Income-tax---

----Transfer of case---Powers of C.I.T.---Power of transfer is quasi-judicial and must be exercised in a fair and reasonable manner---Order should contain reasons---Order of transfer without considering objections of assessee---Not valid---Indian Income Tax Act, 1961, S.127---Constitution of India, Art.226.

The power of transfer of assessment files from one authority to another is conferred on the Commissioner of Income-tax under section, 127(1) of Income Tax Act, 1961. The power is a quasi-judicial one. Such a power has to be exercised in a fair and reasonable manner and not in an arbitrary or mechanical way. The passing of a reasoned order is one of the requirements of fairness in action.

The petitioner, who was an assessee to income-tax on the files of the Income-tax Officer, Ernakulam, made an application to him for transfer of the said files to Delhi, where the petitioner's administrative office also was transferred. It was stated that, since no reply was received from the first respondent, the petitioner filed returns before the Assistant Commissioner of Income-tax, Circle 10(1), New Delhi, and the assessment for the year 1990-91 had been completed. Meanwhile, the Assistant Commissioner of Income-tax, Circle I, Division II, Ernakulam, issued a communication stating that the assessment files of the petitioner had been transferred to him. Within one month thereafter, the petitioner received a communication from the Chief Commissioner of Income-tax, Cochin, stating that he proposed to transfer the petitioner's assessment files from the Income-tax Officer, Ernakulam, to the Assistant Commissioner of Income-tax, Central Circle I, Emakulam, for administrative convenience and called for the petitioner's objection, if any, to the above. The petitioner filed his objection stating that the petitioner was then assessed to income-tax by the Income-tax Authorities at Delhi. The Chief Commissioner of Income-tax issued a notification transferring the assessment of the petitioner to the Assistant Commissioner of Income-tax, Central Circle, Ernakulam. On a writ petition to quash the communications and the notification:

Held, that the Chief Commissioner of Income-tax had filed a counter-affidavit stating certain facts and circumstances which were not disclosed in any of the communications. The Chief Commissioner of Income -tax could not supplement the notification with averments made in the counter-affidavit. The transfer of the assessment file to the Assistant Commissioner of Income-tax , Central Circle I, Ernakulam, was liable to be quashed. The Chief Commissioner of Income-tax had to consider the petitioner's objections and take a decision after giving an opportunity of personal hearing to the petitioner as expeditiously as possible, at any rate, within a period of two months. from the date of receipt of a copy of this judgment.

P. Balachandran for Petitioner.

N.R.K. Nair for Respondents.

JUDGMENT

G. SIVARAJAN, J.---The petitioner, who was an assessee to income-tax on the files of the first-respondent, made an application to him for transfer of the said files to Delhi, where the petitioner's administrative officer also was transferred. It is stated that since no reply was received from the first. respondent, the petitioner filed returns before the Assistant Commissioner of Income-tax, Circle 10(1), New Delhi, and the assessment for the year 1990-91 has been completed by him evidenced by Exh. P-2. It is stated that; while the matter stood, thus, the second respondent issued Exh. P-3 communication stating that the assessment file of the petitioner has been transferred from the first-respondent to the second respondent. Within one month thereafter, the petitioner received a communication Exh. P-4 from the fourth. respondent, the Chief Commissioner of Income-tax, Kochin, stating that tie proposes to transfer the petitioner's assessment files from the first respondent to the third respondent for administrative convenience and called for the petitioner's objection, if any, to the above. The petitioner filed Exh. P-5 objection stating that the petitioner was then assessed to income-tax by the Income-tax Authorities at Delhi. The fourth respondent issued Exh. P-6 notification transferring the assessment of the petitioner to the third respondent. The petitioner then filed Exh. P-7 objection, which was disposed of by Exh. P-8 communication stating that the objections raised by the petitioner in Exh. P-5 was considered while issuing Exh. P-6 notification and that no further circumstances have been brought for fresh consideration.

