Even administrative orders for transfers of jurisdiction must respect the principles of fairness, particularly in cross-jurisdictional transfers.




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Even administrative orders for transfers of jurisdiction must respect the principles of fairness, particularly in cross-jurisdictional transfers.

Provisions of Section 127 of the Income Tax Act – 1961 can be summarized as under:
1. Power to Transfer Cases (Subsection 1):
Allows transfer of cases between AOs subordinate to the same authority.
Preconditions:
Opportunity of being heard to the assessee (unless exempt under subsection 3).
Recording of reasons for transfer in writing.

2. Transfer Between Different Jurisdictions (Subsection 2):
Applicable when AOs involved are under different authorities.
Two scenarios:
a. Agreement between Authorities: The authority from whose jurisdiction the case is transferred issues the order.
b. Disagreement between Authorities: The Board (CBDT) or an authorized officer issues the transfer order.

3. Exceptions to Opportunity of Hearing (Subsection 3):
No hearing is required if the transfer is within the same city, locality, or place.

4. Applicability of Transfer Orders (Subsection 4):
Transfer orders can be issued at any stage of proceedings.
Pre-existing notices or actions by the previous AO remain valid.

Few cases
1. Recording and Communication of Reasons
Ajantha Industries v. CBDT [(1976) 102 ITR 281 (SC)]:The Supreme Court held that recording reasons for the transfer and communicating them to the assessee are mandatory requirements under Section 127.
Transfer orders lacking these elements are invalid.
R. S. Seth Gopikisan Agarwal v. DCIT [(1961) 41 ITR 101 (SC)]: It was held that while the transfer is an administrative action, adherence to procedural safeguards like communication of reasons ensures transparency and fairness.

2. Opportunity of Being Heard
Soni Motors v. Union of India [(2011) 333 ITR 470 (Raj)]:The Rajasthan High Court ruled that if the transfer significantly affects the assessee, the principle of natural justice mandates an opportunity of being heard.
Naresh Kumar Agarwal v. CIT [(2009) 312 ITR 0317 (All)]:The Allahabad High Court observed that even administrative orders like transfers must respect the principles of fairness, particularly in cross-jurisdictional transfers.

3. Transfer for Centralized Investigation
Jharkhand Mukti Morcha v. CIT [(1997) 222 ITR 110 (Pat)]:The Patna High Court upheld the transfer of cases to a specialized unit for coordinated investigation in cases involving political funding.
Aamby Valley Ltd. v. PCIT [(2021) 430 ITR 36 (Bom)]:In this case, the Bombay High Court ruled that transferring cases to ensure a centralized investigation in large-scale evasion cases was justified.

4. Validity of Transfer without Hearing
Shri Balaji Rice Co. v. CIT [(1981) 132 ITR 575 (MP)]:The Court held that no hearing is required for transfers within the same city under Subsection 3. However, recording reasons remains mandatory.
Carborundum Universal Ltd. v. CBDT [(1989) 180 ITR 171 (Mad)

1. M. G. George Muthoot v. CIT [(2021) 435 ITR 158 (Ker)]:

2. R. Venkatkrishna & Sons v. CIT [(2023) 448 ITR 96 (Mad)]:




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