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2009 (8) TMI 779

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..... rder and their non-communication to the petitioners would not be sustainable in the eyes of law - Therefore,petition succeeds and the same is allowed - However,leave it open to the Commissioner to pass a fresh order in accordance with the law laid down by the hon'ble the Supreme Court in Ajantha Industries'[1975 -TMI - 6462 - SUPREME Court]. - 17197 of 2008 - Dated:- 4-8-2009 - KUMAR M. M., JASWANT SINGH, JJ. JUDGMENT M. M. Kumar J.- 1. The petitioners have approached this court with a prayer for quashing the order dated June 13, 2008 (P.4) passed by the Commissioner of Income-tax, Bhatinda-respondent No. 5. The Commissioner exercising his powers under section 127(2) of the Income-tax Act, 1961 (for brevity the Act ) has transferred the jur .....

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..... The petitioners filed objection on February 1, 2008, asserting that they are resident of old Cantt. Road, Faridkot and they did not have any kind of business in Delhi. They further averred that they are doing the business of liquor in the State of Punjab and disclosed their place of residence and properties at Faridkot. They also disclosed that they are maintaining bank accounts in Punjab and Sind Bank, Faridkot and no search and seizure under section 132 of the Act had ever been taken against the petitioners or petitioners firm (P.2). The petitioners asserted that according to section 127 of the Act, the Commissioner-respondent No. 5 is under an obligation to record reasons in his order transferring the jurisdiction of the Assessing Office .....

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..... High Court. In that regard reliance has been placed on a Division Bench judgment in the case of Lt. Col. Paramjit Singh v. CIT [1996] 220 ITR 446 (P&H) and a Single Bench judgment in the case of Rajesh Mahajan v. CIT [2002] 257 ITR 577 (P&H). 8. Ms. Savita Saxena, learned counsel for the respondents has however argued that the provisions of section 127 of the Act have been religiously complied with inasmuch as reasons have been recorded by the Commissioner on August 13, 2008 (R.1). 9. Having heard learned counsel for the parties and perusing the paper book with their able assistance, we are of the considered view that power of transfer is vested in various authorities including the Commissioner by section 127 of the Act. It would b .....

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..... ioner or Commissioner as the Board may, by notification in the Official Gazette, authorize in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Assessing Officer or Assessing .....

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..... approach the High Court under its writ jurisdiction under article 226 of the Constitution or even this court under article 136 of the Constitution in an appropriate case for challenging the order, inter alia, either on the ground that it is mala fide or arbitrary or that it is based on irrelevant and extraneous considerations. Whether such a writ or special leave application ultimately fails is not relevant for a decision of the question. We are clearly of opinion that the requirement of recording reasons under section 127(1) is a mandatory direction under the law and non communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee. 12. Similar view has been taken by a Division .....

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..... functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. 15. In view of the aforesaid principle, the recording of separate reasons which are not part of the impugned order and their non-communication to the petitioners would not be sustainable in the eyes of law. Therefore, we find no hesitation to reject the aforesaid argument. 16. For the reasons aforementioned, this petition succeeds and the same is allowed. Order dated August 13, 2008 (annexure P. .....

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