MS Agarwal Foundries Private Limited Vs DCIT (Telangana High Court)
The Telangana High Court considered a writ petition challenging two transfer orders passed under Section 127 of the Income-tax Act, 1961, whereby the petitioner’s case was first transferred from the fourth respondent to the second respondent and thereafter from the second respondent to the first respondent. The petitioner also challenged the notice issued under Section 143(2), the assessment order passed under Section 143(3), and the consequential proceedings for Assessment Year 2024-25, contending that the transfer orders were invalid as no prior notice or opportunity of hearing had been given before transferring the case. The petitioner argued that the assessment order passed by the transferee Assessing Officer was consequently without jurisdiction.
The Court identified the principal issue as whether the transfer of the petitioner’s case between the concerned Assessing Officers had been made in accordance with Section 127 of the Income-tax Act. It observed that if the transfer orders were valid, the consequential assessment order could not be challenged on the ground that the transferee authority lacked jurisdiction.
The Court examined Section 127 of the Act, which empowers the competent authority to transfer cases from one Assessing Officer to another. It noted that while sub-sections (1) and (2) generally require a reasonable opportunity of hearing before transfer, sub-section (3) expressly provides that no such opportunity is required where the transfer is between Assessing Officers situated in the same city, locality or place. The Court held that the statutory provision clearly dispenses with the requirement of issuing notice or granting a prior hearing in such intra-city transfers.
