TMI Blog1990 (11) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... ad office is said to be located at No. 2, Brabourne Road, Calcutta. It is the petitioner's case that the principal places of business are at Bombay and Calcutta and the business is controlled both by the registered office and the head office. It is said that the books of account are maintained at the registered office at Bombay. The petitioner was assessed previously by the third respondent, inclusive of the assessment for the assessment year 1986-87 at Bombay. The returns for 1989-90 of the company are filed at Bombay. So far as the directors are concerned, their income-tax and wealth-tax assessments are made at Calcutta. It is said that the company does not carry on any business at Vishakhapatnam and also that they have no personnel to look into the assessment work at that place. While so, the second respondent (Assistant Commissioner of Income-tax, Bombay), issued a notice on November 22, 1988, addressed to the principal officer of the petitioner at 10-50-16, Waltair Uplands, Vishakhapatnam, stating that the petitioner's case is proposed to be transferred from Bombay to the office of the third respondent (Assistant Commissioner, 1. T., Vishakhapatnam). The petitioner sent a repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Commissioner of Income-tax, Vishakhapatnam), stating that the cases of the petitioner and those of Messrs. Andhra Steel Corporation and of Messrs V. K. Steel Industries, Vishakhapatnam, are closely connected as there is close relationship between the managing directors who are said to be members of the same family, that the transfer was effected "as per orders of the Bombay Chief-Commissioner (Tech.) No. B. C. CCIT/Cent II/1989-90 dated May 29, 1989" and the case records were received on September 27, 1989, that the transfer was effected "in order to co-ordinate investigation" in the group of cases stated above and also having regard to the claims and admissions made in the course of search operations under section 132 of the Act against the directors on February 24, 1987. Reference is made to the sworn statement of Smt. Shanti Devi, w/o Sri C. L. Mittal and director of the company dated February 24, 1987, to the effect that everything is being looked after by her husband and she does not know anything. Reference is also made to the sworn statement of Sri C. L. Mittal to the same effect. These aspects, it is stated, clearly revealed that "the case required detailed and coo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 127 of the Income-tax Act, 1961 ? We have heard the submissions of Sri Y. Ratnakar for the petitioner and of Sri. M. Suryanarayana Murthy for the Department. Under sub-section (1) of section 127 of the Act, the Director-General or Chief Commissioner or Commissioner may, after giving the assessee 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 to any other Assessing Officer or Assessing Officers also subordinate to him. Under subsection (2) of section 127, if there is no such subordinate officer, officers of superior status are vested with this power. Under this section, therefore, giving a reasonable opportunity of being heard wherever it is possible to do so and recording of reasons for the transfer are essential. The Supreme Court has held in Ajantha Industries v. CBDT [1976] 102 ITR 281, already referred to, as follows (headnote) : "The requirement of recording reasons under section 127(1) of the Income-tax Act, 1961, for the transfer of a case from one Income-tax Officer to another, is a mandatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also communicated. The writ petition was allowed. In V. K. Steel Industries (P.) Ltd. v. Asst. CIT [1991] 187 ITR 403 (AP), the impugned order passed by the Chief Commissioner of Incometax, Hyderabad, stated that the cases pertaining to the petitioner are transferred from the Assistant Commissioner, Circle 4(3), Hyderabad, to the Assistant Commissioner (Investigation Circle 1), Vishakhapatnam. The reason given in the order was said to be "to facilitate detailed and coordinated investigation". The order was preceded by a show-cause notice which too stated the same reasons. However, when the writ petition was being heard, a copy of the reasons behind the order, as having been reduced to writing, was furnished. The Division Bench then observed (at p. 404) : "it is evident that these reasons were not communicated to the petitioner. We do not see any justification for withholding the reasons and communicating only the conclusion. Indeed the reasons for transfer must have also been stated in the show-cause notice so as to enable the person concerned to make an effective representation. Since that has not been done, the order of transfer is liable to be quashed and it is accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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