RAJESHWARI BHATT vs. PRINCIPAL COMMISSIONER OF INCOME TAX ANR

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CW/3432/2018HC RajasthanRJHC02031664201804 March 2025Author: AVNEESH JHINGAN,MANEESH SHARMA (V. J.)3 pages
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What did the High Court hold?

The High Court held that Section 127 of the Income Tax Act, 1961, empowers the transfer of cases and prescribes a procedure that includes providing the assessee with a reasonable opportunity of being heard and passing a reasoned order. An exception exists under sub-section (3) where transfer is within the same city, which is not applicable here as the transfer was between Jaipur and Bikaner, different districts. It was undisputed that no opportunity of hearing was granted to the petitioner before passing the impugned order. Furthermore, the impugned order was found to be bereft of reasons. The Court relied on the Supreme Court's decision in Ajantha Industries (supra), which set aside transfer orders where reasons were not communicated. In this case, not only were reasons not communicated, but no opportunity of hearing was granted. Consequently, the impugned order dated 17.11.2017 and the proceedings consequent thereto were quashed. The department was granted liberty to proceed in accordance with law.

What were the facts?

The petitioner, Rajeshwari Bhatt, filed a writ petition challenging an order dated 17.11.2017 passed by the Principal Commissioner of Income-tax, Jaipur-2, under Section 127 of the Income Tax Act, 1961. This order transferred her assessment case from Jaipur to the Assistant Commissioner of Income-tax (ACIT), Central Circle, Bikaner. The petitioner's grievance was that the transfer order violated principles of natural justice and the procedure prescribed under Section 127. The respondents argued that the transfer order had been acted upon, as the ACIT, Bikaner, had passed an assessment order against which the petitioner had filed an appeal. The petitioner had raised objections before the ACIT regarding the lack of prior communication and an opportunity to be heard before the transfer, but the ACIT proceeded with the assessment.

What were the issues?

1. Whether the order dated 17.11.2017 passed by the Principal Commissioner of Income-tax, Jaipur-2, transferring the petitioner's assessment case from Jaipur to ACIT, Central Circle, Bikaner, is in violation of the principles of natural justice and the procedure prescribed under Section 127 of the Income Tax Act, 1961. Assessee's Contention: The order was passed in violation of principles of natural justice and without following the procedure prescribed under Section 127 of the Act. Reliance was placed on the Supreme Court decision in Ajantha Industries and Ors. vs. Central Board of Direct Taxes, New Delhi and Ors. The petitioner also raised objections before the ACIT that the transfer order was not communicated and was passed without an opportunity of hearing. Revenue's Contention: The ACIT, Bikaner, had passed the assessment order, and the petitioner had preferred an appeal against it, indicating the transfer order had been acted upon. The respondents also argued that the pending appeal against the assessment order does not preclude the petitioner from assailing the legality and validity of the transfer order in writ jurisdiction.

Which sections of the Income-tax Act were involved?

Section 127

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JP:9363-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 3432/2018 Rajeshwari Bhatt W/o Late Shri Ganga Dhar Bhatt, R/o C-276 A, Bhabha Marg, Tilak Nagar Jaipur302004 ----Petitioner Versus 1. Principal Commissioner of Income Tax, Jaipur-2, Jaipur 2. Asst. Commissioner Of Income Tax, Central Circle, Bikaner ----Respondents For Petitioner(s) : Mr. Sanjay Jhanwar, Sr. Adv. with Mr. Rajat Sharma and Mr. Akshay Sharma For Respondent(s) : Mr. Siddharth Bapna with Mr. Sarvesh Jain Mr. Meyhul Miittal and Mr. Rahul Kumar HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMA

Order 04/03/2025 AVNEESH JHINGAN, J (ORAL):

1.

This petition is filed seeking quashing of order dated 17.11.2017 passed by the Principal Commissioner of Income-tax, Jaipur-2 under Section 127 of the Income Tax Act, 1961 (for short ‘the Act’) transferring the case of assessment of the assessee from Jaipur to ACIT, Central Circle-Bikaner (hereinafter referred to as ‘ACIT’).

2.

The grievance raised in the present petition is that the order passed is in violation of principles of natural justice and without following the procedure prescribed u/s 127 of the Act. Reliance is

[2025:RJ-JP:9363-DB] (2 of 3) [CW-3432/2018] orders passed u/s 127 by way of filing an appeal or revision. The contention of the counsel for the respondents that the appeal is pending against the assessment order passed by the ACIT does not oust the petitioner from assailing legality and validity of the transfer order in writ jurisdiction.

6.

Section 127 of the Act empowers transfer of cases and prescribes procedure to be followed. The authorized officer can transfer the cases after providing reasonable opportunity of being heard to the assessee and by passing a reasoned order. Exception for not granting opportunity of hearing is in sub-section (3) i.e. in

[2025:RJ-JP:9363-DB] (3 of 3) [CW-3432/2018] cases where transfer is from one assessing authority to another situated in the same city.

7.

In the present case, the case of the petitioner was transferred from Jaipur to Bikaner, different districts. It is undisputed that no opportunity of hearing was granted to the petitioner before passing the impugned order.

8.

From perusal of the impugned order, it is forthcoming that it is bereft of reasons. The principles of natural justice have been included in Section 127 of the Act yet were not complied with.

9.

The Supreme Court in case of Ajantha Industries (supra) set aside the transfer orders in case where reasons for transfer were available on record but were not communicated to the assessee. It is not the case of the department that reasons were ever recorded. Be that as it may, no opportunity of hearing was granted to the petitioner. The impugned order dated 17.11.2017 qua petitioner and proceedings consequent thereto are quashed.

10.

The writ petition is allowed.

11.

The department shall be at liberty to proceed in accordance with law. (MANEESH SHARMA),J (AVNEESH JHINGAN),J Simple Kumawat /21 Whether Reportable: Yes

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