The petitioner has filed this original petition for quashing Exhs. P-3, P-4; P-6 and P-8 communication and for directing the respondents not to give effect to Exh. P-6 notification. The petitioner also seeks for a direction to the respondents not to transfer the files of the petitioner from Delhi to any other place.

A counter-affidavit is filed on behalf of the fourth respondent. In the said counter-affidavit, the fourth-respondent has stated certain facts and circumstances which were not disclosed in any of the communications issued by respondents Nos 2 and 4.

Learned counsel appearing for the petitioner submitted that the petitioner filed Exh. P-1 application before respondent No.1 for transfer of the files to Delhi, since the Administrative Officer of the petitioner's firm was transferred-to Delhi and the petitioner has no transaction in the State of Kerala. Learned counsel also submitted that since no reply was received from the first-respondent, the petitioner assumed that the first respondent has no objection in the matter and accordingly the petitioner filed his returns in Delhi and the assessment were also completed there. Learned counsel further submitted that in reply to Exh. P-4 notice issued by the fourth-respondent, the petitioner filed Exh. P-5 objection setting out all those circumstances. Learned counsel submitted that the fourth respondent did not consider any of the objections taken by the petitioner in Exh. P-5 and that Exh. P-6 notification had been issued in a mechanical manner. Learned counsel also submitted that there is absolutely nothing in Exh. P-6 to show that the fourth respondent had considered the objections raised in Exh. P-4.

I have also heard Sri N. R. K. Nair, learned counsel appearing for the respondents. He submitted that the fourth respondent had considered all the facts and circumstances stated in. the counter-affidavit and that it is only thereafter, that the fourth-respondent issued Exh. P-6 notification.

I have considered the matter. The power of transfer of the assessment files from one authority to another is conferred on the Commissioner of Income-tax under section 127(1) of the Income Tax Act, 1961. The power vested in the fourth-respondent under the said section is a quasi-judicial one. Such a power has to be exercised in a fair and reasonable manner and not in an arbitrary or mechanical way, The fourth respondent issued Exh. P-4 notice proposing to transfer the files from the first respondent to the third respondent and called for the objections of the petitioner. The petitioner filed his objections evidenced by Exh. P-7. From Exh. P-8 communication, it is clear that the said objection was received by the fourth-respondent. Curiously enough, there is no reference to the objections filed by the petitioner in Exh. P-6.There is absolutely nothing to show that the fourth-respondent had considered the said objections before issuing Exh. P-6 notification except from Exh. P-8 communication where it is stated that the objections taken in Exh. P-5 had been considered by the fourth respondent before issuing Exh. P-6 notification. As already stated a quasi judicial authority discharging statutory functions is expected to act in a fair and reasonable manner and that passing of a reasoned order is one of the requirements of fairness in action. The fourth-respondent cannot supplement Exh. P-6 by the averments made in the counter-affidavit. It is also relevant to note that the fourth respondent, at the time of issuing Exh: P-4 notice, was not aware of the transfer of the assessment files of the petitioner from the first respondent to the second respondent.

Since Exh.P-6 does not satisfy the above requirements, I am of the view that Exh. P-6 notification, in so far as it relates to the petitioner, cannot be sustained, The transfer of the assessment file of the petitioner from the second respondent to the third respondent. is accordingly set aside. I direct the fourth respondent to consider the objections taken by the petitioner in Exh. P-5 afresh and to take a decision on Exh. P-4 notice with an opportunity of personal hearing of the petitioner as expeditiously as possible, at any rate, within a period of two months from the date of receipt of a copy of this judgment. Further proceedings pursuant to obtaining of the assessment files of the petitioner from Delhi by the third respondent, will be kept in abeyance till a decision is taken on Exh. P-4. I make it clear that I have not considered the merits of the matter in this original petition.

The original petition is disposed of as above.

M.B.A./3277/FCOrder accordingly