C. M. LODHA, C. J. - (1.) BY this petition under Art 226 of the Constitution of India, the petitioner has prayed that the order dated May 14, 1979 by the Cen-tral Board of Direct Taxes (Ex 3), transferring the case of the petitioner from Income-Tax Officer, Special Ward No. 3, Jaipur, to Income-Tax Officer, District III E (7), New Delhi, under section 127 of the Income-Tax Act, 1961 (hereinafter to be referred as the Act) be quashed.
(2.) THE petitioner Company carries on business of manufacturing copper rods, coils etc at Jaipur. Formerly, the Company had its branches at Delhi and Calcutta, which are said to have been closed with effect from December 31, 1976, and since then, the petitioner's case is that the Company's entire activities are confined to Jaipur. It is further stated by the petitioner that assessments for the years 1975-76 and 1976-77 were completed on Jury 31, 1978 and March 1, 1979 respectively, and the returns for the assessment years 1977-78 and 1978-, 79 were filed before the Income-Tax Officer, Company Circle 2, Jaipur. THE petitioner goes on to state that the Company has filed appeals with respect to the assessments for the years 1975-76 and 1976-77 and the same are pending before the Commissioner of Income-Tax (Appeals) Rajasthan 2, Jaipur. THE Central Board of Direct Taxes have a notice to the petitioner dated October 19, 1978 (Ex 1) whereby it proposed to transfer the petitioner's case from the Income-Tax Officer, Special Ward No. 3, Jaipur, to Income-Tax Officer 3 (18), New Delhi under section 127 of the Act, for the reason that the transfer would "facilitate coordinated investigations " THE petitioner was, therefore, called upon to appear before the Board and state its objections in writing In response to the notice, the petitioner sent a reply dated November 6, 1978 (Ex. 2) through its attorney wherein it was requested that the case may not be transferred to New Delhi since the entire business of the petitioner is being carried on in Jaipur and the proposed transfer would create unnecessary difficulties for the assessee, as-well as the Department. However, the Board did not accept the petitioner's contention and, as stated above, it ordered transfer of the case for the reason that the transfer was being effected in the interest of proper investigation. Learned counsel for the petitioner has urged that the order of transfer of the petitioner's case under section 127 of the Act is bad inasmuch as no detailed reasons have been recorded for transferring the case as required by sec. 127 (1) of the Act. It is submitted that merely stating that "the transfer was effected in the interest of proper investigation" was not sufficient. In other words, the petitioner's contention is that some more details should have been given stating the reasons why the transfer was being effected. The short question, that arises for consideration, is whether the reason given in the impugned order for transfer meets the requirement of section 127 (1) of the Act? The relevant portion of section 127 (1) of the Act reads as under: - "the Commissioner may, after giving the assessee a reasonable oppor-tunity 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 of the following officers subordinate to him, namely: - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . " In Ajantha Industries vs. Central Board of Direct Taxes (1), it was observed by the Supreme Court that the requirement of recording reasons under section 127 (1) of the Act for the transfer of a case from one Income-tax Officer to another is a mandatory direction under the law and non-communication thereof to the assessee is not saved by showing that the reasons exist in the file although not communicated to the assessee. Their Lordships went on to observe that recording of reasons and disclosure thereof are not a mere idle formality. When law requires reasons to be recorded in a particular order, affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated. Thus, it is clear that reasons must be recorded in the order of transfer. It may, however, be noted that in the above cited case in the order of transfer served on the appellants, no reasons whatsoever were recorded or communicated. But it was contended on behalf of the Revenue that reasons were communicated to the assessee, calling for objection against the proposed transfer, and, therefore, the reasons given in the show cause notice, namely, "facility of investigation, can be read as part of the impugned order although there is no mention of any reasons therein as such.
(3.) THE case on hand is, however, distinguishable inasmuch as in the impugned order itself, reason has been recorded, and that is, that the transfer is effected in the interest of proper investigation. THE grievance of the petitioner is that more details should have been given as to why the case was being transferred. Now. it may be pointed out that, according to the petitioners' own case, the petitioner took over the running concern and business of M/s. R. S. Metal Industries carrying on business of manufacturing copper rods, coils etc. and formerly the company had its branches at Delhi and Calcutta, which are said to have been closed with effect from December 31, 1976. It is not the petitioner's case that the impugned order of transfer is malafide or arbitrary or that it is based on irrelevant and extraneous considerations. We are of opinion that it was not necessary for the Board to state the particulars of investigation in the order. In Sidh Gopal Gajanand vs. Income-tax Officer, Central Circle (III), Kanpur (2) mention of 'facility of investigation and proper assessment' in the order of transfer was considered as sufficient compliance with the requirements of sec. 127 (1) of the Act in respect of recording the reasons. In the present case, the reason that the case was proposed to be transferred for facility of investigation was mentioned in the show cause notice. THE relevant part of the reply by the assessee to the notice is as follows: - ". . we have been advised by M/s. R. S. Metals Pvt. Ltd. to make a request to you not to transfer the file to Income-Tax Officer III (18), New Delhi, since the entire business of Messers R. S. Metals Pvt. Ltd. is being done in Jaipur and they do not have any connection whatsoever in Delhi. If the case is transferred to Delhi, it will create, unnecessary, difficulties and harassment to the assessee as well as to the Department in getting the assessment completed in Delhi since the entire records will have to be brought forward to Delhi and taxes have to be paid in Delhi and while the business will be done in Jaipur. As a matter (sic) the correct jurisdiction lies in Jaipur. " It is significant to note that there is not a word in the reply about the reason given in the notice viz, "to facilitate coordinated investigations", nor it has been suggested that the transfer was proposed to be made for any extraneous consideration. Having an overall view of the matter, we are satisfied that the impugned order does record the reasons for transfer and, in the circumstances of the case, it must be held to satisfy the requirements of sec. 127 of the Act. Accordingly, we do not find any force in this writ petition and hereby dismiss it, but, there will be no order as to costs. . ;