Case: Kashiram Agarwala Vs. Union of India &amp; Others

These two orders have been passed on the 18th January, 1963, and they have directed that the income-tax proceedings then pending against the appellant should be transferred from the Income-tax Officers D Ward District IV(I), and F Ward District IV(2), Calcutta, respectively to the Income-tax Officer E Ward Companies District III, Calcutta. The petitioner alleged that these two orders were invalid, because before exercising its power under S. 127(1), the Board had failed to comply with a mandatory requirement prescribed by the said provision. These petitions were dismissed summarily by the High Court, and it is against these orders of summary rejection that the appellant has come to this Court by special leave.

Reasoning: 5. But, on the other hand, the provision that nothing in sub-section (1) shall be deemed to require any opportunity to be given, is worded in an emphatic form; and that fact has to be borne in mind in considering the effect of the proviso. Besides, it would not be unreasonable to assume that the recording of reasons prescribed by S. 127(1) would be appropriate where a transfer is being made otherwise than in the manner prescribed by the proviso. In such a case, normally, the assessee has to be given a reasonable opportunity to be heard; and the natural corollary of this requirement is that his objections to the transfer should be considered and reasons given why the transfer is made despite the objection of the assessee. In other words, the requirement as to the recording of reasons flows as a natural consequence and corollary of the requirement that a reasonable opportunity should be given to the assessee. If, however, a reasonable opportunity is not given to the assessee on the ground that it is not possible to do so, S. 127(1) requires that the transfer being of a category where a reasonable opportunity should be given to the assessee, the authority should record its reasons for making the transfer, even though no opportunity was in fact given to the assessee. If that be the true position, it is not easy to understand why the proviso should be so construed as to require reasons to be given for the transfer, even though no opportunity to the assessee is required to be given. That is one aspect of the matter which has to be borne in mind in determining the true scope and effect of the proviso.It is in the light of these considerations that we have to construe the proviso to S. 127(1). As we have already indicated, the construction for which Mr. Jain contends is a reasonably possible construction. In fact, if the words used in the proviso are literally read, Mr. Jain would be justified in contending that the requirement that reasons must be recorded applies even to cases falling under it. On the other hand, if the obvious object of the proviso is taken into account and the relevant previous background is borne in mind, it would also seem reasonable to hold that in regard to cases falling under the proviso, an opportunity need not be given to the assessee, and the consequential need to record reasons for the transfer is also unnecessary, and this view is plainly consistent with the scheme of the provision and the true intent of its requirements. We would accordingly hold that the impugned orders cannot be challenged on the ground that the Board has not recorded reasons in directing the transfer of the cases pending against the assessee from one Income-tax Officer to another in the same locality.