not a mere formality
- Commissioner must consider objections raised by assessee before ordering transfer
