P. K. PEHUJA vs CENTRAL BOARD OF DIRECT TAXES and Another

Satish Chandra, C.J. - The Central Board of Direct Taxes passed an order dated 19th July, 1975 purporting to be under S. 127(1) of the Income Tax Act, 1961 transferring the cases under the Income Tax Act, of the petitioner-assessee from the jurisdiction of the Income Tax Officer, A-word, Moradabad, to the Income Tax Officer, District-1 (2) Additional, New Delhi. The grievance of the petitioner is that the petitioner was not communicated the reasons, if any, which were recorded to sustain this order. Reliance has been placed on Ajantha Industries vs. Central Board of Direct Taxes, where the Supreme Court held that the requirement of recording reasons under S. 127(1) of the Income Tax Act, 1961 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. This case is applicable to the petitioner on all fours. The impugned order was potently erroneous in law.

The writ petition succeeds and is allowed. The impugned order dated 19th July, 1975 is quashed. The petitioner will be entitled to costs.